Dec 2012 Railway Age Magazine by Railway Age

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December 2012 | www.railwayage.com

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When the trains

stopped

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RailwayAge

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visit us at www.railwayage.com Features when the trains stopped

2013 Freight Rail Outlook 28 Stepping up the ol’ grind

D.C. Metro keeps growing 42

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On the COver Hurricane Sandy clobbered the U.S. Northeast, and railroads were not spared. Photo © NJ TRaNSiT

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 345 Hudson St., 12th Fl., New York, NY 10014. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 213, No. 12. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print or Digital only versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Foreign $239.00 (U.S. funds) per year/$397.00 for two years for Air mail delivery. When ordering Both Print and Digital: $150.00 per year/$227.00 for two years in the U.S., Canada, and Mexico; $208.00 per year/$296.00 for two years, foreign. Foreign $308.00 (U.S. funds) per year/$496.00 for two years for Air mail delivery. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2012 Simmons-Boardman Publishing Corporation 2012. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 10, Omaha, NE 68101-0010 or call toll free (800) 895-4389. In Nebraska call (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 00338826

December 2012 Railway age 1

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From the Editor william C. Vantuono

“When the MTA stops, New York stalls”

here were you when Superstorm Sandy (“Hurricane Sandy” is far too mild a name) unleashed its devastating destructive power on the Northeast? If you work for one of the region’s passenger rail systems, you’ll probably never forget, and you’re probably still hard at work getting operations back to what they were pre-storm. Sandy is the second disaster to strike the New York area I’ve witnessed since joining Railway Age more than 20 years ago. The first was 9/11, watching both World Trade Center towers collapse from my office window. No one will dispute that 9/11 was far more devastating than Sandy in terms of loss (communities can be rebuilt; lives lost cannot be replaced), but the storm’s impact on transportation was far more serious than 9/11, despite the loss of vital parts of the subway system in the Twin Towers area. When the trains stopped running, everything ground to a halt, or significantly slowed (like me, commuting by bus while NJ Transit worked on restoring North Jersey Coast Line service). At the very least, this storm (as our cover story on p. 18 illustrates) underscored just how vital our rail systems are—and the importance of continued investment in them. “Hurricane Sandy proved once again that when the Metropolitan Transportation Authority stops, New York stalls,” The New York Times wrote in a Nov. 20 editorial entitled “Remember the MTA.” “This will be worth remembering when, a few months from now, city and state officials are deciding how to help finance the authority in future years. “The MTA needed more support even before Hurricane Sandy hit, flooding subway tunnels and paralyzing the area’s buses and commuter trains. While the agency has done a terrific job getting things up and running again, it will need more money down the line.” The Times went on to point out that $2.3

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December 2012

billion of the MTA’s current annual $13.1 billion budget goes toward servicing $32 billion in debt—a figure that the New York State comptroller’s office has predicted could rise during the next five-year capital plan, which calls for an additional $20 billion in spending by 2019. “Most of the responsibility for keeping the MTA financially sound falls on the governor, the mayor, and the City Council,” The Times concluded. “But Congress can help by providing more capital funding to maintain and expand the largest public transit system in the country. After Hurricane Sandy, neither Albany, City Hall, nor Washington should need any further reminder of the MTA’s importance to the economic health of a vital region of the country.” Welcome back, Wilner: Frank N. Wilner returns to the Railway Age Contributing Editor fold after a long absence while working as the United Transportation Union’s director of public relations, a position from which he retires Dec. 31. Frank, well-known to readers for his insight into all things political and his deep connections on Capitol Hill, will be penning a “Watching Washington” report. The first of these appears on p. 12. Frank’s career in the railroad industry spans more than 40 years: New York Central, Penn Central, Norfolk & Western, Association of American Railroads, Surface Transportation Board, and UTU. In addition to contributing to Railway Age, he has written for the Journal of Commerce, Traffic World, the Cato Institute, and the Heritage Foundation. Frank is also the author of several books, most of which have been published by Simmons-Boardman. The latest of these is the just-issued Amtrak: Past, Present, Future, a thorough revision and update of his 1994 volume, The Amtrak Story. See our review on p. 16.

Editorial and ExEcutivE officEs Simmons-Boardman Publishing Corp. 345 Hudson Street, 12th Fl. New York, NY 10014 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com DOUGLAS JOHN BOWEN, Managing Editor dbowen@sbpub.com LUTHER S. MILLER, Senior Consulting Editor lmiller@sbpub.com ROBERT P. DeMARCO, Publisher Emeritus bdemarco@sbpub.com CONTRIBUTING EDITORS: Alex Binkley, Roy H. Blanchard, Lawrence H Kaufman, Bruce E. Kelly, Anthony D. Kruglinski, Ron Lindsey, Ryan McWilliams, Jason H. Seidl, Frank N. Wilner

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Industry Indicators TRAFFIC ORIGINATED carLoaDS MAJOR U.S. RAILROADS By COMMODITy grain farm Products ex.grain metallic ores coal crushed Stone / Sand / gravel nonmetallic minerals grain mill Products food & Kindred Products Primary forest Products Lumber & Wood Products Pulp, Paper & other chemicals Petroleum Products Stone, clay & glass coke metals & Products motor Vehicles & equipment Iron & Steel Scrap Waste & nonferrous Scrap all other carloads TOTAL CAR LOADED

CANADIAN RAILROADS ALL COMMODITy

MEXICAN RAILROADS ALL COMMODITy

U.S TOTAL CANADIAN TOTAL MEXICAN TOTAL NORTH AMERICAN TOTAL

WEEK 45 enDIng noVemBer 10, 2012 2012 19,577 1,156 6,963 114,640 21,592 4,160 9,910 6,777 1,644 2,974 5,510 29,539 11,507 7,560 3,384 9,040 16,055 4,030 3,516 3,880 283,414

2011 21,698 932 8,803 135,622 18,935 4,245 9,888 6,444 1,538 2,749 5,829 28,812 7,910 7,384 3,294 9,611 14,132 4,248 3,494 3,994 299,562

76,208

76,210

0.0%

15,155

14,689

3.2%

45 WEEKS 12,748,473 3,475,452 648,236 16,872,161

% CHANGE -9.8% 24.0% -20.9% -15.5% 14.0% -2.0% 0.2% 5.2% 6.9% 8.2% -5.5% 2.5% 45.5% 2.4% 2.7% -5.9% 13.6% -5.1% 0.6% -2.9% -5.4%

% CHANGE FROM 2011 -3.0% 2.1% 0.4% -1.9%

WEEK 45 enDIng noVemBer 10, 2012

InTermoDaL U.S. RAILROADS TraILerS conTaInerS TOTAL UNIT

30,705 218,826 249,531

34,472 210,510 244,982

-10.9% 4.0% 1.9%

1,453 52,407 53,860

1,530 47,885 49,415

-5.0% 9.4% 9.0%

21 10,298 10,319

2 8,994 8,996

950.0% 14.5% 14.7%

CANADIAN RAILROADS TraILerS conTaInerS TOTAL UNIT

MEXICAN RAILROADS TraILerS conTaInerS TOTAL UNIT

U.S TOTAL CANADIAN TOTAL MEXICAN TOTAL NORTH AMERICAN TOTAL

45 WEEKS 10,694,270 2,330,527 450,899 13,475,696

% CHANGE FROM 2011 3.4% 6.9% 19.8% 4.5%

ESTIMATED TON-MILES (BILLIONS), U.S. CLASS I RAILROADS 2012 33.2 1,467.1

WeeK 45 TOTAL WEEK 1-45

2011 35.0 1,500.4

% CHANGE -5.1% -2.2%

Source: Weekly railroad Traffic, association of american railrods

RAIL FREIGHT TRAFFIC TRENDS, U.S. CLASS I RAILROADS estimated billion ton-miles

2011

4 8 week

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30 28

26 12 16 20 24 28 32 36 40 44 48 52

December 2012

% CHANGE -14.0% 13.6% -18.0% 2.4% 13.1% -9.5% 24.0% -26.3% -18.8% 6.5% -39.7% -22.4% 2.7% -2.5% 35.0% -5.1% 8.0%

TOTAL CARLOADS, OCTOBER 2012 vS. 2011 OCTOBER 2012 - 382,303 OCTOBER 2011 - 353,989 300,000 310,000 320,000 330,000 340,000

350,000 360,000 370,000 380,000 390,000

RAILROAD EMpLOyMENT, CLASS I LINEHAUL CARRIERS, OCTOBER 2012 (% change from ocToBer 2011)

Transportation (train and engine) 65,121; +1.65%

executives, officials, and Staff assistants 9,819; +4.97%

Professional and administrative 13,929; +0.18%

TOTAL EMpLOyEES: 162,443 % CHANGE FROM OCTOBER 2011: +1.37% Transportation (other than train & engine) 6,661; -0.98%

maintenance of equipment and Stores 29,708; +0.45%

maintenanceof-Way and Structures 37,205; +1.57%

EMpLOyMENT Up yEAR-OvER-yEAR AND FROM pAST MONTH figures released by the Surface Transportation Board show class I railroads employed 162,443 people in mid-october, up 1.37% from october 2011, and up 0.74% from September 2012. all categories gained year-over-year save one, Transportation (other than train & engine), down 0.98%, which also was the only declining category from the prior month, falling 2.36% from September 2012.

chemicals coal crushed Stone / Sand / gravel food & Kindred Products grain grain mill Products Lumber & Wood Products metals ores metals & Products motor Vehicles & equipmet nonmetallic minerals Petroleum Products Pulp, Paper & allied Products Stone, clay & glass Products Trailers / containers Waste & nonferrous Scrap all other carloads

ORIGINATED OCT. ’11 41,680 20,059 24,928 12,904 23,803 7,213 8,196 6,133 24,618 9,867 2,247 1,984 18,351 12,681 36,999 11,052 91,274

Source: Surface Transportation Board

2012

ORIGINATED OCT. ’12 35,846 22,778 20,450 13,215 26,913 6,530 10,160 4,519 20,002 10,504 1,356 1,540 18,848 12,363 49,963 10,484 116,832

By COMMODITy

36 34

carLoaDS

34 30

SHORT LINE AND REGIONAL TRAFFIC INDEX

Week-ended number

Industry Outlook AAR urges STB: Mark nat gas as coal competition

FRA, industry seek more awareness of workplace electronic device danger Federal Railroad administrator Joseph C. Szabo last month joined senior railroad industry leaders and labor officials to launch a collaborative effort to educate and raise awareness among rail industry employees of the dangers of using electronic devices on the job. at an event held at Union Pacific Railroad’s Proviso yard in Northlake, ill., Szabo encouraged rail companies to adopt anti-distraction programs and challenged all railroad employees to make the improper use of such devices while on the job socially unacceptable. FRa noted UP is an early leader in adopting a peer-to-peer program to eliminate electronic device distractions. “i have spent my entire career in the railroad industry, and i know firsthand how distractions can lead to danger,” said Szabo. “That’s why i’m calling on all rail industry employees to adopt a zero tolerance position on using electronic devices while working, building an even stronger safety culture where workers can confidently depend on one another to keep everyone safe.” “Distraction can impact anyone, whether they’re driving a car or working

in a railroad environment, and the consequences can be equally serious and even deadly,” added Transportation Secretary Ray laHood. “ending distraction will require everyone’s help.” FRa said the event “marks the launch of a collaborative outreach effort to encourage the establishment of peerto-peer programs that raise awareness among all railroad employees of the dangers of distraction. Railroad employees who improperly use electronic devices while on the job violate both federal regulations and railroad operating rules, while endangering themselves and possibly their coworkers, railroad passengers, and those who live and work along rail lines.” Following the September 2008 crash of a Metrolink regional passenger train into a Union Pacific freight train in Chatsworth, Calif. (photo above), the FRa in October 2008 issued an emergency Order to prohibit the use of electronic devices by railroad operating employees. FRa codified the order as a regulation, including all railroad employees, in September 2010.

NS completes Lamberts Point upgrade Norfolk Southern has completed a major upgrade to its lamberts Point export coal transload facility (Pier 6) in Norfolk, Va. The upgrade, costing $18 million, was completed on schedule over 6

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Decmember 2012

a 90-day period beginning in august. it involved major overhauls of the facility’s dumper system, which transfers coal from railcars to a conveyor system, and its two massive rolling loaders.

The association of american Railroads last month petitioned the Surface Transportation Board to initiate a rulemaking that would propose reintroducing indirect competition— specifically product and geographic competition for fuel used to generate power—as a factor to be considered in determining if STB has jurisdiction to hear rate cases involving the transportation of coal to coal-fired power plants. aaR said STB “has jurisdiction over rail rates only where a carrier is ‘market dominant,’ where it does not face effective competition. where railroads face effective competition, current law allows the market to determine the level of rail rates.” aaR said “ample public information” now exists allowing STB to determine where indirect competition in wholesale power markets exists and whether it effectively puts downward pressure on coal rail transportation rates, particularly given the low price of natural gas in recent years. “Considering that nearly two-thirds of all rate cases brought before the Board over the past 15 or so years involved coal, we believe the STB should consider the now-easily available evidence in relevant coal rate cases,” said aaR President and CeO edward R. Hamberger. “Times have changed, and today more information is publicly available. where indirect competition is present, we believe it should be factored into any Board determination of whether to review the level of rail rates for coal.” Prior to 1998, the STB considered indirect competition in rate cases, but then decided it was too difficult or burdensome to collect the information necessary to determine its effects on rail rates, aaR said. The STB eliminated consideration of indirect competition, but STB acknowledged at that time indirect competition in many cases did exist and had an effect on rail rates.

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Market

First four Metra Highliner cars arrive in Chicago On Nov. 14, 2012, Metra marked the arrival of the first four Highliner cars on the property, built by Nippon Sharyo, in conjunction with Sumitomo Corp. of america. assembled for completion at Nippon Sharyo’s Rochelle, ill., plant (shown above), the bilevel electric multiple-unit (eMU) cars are the first of 160 on order for the Metra electric line.

North America CHARLOTTE, N.C.: awarded a $26.3 million contract to atlanta-based Balfour Beatty Rail inc. and Charlottebased Blythe Development Co. for the city’s first streetcar line of 1.5 miles. MBTA (BOSTON): awarded alstom Transport two rail fleet modernization contracts with a combined value of approximately $220 million. One project includes the full modernization of 86 articulated light rail transit vehicles; the second involves retrofitting 74 bilevel MBTa regional rail cars. The contracts will be executed at alstom’s rolling stock manufacturing facility in Hornell, N.y.

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December 2012

MTA NEW YORK CITY TRANSIT: Tapped Cleveland Track Material to deliver five guarded, tangential geometry , double crossovers with 39-41-foot track centers on low vibration concrete tie blocks for New york’s Second avenue Subway and No. 7 line subway extension projects, both currently under construction. PORT OF LOS ANGELES : will receive a wireless remote control yard system from Fairport, N.y.-based RailComm,

which was selected by Oceanside, Calif.-based Herzog Technologies for the port project.

Worldwide ELECTRO-MOTIVE DIESEL: Officially opened its locomotive manufacturing facility in Seta lagoas, Brazil, located in the state of Minas gerais. eMD and parent company Progress Rail announced the site selection in July of 2011, and began work in earnest in February. The Sete lagoas facility is the first eMD locomotive assembly plant to open in Brazil in more than 20 years, and is part of a strategic approach by Progress Rail and eMD to compete in the global railway industry. The company will produce the eMD SD70aCe locomotive at the facility, among other models.

METRA

MIAMI-DADE COUNTY COMMISSION: awarded a $313 million contract for

136 transit cars to ansaldoBreda. The order comprises six pre-series vehicles and 130 production cars and will be a direct replacement for Miami-Dade Transit’s existing train fleet of 136 cars, which dates back to the opening of the network in the early 1980s.

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Update Supply BriefS Thales acquires Sysgo AG Thales has acquired Sysgo ag, a supplier of real-time, highly secure operating systems. Sysgo employs 80 people in germany, France, and the Czech Republic. Thales expects the acquisition to “strengthen our leadership in embedded computing solutions for mission-critical applications. at the same time, it will bring Sysgo access to the market for Thales solutions, consolidating the company’s position as europe’s leading provider of safe and secure operating systems while supporting its capacity to expand into new markets such as automotive.” Rail transport and avionics efforts will also benefit, Thales said. Sysgo will be a subsidiary of Thales while retaining its brand identity. The company will continue to be headquartered in Klein-winternheim, germany.

icahn ups interest in Greenbrier Companies

Railway age

December 2012

conomic Planning Associates (EPA) is predicting that 48,800 cars will be delivered in 2013— a 15% drop from 2012’s 57,200— followed by a “strong rebound” in 2014, to 60,300. “Assuming no further jolts to our economy from either U.S. Environmental Protection Agency regulations or the Obama Administration or external negative financial developments, we look for a stabilization in demand for most car types, with the exceptions of small cube covered hoppers and coal cars,” says EPA’s Peter Toja. “After strong deliveries in 2011 and the first half of 2012, demand for these hoppers weakened considerably in this year’s first half. As a result, our estimate of an easing in assemblies of small cube equipment from 15,000 units this year to 5,000 units in 2013 as well as the pronounced weakening in coal car demand will drop total railcar deliveries from 57,200 cars this year to 48,800 cars in 2013. In 2014, we look for railcar deliveries to rebound to 60,300. After 2014, annual assemblies will average 66,000 to 67,000 units per year out to 2017.”

Third quarter orders “reflected a modest improvement in demand for covered hoppers, mill gondolas, and class F equipment (auto carriers),” notes Toja. “Tank cars are by far the predominant car type in demand— primarily to transport oil from the Dakotas. In the second quarter, tank cars comprised 83.5% of railcar orders. Even with improvements among a variety of other railcars, tank car orders in the third quarter still accounted for 58.3% of the total. It has become readily apparent that increasing amounts of Bakken oil will move by rail. With strong orders this year and a backlog of 46,705 cars, we have significantly raised our short and long term outlooks on tank car deliveries.” Though Toja is “pleasantly surprised” by the modest expansion in demand for other car types, he remains cautious. “We are concerned about the underwhelming growth of the economy as manufacturers, oil and gas producers, and coal companies struggle with the increasing number of government regulations that are dampening our economic potential,” he says. “GDP growth slipped from 2.0% in the first quarter to 1.3% in the second quarter.

William C. Vantuono

Carl C. icahn and Reporting Persons affiliated with him have acquired 9.99% of the outstanding Common Stock of greenbrier. icahn, who also owns a majority interest in american Railcar industries, inc. (aRii), contacted greenbrier President and CeO Bill Furman to notify him of the investment and spoke about past discussions and investments with greenbrier. He suggested the parties have further discussions possibly relating to strategic opportunities. icahn added he believes that greenbrier shares are undervalued. greenbrier noted that “no specific proposals or opportunities have been suggested, nor any specific times established for further conversations” with icahn, a “respected investor.”

Freight car outlook: “Strong rebound” ahead

Hopefully, our economy can eventually embark on a stronger path of growth that will lead to continued healthy growth in railcar demand.” U.S. railroads reported that coal and agriculture were “extremely weak markets” during the third quarter,” Toja notes. “We suspect that coal will continue to underperform during the short and long term horizons. Coal movements continue to be depressed by a sluggish economy, low natural gas prices, and a hostile Environmental Protection Agency. In spite of the abundance of coal in the U.S., and industry efforts to clean up the mining and combustion sectors, the government continues to press for stringent regulations on the production and consumption of coal. Haulings are reflecting the dismal background. Through September of this year, rail coal movements were running 9.6% below the comparable period of 2011. Given these circumstances, Economic Planning Associates has lowered its sights on coal car deliveries. However, it does anticipate some modest growth in investments for export coal equipment and replacements within very old fleets. “Stricter air emission standards will promote the use of lower sulphur western coal, which is also lower BTU value coal, leading to greater volumes of coal traveling longer distances,” Toja says. “This, in turn, should lead to limited replacements of older, smaller, steel bodied coal cars with larger volume aluminum gondolas and hoppers. At the same time, eastern coal fleet requirements will stimulate demand for technologically advanced steel and hybrid cars. On a more positive note, the automotive market has improved and light vehicle sales advanced 10.2% last year. In response, a significant number of auto carriers were ordered in the fourth quarter of last year and in the first three quarters of this year. “We expect these

investments to be worthwhile since North American light vehicle production through September was running 19.9% ahead of the previous year,” Toja says. “The housing and construction markets should continue to stabilize as we proceed into 2013. Manufacturing activities will continue expanding, albeit at a moderate pace, leading to greater movements of metals, ores, fabricated products, and chemical and petroleum products. Export markets for corn and wheat are expected to rebound in 2013, weather permitting.” Toja believes that the covered hopper market “remains viable.” After this year, stronger production of ethanol from corn as well as a rebound in chemicals and plastics activities “will stimulate demand for hi-cube equipment while increased export volumes and greater domestic grain consumption will bolster demand for midsized cars,” Toja says. “Sharply higher energy prices are stimulating oil and gas exploratory activities and a large number of small cube cars will be built for oil and gas field service companies as well as other sectors of construction.” Strength in manufacturing and a rebound in steel demand revived orders for open-top gondolas, while increased

production from the Bakken Shale formation is promoting growth in small cube covered hoppers and tank cars. “We are hopeful that stronger economic activities will provide support for certain railcar assemblies while an improvement in the financial environment, high gasoline prices, and strong government backing will stimulate greater demand for ethanol and DDG (distiller’s dried grain) cars,” Toja says. “Replacement pressures and technological advances as well as legislative measures will also play a role. Construction activities should rebound, supporting movements of aggregates and structural steel products. Continued expansion in demand for petroleum products, chemicals, and food and beverages will prop up the demand for tank cars, the most dynamic element in the long-term railcar environment.” “Growing worldwide nutritional needs and expanding exports will pressure the current grain service cars as we proceed through the longer term while long neglected segments such as equipment to haul waste, aggregates, and limestone show signs of revival and should add to the railcar delivery mix in the years to come,” Toja concludes.

December 2012 Railway age 11

Update Watching Washington With Frank n. Wilner

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December 2012

Did someone say “gridlock”? For railroads, election Day was the overture. Partisan politics will resume in Congress, with few changes in Obama administration-controlled regulatory policies. railroads are vulnerable to an environmental agenda. Consider coal, from which railroads derive almost 25% of revenue. anticipate continuation of environmental Protection agency stringent greenhouse gas emissions standards, impairing the domestic steam-coal franchise. That and competition from natural gas has hastened a phasing out of aging coal-fired generating plants, with U.S. electricity generated by coal plunging from near 50% in 2009 to the mid-30s late this year. Utility coal stockpiles are high. a more flexible ePa approach is problematic, and export of metallurgical coal is hostage to an unsettled global economy. While western railroads are better positioned, owing to cleaner burning Powder river Basin coal, pressure by environmentalists to thwart expansion of Pacific northwest export coal and rail terminals, and a cooling of the Chinese economy—China uses more coal than the U.S., europe, and Japan, combined—is a dark cloud. Yes, western railroads have new revenue from carrying construction materials for Bakken formation crude oil drilling, plus the transport of 300,000 barrels daily of that oil. Construction of the keystone Xl Pipeline, likely to be approved in 2013, is troubling longer-term. and while eastern railroads are transporting construction materials for extraction of Marcellus Shale natural gas, be mindful that the last time the former new York, new Haven & Hartford railroad made a profit was hauling cement to build the new england Thruway. Then there is the elevation of environmentalist ron Wyden (D-Ore.) to chair the Democratic controlled Senate energy Committee. He supports legislation to cut coal emissions and opposes expanded coal export facilities. additionally, as lawmakers retreat from the fiscal cliff, carbon-tax credits appear a Democratic non-starter, while a $20-per-metric-ton carbon emissions tax is a republican

non-starter. Compromise should nix both. Railroads hold greater sway over economic and safety policy. On the House Transportation & Infrastructure Committee, Bill Shuster (R-Pa.) succeeds John Mica (R-Fla., pictured opposite) as chairman. While Mica could chair the Rail Subcommittee, succeeding Shuster, Spencer Bachus (R-Ala.) is more likely. Each of the three will ensure Staggers Act provisions rollbacks are dead-on-arrival. Mica and Shuster wrote the following to the Surface Transportation Board— a letter signed also by T&I’s ranking Democrat Nick Rahall of West Virginia and Rail Subcommittee ranking Democrat Corrine Brown of Florida: “Any policy changes made by the STB that restrict the railroads’ abilities to invest, grow their networks, and meet the nation’s freight transportation demands will be opposed.” Shuster is a railroad favorite, owing to his Dickinson College roommate days with Union Pacific lobbyist Mike Rock, who was a legislative aide to Shuster’s father Bud, a previous T&I Committee chairman. AAR President Ed Hamberger previously was a special counsel to a Bud Shuster project. Mica has had a jihad against everything Amtrak. Shuster, while opposing high speed rail funding, actually rides Amtrak. There is concern that Mica will champion shifting scarce federal dollars from Amtrak to commercial aviation. This concern surfaced after two of his close aides—Jim Coon and Sharon Pinkerton—took high-level aviation industry posts. One scenario being suggested is that Mica will attempt to divert dollars from Amtrak to aviation in order to weaken Northeast Corridor rail service in favor of strengthening airline shuttle service along the corridor. Others are suggesting that Mica is still angry that Amtrak chose its Lorton, Va., Auto Train facility for rehabilitation and expansion rather than the Sanford, Fla., terminal in his home state—and he is not known for retreating from a grudge. Neither scenario seems plausible in the real world—but

Washington is not the real world. Mica generally declines to give any reason for his attacks on Amtrak other than that he wants to save taxpayers money. Spencer Bachus supports Amtrak and is especially supportive of short line rail tax credits that expired in 2011. Bill Shuster calls transportation infrastructure a “core function” of government, tracing its promotion to free-market spiritual leader Adam Smith. While Shuster supports Positive Train Control, railroads have a compelling case for delaying implementation. Stay alert. The Senate Commerce Committee’s ranking Republican will be South Carolina’s Jim DeMint, a Tea Party leader. He succeeds consensus-building Kay Bailey Hutchison (R-Tex.), who is retiring. Hutchison’s former chief of staff, Amy Hawkins, is a BNSF lobbyist. Says DeMint: “The warrior role is going to be the governing role . . . we don’t have shared goals with Democrats.” Railroads find DeMint distant. He ignores invitations to gather with rail leaders and lawmakers to discuss rail issues. Captive shipper friend Jay Rockefeller (D-W.Va.) again chairs the Senate Commerce Committee. Did someone say “gridlock”? Should Transportation Secretary Ray LaHood depart, Steve LaTourette (R-Ohio), who is retiring, is on a short list of successors. There are also rumors that LaTourette could head to the AAR. At the STB, a Democrat will be nominated to succeed Democrat Frank Mulvey. Amtrak Vice President and former Senate Commerce Committee aide Steve Gardner and former STB member William Clyburn are mentioned as possible nominees. Dan Elliott remains STB chairman. Joe Szabo remains FRA Administrator. National Mediation Board Democrat Harry Hoglander will be renominated, moving in tandem for confirmation with a yet-to-be-named Republican. Former Norfolk Southern attorney Steven Anthony is rumored a possible successor to Railroad Retirement Board management member Jerry Kever, who holds an expired seat. December 2012 Railway age 13

Update Sumitomo lands Midwest/Calif. HrSR order Sumitomo Corp. of America last month officially was awarded a $352 million contract from California’s Department of Transportation (Caltrans) and Illinois DOT (IDOT) for 130 railcars destined for higher-speed rail (HrSR) use in California and the U.S. Midwest. The joint procurement between Caltrans and IDOT is described as “the final step in a first of its kind multi-state procurement that will also see new railcars delivered to Michigan and Missouri.” California will buy 42 railcars and the Midwest coalition will buy 88 railcars, which will operate out of Amtrak’s Chicago hub. The new cars are designed for operation at speeds up to 125 mph. Sumitomo will deliver the railcars through carbuilder subcontractor Nippon Sharyo, which will build the cars at its new plant in Rochelle, Ill.The Rochelle plant also is to handle an order for Metra Highliner equipment (see p. 8). This next-generation equipment procurement is being funded through the Federal Railroad Administration and has met all requirements to ensure that the final assembly be prepared by American workers, with American-sourced steel, iron, and manufactured components. “Illinois is committed to building a high-speed, 21st

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century rail system and leading the nation in rail equipment manufacturing,” Illinois Gov. Pat Quinn said. “By working together with other states, the federal government, and outstanding Illinois-based companies like Nippon Sharyo, we can put people back to work and advance Illinois’ role as one of the nation’s top transportation hubs.” In October, Quinn, Sen. Dick Durbin (D-Ill.), and Transportation Secretary Ray LaHood marked the upgrade of rail right-of-way between Pontiac and Dwight, Ill., to 110 mph standards, the first step toward a larger upgrade for passenger rail service linking St. Louis and Chicago (RA, October 2012, p. 35). Union Pacific owns most of the rightof-way along the route plied by Amtrak intercity service. “Sumitomo Corp. of America, with our carbuilder subcontractor Nippon Sharyo, is pleased to be selected for the U.S.’s first high-speed railcar procurement under the American Recovery and Reinvestment Act of 2009. We also look forward to working closely with these four transit authorities and to be part of the growth of their surrounding communities,” said Hideyuki “Hugh” Ninomiya, director, Transportation Systems and Equipment, Sumitomo Corp. of America.

Siemens AG to acquire Invensys Rail Invensys announced Nov. 29 it will sell Invensys Rail to Munich, Germany-based Siemens AG for $2.8 billion. Invensys said the sale follows a strategic review which concluded that consolidation in the signaling industry would limit the scope for expanding the company’s rail activities. The disposal, which has been agreed on a cash free/debt free basis, is still subject to shareholder approval at Invensys’ general meeting this month and subject to regulatory consent, with completion expected in the second quarter of next year. London-based Invensys plc noted that Invensys Rail has made significant progress in recent years expanding its business outside Britain, its traditional core market, to the extent that new markets including Spain, Australia, and North America now account for 64% of its order book. But Invensys says consolidation in the signaling industry means there is only limited scope for increasing the size of the rail business. “The key issue with consolidation is that rolling stock manufacturers would be reluctant to part with key assets in signaling, so we would only have very limited ability to become the consolidator,” said Invensys CEO Wayne

Edmunds. “We therefore decided to seek a partner and Siemens was an easy choice being a clear leader in the signaling market.” A strategic review by Invensys concluded that the group should focus on developing its industrial software, systems, and control equipment businesses, and the disposal of the rail unit would allow the company to address its pension liabilities while generating funds for investment. For its part, Siemens AG told investors its acquisition would bolster profitability, and help the company compete with rival manufacturers such as Fairfield, Conn.-based General Electric Co. and Zurich, Switzerland-based ABB. The deal will help lift the operating profit margin of Siemens’ Infrastructure & Cities division by more than one percentage point in fiscal 2014 from 7% last year, I&C Chief Executive Roland Busch said. Invensys earlier had indicated it had been considered by other suitors, including Emerson Electric and China South Locomotive. Siemens’ Busch said his company had been pondering acquisition of Invensys Rail for a decade, making the move now as it saw an opportunity to buy Invensys without taking on future pension liabilities.

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Update New from S-B Books: Amtrak—Past, Present, Future Amtrak—Past, Present, Future. By Frank N. Wilner. 238 pages, softcover, $34.95. SimmonsBoardman Books, www.transalert. com, (800) 228-9670 (U.S. and Canada), (402) 346-4300. Frank N. Wilner, no stranger to Railway Age readers, has—18 years after writing The Amtrak Story— delivered a definitive update. Amtrak: Past, Present, Future is his sixth book, which Dan Weikel of The Los Angeles Times says explains “how to tap Amtrak’s potential at a time in the nation’s history when passenger railroading is becoming increasingly necessary.” Says former FRA Deputy Administrator Cliff Eby, “No statute, policy statement, or quote is left unanalyzed.” But don’t think for one second that this book is a purely academic exercise. Wilner has always had a flair for now-obscure events that have proved equally important as the passing of a statute or crafting of a policy statement. From Chapter 1, “Who Shot the Passenger Train?”: How aggressive had the railroads become in seeking to eliminate

passenger trains? Consider an event on the Chicago, Burlington & Quincy in August 1969. Shortly after receiving authority to discontinue one of its passenger trains, CB&Q halted that train enroute to Rome, Neb., ordered all the passengers off the train, and escorted them to waiting buses the railroad had procured. Among the rousted passengers was U.S. Congressman Glenn Cunningham of Nebraska, and what might have been a rude inconvenience turned into front-page news owing to Cunningham, who also happened to be a member of the House Commerce Committee that, at the time, held regulatory oversight of railroads and the Interstate Commerce Commission. An enraged Cunningham obviously had immediate access to a telephone, for within hours of the railroad’s abrupt halting of the train and forced disgorgement of its passengers, the ICC issued a press release: “Yesterday’s action was taken without the knowledge of the ICC.The Commission will not condone such treatment of the traveling public.” Almost simultaneously, Supreme Court Justice Hugo Black signed an order restoring the annulled train pending outcome of further litigation. As Rep. Cunningham demonstrated, it’s valuable to have friends in high places. Those who would appreciate a thoroughly enjoyable rendering of the real Amtrak story need look no further than Wilner’s book. —William C.Vantuono

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Perspective: Short Line & Regional RiCHaRD F. TiMMONS

Small shifts amid the bigger political picture

fter billions of dollars in advertising and almost two years of non-stop campaigning, the winner is—the status quo. President Obama remains President, the Senate remains Democratic, and the House remains Republican. The Republicans lost seats in the House and Senate, but not enough to change the current dynamic. However, some results are worth noting from the perspective of the railroad industry. Last summer, the House Transportation and Infrastructure Committee (T&I) held a key vote on the truck size and weight issue. The railroad industry supported a two year study in lieu of an increase in truck size and weight and the study amendment won 32 to 22. We lost through defeat or retirement 9 of the 32 favorable votes and only 3 of the 22 opposing votes. We don’t expect that vote to be repeated in 2013, and we don’t know who will replace those individuals on T&I, so this should be a cautionary note for the industry. The co-sponsorship of the two truck size and weight bills barely changed. The pro-big truck bill lost 4 of its 61 co-sponsors and the anti-big truck bill lost 2 of its 58 co-sponsors. In the House, the short line industry lost through defeat or retirement 47 of our current 255 short line tax credit legislation co-sponsors. In the Senate, we lost 8 co-sponsors. These individuals will still be voting Members of Congress during the lame-duck session and I believe there is still a chance the 45G tax credit will be part of a year-end tax compromise. An extension of the short line tax credit, retroactively for 2012 and through 2013, is already included in the Senate Finance Committee version of the so-called extenders package. Because of our large and bipartisan group of

co-sponsors in the House, I believe our extension will be included if the Congress can reach a compromise on the larger tax issues. The full T&I Committee lost 13 Members through defeat or retirement and four of those served on the T&I’s Railroad Subcommittee.

The next Congress will be our most challenging ever. The Freshman Republican class of 2010 remained relatively intact. There were 88 Members of that class and as of this writing only 15 were defeated. That number could increase slightly when the current seven “too close to call” races are decided. But it appears that a conservative voting block will remain a consequential portion of the House Republican majority and continue to have an impact on tax and spending issues. The House will include more than 80 new Members, many of whom will likely have little knowledge about the railroad industry and the issues that affect us. That presents us with a big educational challenge and will make the 2013 Railroad Day on the Hill, set for March 14, very important. I encourage every rail industry company to send a representative. The ASLRRA Political Action Committee (PAC) is the vehicle through which the short line industry provides campaign dollars to its supporters in Congress. In this two-year cycle, the PAC gave contributions to 20 Members of Congress and I am pleased to report that 19 of those Members were re-elected. Here are some of the things we can

expect going forward: For the short line industry, extending the 45G tax credit will remain a top priority regardless of what happens in the lame duck session. With everyone talking about comprehensive tax reform and an increasing focus on individual tax provisions, the next Congress will be our most challenging ever. I remain optimistic on three fronts. First, the short line tax credit is all about allowing small businesses to invest more of what they earn in capital projects that create jobs and help grow their businesses. That narrative should have broad appeal in Congress. Second, short line railroaders have continually demonstrated the ability to attract broad, bipartisan support for the tax credit and I expect them to repeat that success in the next Congress. Finally, for the first time since the 45G tax credit was enacted in 2004, not one of our lead House or Senate sponsors was defeated in the election. We anticipate that each of these four individuals will once again play a leading role in our effort. T&I Committee Chairman John Mica (R-Fla.) has reached his six-year term limit as chairman and unless he receives a waiver will have to relinquish that post. Rep. Bill Shuster (R-Pa.) appears to be the favorite to succeed Mica as full committee chairman. Shuster currently serves as the Chairman of the Railroad Subcommittee, and if he succeeds would be the first Railroad Subcommittee Chair to become full Committee Chairman. The current Administration’s bias against coal and other below-ground energy sources is likely to remain unabated during the next four years. This will continue to present huge challenges for the railroad industry as a whole. Richard F.Timmons is president of the American Short Line and Regional Railroad Association (ASLRRA). December 2012 Railway age 17

this washout on new Jersey transitâ&#x20AC;&#x2122;s north Jersey Coast line along Raritan Bay near south amboy, n.J., was one of several that contributed to a two-week service interruption.

When the trains stopped By William C. Vantuono, Editor-in-Chief; Douglas John BoWEn, managing Editor; and misCha WanEk-liBman, Engineering Editor

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hurricane sandy stranded millions for days. it Will take billions to fully recover from the monster storm’s Windy, Watery Wallop.

©NJ TRANSIT

he U.S. Federal Emergency Management Agency (FEMA) has estimated that “Superstorm Sandy,” possibly the worst natural disaster on record to hit the Northeastern United States, resulted in the loss of 72,000 homes and businesses, and will cost billions to recover from. The Monday, Oct. 29 hurricane and its massive water surge crippled the largest, most complex, busiest network of passenger rail lines in North America—those of the New York Metropolitan Area. The region’s systems— MTA New York City Transit, MTA Long Island Rail Road, MTA Metro-North Railroad, New Jersey Transit, Amtrak, PATH, Staten Island Railway, which combined move approximately six million people a day—are engaged in an intense damage repair and service restoration effort, the likes of which have never been seen before. Other Northeastern systems—SEPTA, MBTA, MARC, VRE, PATCO, Shoreline East—sustained damage, though not as severe. NJ Transit Executive Director Jim Weinstein can attest to Sandy’s devastating impact perhaps better than any of his peers. NJT took the worst hit of all, and, as of late November, was still working round-the-clock to bring its statewide rail system of nine regional/commuter rail and three light rail lines back to full operation and a state of good repair. It will be weeks until service is back to pre-Sandy level. “Our prime responsibility is to get our system up and running,” Weinstein told Railway Age. “We’re not fully there yet.” Added Rail Operations Vice President and General Manager Kevin O’Connor, “Our recovery effort is not a sprint. It’s a marathon.” NJT estimates its damage from Sandy to be about $400 million, with roughly 30% of that amount attributable to damage to its regional/commuter rail fleet. While local press reports have focused on the 65 locomotives and 257 railcars that were damaged by the unprecedented flooding caused by a storm “with remarkable destructive power,” the equipment, all of which is repairable, represents only 10% of NJT’s fleet. “None of the operational constraints we’re dealing with have been due to lack of equipment,” Weinstein stressed. “What we’re mostly dealing with is our infrastructure.” Service has been returning to NJT lines incrementally. Service to Hoboken Terminal, which was engulfed in five feet of Hudson River water and muck, remained partially suspended as of late November, with the facility’s catenary system relying on generator power. Likewise, generators were being used to power catenary at NJT’s Meadows Maintenance Complex (MMC) in Kearny. December 2012 Railway age 19

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two tugboats hit nJ transit’s River Draw spanning the mouth of the Raritan River, shifting the structure eight inches off its pilings in some spots.

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a lone signal entangled in debris stands as a grim reminder of sandy’s devastation.

NJT is not a toy train set. You can’t just pick up your trains and move them somewhere else. It takes 12 hours to shut the railroad down.” NJT did not want to strand equipment, Weinstein said. In 2011, NJT stored equipment at its Morrisville, Pa., yard, just west of Trenton on the Northeast Corridor, during Hurricane Irene. Trenton flooded, isolating Morrisville and seriously curtailing service restoration on the busy NEC. “It’s amazing to me how wise people become after the fact,” said Weinstein, who surveyed NJT’s damage from a U.S. Army Blackhawk helicopter. “How we prepared for this event will stand the test of an objective, professional assessment. Our critics, the Monday morning quarterbacks, are Progress Rail Services, parent company of Electro-Motive Diesel and a subsidiary of Caterpillar, Inc., displayed several Caterpillar diesel powerplants. Cat offers various powerplants for locomotive traction power, head-end power, and maintenance-of-way machines.

PHOTOS © NJ TRANSIT

Not surprisingly, NJT’s North Jersey Coast Line was the hardest hit of the agency’s regional/commuter rail lines. A dramatic example of Sandy’s intensity occurred at River Draw, a long swing-bridge structure spanning Raritan Bay. Not one, but two heavy tugboats that had broken from their moorings hit the bridge, knocking it eight inches off its pilings in 30 places (photo, below). Morgan Draw, near Matawan, was jammed with several pleasure boats, among other debris (cover photo). Electric service from Long Branch into New York Penn Station, with connecting diesel shuttles to coastal Bay Head, N.J., took two weeks after Sandy’s wallop to restore. It was operating on a modified schedule, with weekly changes as infrastructure was repaired. Severe damage to the public utilities and Amtrak power systems that supply power to NJT made matters worse. For example, Amtrak Substation 41 in Kearny, N.J., which supplies traction power to the NEC between Newark and New York, was completely submerged, severely limiting the number of electric trains that could be operated. It was finally reactivated on Nov. 16, allowing NJT NEC service to resume. Most of NJT’s equipment damage (mostly traction motor/ gearset combos and wheelsets) occurred at the MMC, a lowlying shop complex that, up until Sandy, had never flooded. Responding to critics who chastised NJT’s decision to store equipment there during the storm, Jim Weinstein told Railway Age: “I think the decision we made in light of the information we had, our experience with Irene and Floyd (two previous storms), and the fact that the MMC had never flooded, was the right one. The National Weather Service said there was an 80% to 90% chance that area would be dry.

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How the region is recovering

New York City Transit had to pump millons of gallons of floodwater out of numerous subway tunnels connecting Manhattan with Brooklyn and Queens.

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PHOTOS MTA New York City Transit

entitled to their opinions. They can’t make up the facts.” What’s not so amazing is how the industry came together to help NJT get back on its feet. For example, Progress Rail and Norfolk Southern’s Thoroughbred Quality Services began immediately supplying replacement combos and wheelsets. Amtrak, Bombardier, and the LIRR opened the Arch Street locomotive shop adjacent to Sunnyside Yard in Queens to repair 11 damaged ALP-45DP dual-power locomotives and several MultiLevel cars. Canadian Pacific, working with Amtrak, allowed 21 new, sorely needed Bombardier MultiLevel cars to be delivered in a single move on a passenger route, rather than at a rate of two cars every 10 days over a CP freight-only line. Short line Morristown & Erie provided NJT use of its drop table for equipment repairs. Other railroads have supplied equipment like ballast-dump cars, and manpower, to assist NJT. The same can be said of the NJT employees, both agreement and non-agreement, “who have banded together, tirelessly working side-by-side, to bring the railroad back to where it needs to be.” Weinstein said a thorough assessment will be made after the operation is fully restored. “We’ll go back and take a look at what we did well, and what we need to change,” he said. One change will be to relocate NJT’s ROC (Rail Operations Center) well away from the MMC, on higher ground. As far as insulating its rail system from future monster storms, the cost will be upwards of $500 million. “Nothing comes cheap,” Weinstein said.

Passenger rail’s overall recovery in the Northeast can be measured in concentric circles focused on the rough epicenter of New Jersey-New York. Operators on the ends of the Northeast Corridor lost just one full day of rail service, contrasting sharply with New York’s MTA properties and NJT. Amtrak cancelled some trains as early as Sunday morning, Oct. 28, and shut down the entirety of its operations along the NEC on Oct. 29 and 30, with most East Coast service suspended. Amtrak Oct. 31 resumed service between Washington and Virginia points including Lynchburg, Richmond, and Newport News. NEC service thereafter slowly extended north from Washington and south from Boston, reaching Newark Liberty Airport Rail Station Oct. 31 and New Haven Nov. 1. On Nov. 2, Amtrak ran modified Northeast Regional and Acela Express Boston-New York-Washington services, after clearing, cleaning, and reactivating one Hudson River tunnel and two East River counterparts. Amtrak cleared those three tunnels late Nov. 11, with LIRR and NJT benefitting as a result. But ongoing tunnel repairs in the two remaining East River tunnels are not expected to be completed until January. Normal LIRR service on 10 of the railroad’s 11 lines was reinstated Nov. 12, following days of piecemeal addition. Limited service on the Long Beach Branch, serving coastal areas hit hard by winds, flooding, and storm surge, resumed Nov. 13, with a diesel shuttle train service operated on weekdays only. Full service on the Long Beach Branch was restored Nov. 26, making the LIRR’s recovery virtually complete. One choke point remained, and it was a significant one: ongoing work being performed by Amtrak to fully restore capabilities in two of the four East River tunnels owned by Amtrak, but used primarily by the LIRR. LIRR officials said the railroad could only operate at about 70% of normal rush-hour capacity under such conditions. Metro-North, the shining regional railroad star, strutted its stuff by getting nearly all of its East-of-Hudson rail service back in operation within one week of Sandy’s landfall, minus only its New Canaan Branch in Connecticut, which was restored Nov. 13. The railroad’s Harlem Line saw limited service restoration

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first, on the afternoon of Nov. 1, since it was less susceptible to flooding and storm surge compared with Metro-North’s New Haven Line, which also staggered back into operation late Nov. 1, or the Hudson Line, skirting the namesake river. The Hudson Line resumed operations Nov. 2. West-of-Hudson services were hampered by severe damage to both New York State and New Jersey points, notably Hoboken Terminal. Dire predictions of catastrophic service discontinuance were rapidly overcome as New York City Transit quickly restored services line-by-line and tunnel-by-tunnel, earning rare plaudits from citizens and news organizations more accustomed to criticizing subway service routinely. By November’s end, only interborough service on the R subway line was still disrupted, due to severe flooding and partial tunnel collapse. NYCT launched a truncated “H Train” shuttle Nov. 20 to serve Brooklyn shore points hammered by the hurricane, trucking in equipment to provide the service, linked to the rest of the subway system (primarily the A train) by circuitous but functional shuttle bus service. The damage wreaked by Sandy on the MTA came into clear focus when New York Gov. Andrew Cuomo’s office released the first breakdown of $5 billion in estimated costs the agency faces from the superstorm. Cost estimates to repair two severely damaged areas, the Rockaway (A train) line in Queens

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(along the waterfront), and South Ferry and Whitehall stations in lower Manhattan, total $1.25 billion. Flooding in both of PATH’s Hudson River tunnel routes and at its Hoboken Terminal facility was severe; PATH re-established very limited cross-river service between Journal Square, Jersey City, and midtown Manhattan Nov. 7, extending the route to Newark Penn Station Nov. 12, but skipping two stops in Manhattan due to platform crowding concerns. PATH service to and from downtown Manhattan, including Exchange Place in Jersey City, resumed Nov. 26. PATH service to Hoboken was still lacking as the month ended. Tellingly, spokespeople for PATH and its parent, the Port Authority of New York & New Jersey, repeatedly declined to offer any specific estimates for service resumption, finally acknowledging Hoboken would be out of service “for weeks.” PATH did estimate service repair costs would total $300 million. The MTA on Nov. 16 said the Staten Island Railway won’t have full service restored until at least March 2013. “The St. George Terminal signal system experienced extensive water damage,” the agency announced. “As a result, train operation there is severely affected as we can only operate trains on two of the tracks.” The Massachusetts Bay Transportation Authority was spared Sandy’s worst fury, and held off shutting down rail service until 2:00 p.m. on Oct. 29, when other agencies had been shut down for 20 hours. As well, MBTA was among the first to restore service by resuming subway services with bus substitution on the Green Line D branch on Oct. 30. MBTA regional rail service also began returning, with delays, that day. Critics faulted MBTA in 2011 for shutting down too early in the face of Hurricane/ Tropical Storm Irene. For Sandy, MBTA was criticized by some for its late decision to shut down service. SEPTA halted all rail service 12:30 a.m. on Oct. 29, but aggressively sought to re-establish service, with some subway/surface lines resuming operations the following day. Regional Rail service resumed Nov. 1 as Amtrak restored its own service to 30th Street Station, Philadelphia, a major SEPTA hub. Like MBTA, SEPTA was criticized for its shutdown timing, but in SEPTA’s case the lament was that SEPTA closed too soon. Elsewhere, PATCO’s bistate rail operation ceased service Oct. 28, but quickly followed SEPTA’s lead by restoring service Oct. 30. Connecticut’s Shoreline East resumed near-normal operations between eastern Connecticut points and New Haven on Nov. 1. Plagued more by rain than by high winds or storm surge, Virginia Railway Express quickly restored near-normal regional rail service to and from Washington, D.C. by the morning of Nov. 1. Slightly behind VRE, Maryland Area Transit Corp. resumed service on its two MARC regional rail lines, and on its light rail transit and subway routes in Baltimore, on Nov. 1. ra

hoW conrail put people first within six hours of Sandy’s passing, Conrail resumed operations

rules were invoked in the absence of wayside signals.” Conrail’s post-Sandy assessment “confirmed that our people

in the north Jersey and Philadelphia Shared assets areas. at the same time, the railroad was providing assistance to

had done the right things to preserve equipment,” noted Batory.

employees and their families who had been impacted by the

“there were 6,000 freight cars on hand at the time of the

storm. “we met Sandy with the usual preparedness of any past

storm. only 58 (1%) were damaged on Conrail tracks; 267 (5%)

storm,” President and Coo Ron Batory told Railway age. “that

were damaged on industry tracks. we had 54 locomotives on

involved taking risk aversion actions, continuous

hand, and five (9%) sustained damage.most significant to the

communication, and post-event contingencies. But the most

consumer market was approximately 4,000 new vehicles were

critical component to our success in being able to operate

awaiting to be dispatched to dealers. only 20 were damaged

trains within six hours of the storm’s passing was our people.”

beyond deliverable status.” For the employees and their families, Conrail provided dry

Conrail operated two new Jersey 24-hour command centers for nearly five days, providing coordinated leadership, at oak

food and staples, fuel for their commuting vehicles, hot meals,

island yard, newark (tactical response) and the mount laurel

and on-site bathroom facilities. temporary housing was afforded

operations Center (strategic direction). immediate post-event

to those who lost homes, and a zero interest loan program was

actions were vital to resuming train operations: inspecting the

offered to eligible employees. “People at Conrail treat each

physical plant, inspecting equipment, and establishing an

other well,” said Batory. “this was amplified with all the grocery

employee welfare station at oak island.

stores, gas stations, hotels/motels, and restaurants that were

“the assessment post-event of our physical plant allowed our

either closed or destroyed. our employees responded to the

people to put their creativity and sense of urgency to good use,”

aftermath of Sandy with their usual high attendance rate and

said Batory. “materials and supplies were dispatched to restore

injury-free performance. our reclamation and restoration efforts

washouts. mobile generators were dispatched to all signal and

continue to be less each day, while the bond and respect Conrail

communication locations incurring public utility service

employees have for each other continues to strengthen to the

interruption. grade crossings awaiting portable generators were

benefit of our joint owners, CSX and norfolk Southern, and

protected with Conrail employees flagging. alternate operating

ultimately the customers served on their behalf by Conrail.”

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December 2012 Railway age 25

Washington Marriott Hotel February 4–5, 2013 Railway Age/Parsons

10th International Conference on

COMMUNICATIONSBASED TRAIN CONTROL

•Efficiency •Productivity •Safety

ConferenCe topiCs • innovation, sustainability, and the future • international railroad and transit project updates • CBtC/ptC user roundtable • Business operations and applications • CBtC upgrades to Mature systems • CBtC/ptC supplier roundtable • rf solutions for CommunicationsBased signaling

Why you should attend Communications-based train control (CBTC) is revolutionizing all modes of railway transportation, passenger and freight, by adding capacity, increasing train throughput, enhancing safety, and reducing equipment life-cycle costs. The Tenth International Conference on Communications-Based Train Control, presented by Railway Age and Parsons, will provide status reports on exciting, state-of-the-CBTC projects and share information on initiatives to standardize this technology and insure interoperability.

MarKetinG opportunities: event sponsorships are available. Contact Jane poterala at 212-620-7209 or email jpoterala@sbpub.com

For program updates visit: www.railwayage.com/conferences

February 4th, 2013

February 5th, 2013

Continental Breakfast | Sponsorship Available

Welcome William C. Vantuono, Editor-in-Chief, Railway Age Tom Barron, President, Parsons Group

CBTC/PTC Supplier Roundtable Moderator: William C. Vantuono, Railway Age Participants to include representatives from Bombardier, GE Transportation, Thales Transport and Security, Wabtec Railway Electronics, Ansaldo STS USA, Alstom Signal, Siemens, and Invensys Rail

Keynote Address Tom Prendergast, President, MTA New York City Transit Project Updates, Rail (PTC) Moderator: David Thurston, Parsons • ETMS, North American Class I’s • ACSES, Amtrak Northeast Corridor • PTC, Metrolink/Caltrain

CBTC Upgrades to Mature Transit Systems Moderator: David Thurston • WMATA • BART • Copenhagen Coffee Break | Sponsorship Available

Coffee Break | Sponsorship Available Innovation, Sustainability and the Future Moderator: William C. Vantuono, Railway Age Luncheon | Sponsorship Available Luncheon speaker to be announced CBTC/PTC Owner Roundtable Moderator: William C. Vantuono, Railway Age Participants to include representatives from PATH, NYCT, Toronto, Copenhagen, Madrid, BART, Amtrak, North American Class I’s Energy Break | Sponsorship Available

Project Updates, Transit (CBTC) Moderator: William C. Vantuono, Railway Age • PATH • NYCT • TTC Luncheon | Sponsorship Available Tom Sullivan Memorial Award Presentation Luncheon speaker to be announced RF Solutions for Communications-Based Signaling Moderator: David Thurston, Parsons Program subject to change/augmentation

Business Operations & Applications (Customer Enhancements) Moderator: David Thurston, Parsons

Sponsorships available Contact Jane Poterala at 212-620-7209 jpoterala@sbpub.com

Cocktail Reception | Sponsored by Parsons

Please register me for Tenth International Conference on Communications-Based Train Control taking place February 4-5, 2013 in Washington, D.C. Registration fee is $925 per participant. All fees payable in advance.

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RegistRation: Please send this completed form, or a photocopy, with your payment to: Jane Poterala, Conference Director, Railway age; 345 Hudson st., 12th Fl., new York, nY 10014; tel.: (212) 620-7209; Fax: (212) 633-1165; e-mail: jpoterala@sbpub.com. ConFeRenCe Fee: the registration fee for CBtC 2013 includes admission to all conference sessions, conference documentation containing all available presentations, and social events. Registration confirmation and invoice will be e-mailed. Hotel: the Washington Marriott Hotel has set aside a block of rooms at $219 single/double for

conference attendees. these will be held until 30 days prior to the conference; those reserving after that date will depend upon room availability. We suggest that you contact the hotel directly at (202) 872-1500 for room reservations. specify “Railway age.” You will receive room confirmation directly from the Washington Marriott Hotel. CanCellation PoliCY: Confirmed registrants who cancel after January 23, 2013 are subject to a $250 service charge. Registrants who fail to attend are liable for the entire fee unless they notify Railway age in writing prior to the event.

2013 Freight rail OutlOOk

the challenge OF change

Railway age

December 2012

A strong, resilient industry heads into 2013 planning for growth—and change. By william C. Vantuono, editor-in-Chief

William C. Vantuono

esilience and resourcefulness are two terms that have become closely associated with North American railroads in recent years. The industry has emerged from the worst economic recession since the Great Depression in relatively solid shape, and enters 2013 positioned for growth. More important, it has demonstrated that it is capable of dealing with changes in its traffic base that not so many years ago would have dealt a crippling blow. The big change has been the precipitous drop in coal, once the railroads’ single-largest revenue source. Cheap and abundant natural gas combined with tightened environmental regulations on coal have taken some of the gleam off the black diamonds that the industry has relied upon for generations. But in a not-sostrange twist, the abundance of natural gas has actually worked in the industry’s favor, because a highly efficient, rapidly growing means of extracting it from the ground—fracking—is now big business for railroads, the single-most efficient and productive form of surface transportation. This same efficiency and productivity have been the catalysts for growth in intermodal, which has consistently seen increases in traffic. All this, combined with continued strong pricing power, underpins an industry that in 2013 is expected to surpass $20 billion in capital investment. “Significant long-term potential exists in the intermodal market,” CSX chief executive Michael Ward told Railway Age. “We continue to seek opportunities to expand new markets and lanes and convert highway shipments to rail. In the long term, we see the total addressable opportunity to convert highway freight to rail in the eastern U.S. at more than nine million loads per year. Our strong service product will be important to converting those loads. “Developing energy markets also offer opportunities as new domestic reserves of natural gas and crude oil are tapped. This growing market has driven increased demand for specialized sands moved by CSX to wells from which natural gas is extracted. In addition, CSX has been working closely with customers to develop rail direct or rail-to-terminal options to move crude oil from the West to the eastern refinery base. “We continue to see weakness in domestic coal markets that face significant headwinds from the low price of natural gas, above-normal utility inventory levels, and environmental regulation. Export shipments, however, are strong. In general, we expect the U.S. to continue to be a strong supplier of world coal in the long term.” Kansas City Southern, according to chief executive Dave Starling, “would like to see a stable domestic U.S. energy policy that includes our nation’s most abundant energy source, coal. We hope to see sensible regulatory relief toward the rail and energy markets or at least stability in the regulatory environment. Policy should focus on improvements to existing remedies for rate complaints at the STB, which would be less disruptive to the national economy than wholesale changes to the long-standing public policy regarding rail service, rates, and access.” “2013 could look similar to 2012 in terms of traffic, although we see some exciting growth opportunities developing in both the United States and Mexico in 2013,” Starling said. “In 2012, KCS had its share of challenges related to coal and agriculture. We were hit with the one-two punch of a very warm winter and low natural gas prices. Heading into 2013, we will keep a close eye on our coal continued on p. 32 December 2012 Railway age 29

2013 FReight Rail outlook

Stuck in neutral? With JAson seidL, contRibuting editoR Looking AheAd to 2013, we find the same central question facing us that we have over the past few years, and that is what the economic environment will look like. we have maintained the basic premise that the north american economy will grow modestly in 2013. there are several issues that likely will determine the direction of railroad equities in the coming year. the biggest challenge in 2013 will be the ability to maintain pricing above cost inflation. over the past eight years, the rail industry has been successful in pushing through price increases that easily exceeded rail inflation. this was in part due to legacy contracts that were being renewed at vastly higher prices, a push from investors for rails to come closer to earning their cost of capital, and a commodity boom. with most legacy contracts already renewed, commodities under pressure, and a sluggish economic backdrop, the rails are finding it harder to price their services as in the past. our most recent quarterly railroad shipper survey saw expectations for the next 6-12 months fall for the third consecutive quarterâ&#x20AC;&#x201D;to 3.5%. this marked the first time in nearly eight years of conducting the survey that such an event has happened. given that coal shippers accounted for few respondents, we believe our survey more accurately depicts the rail pricing outlook, excluding coal. unfortunately, the outlook for pricing coal movements does not seem that good. Railroad movements of thermal and met coal for export out of the east Coast of the u.S. have seen drastic reductions in pricing expectations from 25%-50% in recent months. given this backdrop, we believe it will become harder for railroads to post the type of margin gains that investors have grown accustomed to and should place further reliance on traffic growth in 2013 and beyond. traffic growth has been sluggish all year long thus far in 2012, with coal being the main culprit for the stagnation. the 2013 outlook for domestic utility coal should be remain somewhat stable given the easier year-over-year weather comparisons, more favorable stockpile numbers, and the recent rise in natural gas prices. indeed, comments from some eastern utilities indicated a willingness and ability to switch back to coal (or more to gas) if the commodity prices dictated such actions. on the flip side, coal exports have been falling sharply of late, and a strong decline in 2013 would undoubtedly place pressure on eastern rail margins.

Railway age

December 2012

in contrast to coal volumes, intermodal volumes have been a bright spot for railroads in 2012. indeed, intermodalâ&#x20AC;&#x2122;s yearly growth rate through the first week of november of 4.6% is a big reason that total carloading growth is still in the proverbial black. while a portion of this growth can be attributed by growth (albeit slow) in the broader economy, the remainder is likely due to higher fuel prices and the continued concern in the shipping community over long-term truckload capacity. although it may be difficult to forecast economic growth and the direction of fuel prices, we believe the fears over trucking capacity will continue into 2013 and could become increasingly heightened if the economy does pick up. accordingly, we continue to believe intermodal growth will outpace the overall economic growth in north america. another major issue that is likely to come up in 2013 is the role of the StB and its decisions. we expect that the StB will give the final approval for genesee & wyoming to take full control of the Railamerica properties, but that decision may come after the StB rules on one of the seven rate cases that are currently in front of it. Five of these are large, complex cases that have been ongoing for some time. if the railroads lose any of these cases it could impact the way they approach pricing future business or even lead to more rates cases, neither of which would be a positive for railroad equities. Despite the potential negatives that could emerge from some of the issues we have highlighted, we continue to view the railroads as relatively secure investments. Further to my point, railroads offer investors solid and stable dividends (with some dividend records going back more than 100 years) and have consistently supported their shares via share repurchase plans. that being said, our overall view on the equities in the industry can be described as neutral compared to the more bullish stance we had taken over the past eight years. hence, we would advise investors to be more selective in putting money to work in rail equities, as shares in the group may have difficulty outperforming the broader market.

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2013 FReight Rail outlook

franchise as some of our utilities still struggle to compete with full-year operating ratio in the mid-60s by that year. Among low natural gas prices. We will also watch our grain franchise CP’s key initiatives: annual capital spending in the range of closely next year as the nation recovers from one of the worst $1.0-$1.1 billion; reducing roughly 4,500 employee and/or droughts in recent history. Despite those challenges, in the contractor positions by 2016 through job reductions, natural U.S., we believe our auto business will continue to produce attrition, and fewer contractors; construction of new, longer strong results as consumers continue to replace an aging fleet sidings to improve asset utilization and increase train length of automobiles. Continued strength in our crude oil and frac and velocity, allowing CP to move the same or increased sand shipments should benefit our energy segment. In volumes with fewer trains, and potentially reduce crew starts addition, two new grain origins on our system should give a by 14,500, or 4%; reviewing options for the Delaware & boost to our agriculture business in the second half of 2013. Hudson in the U.S. Northeast; and turning over operations In Mexico, we expect to see continued of the 660-mile portion of growth from our automotive and the former Dakota, Minnesota & Eastern intermodal businesses.” west of Tracy, Minn., to a short line “Looking ahead, we expect weaker overWith these programs in place, CP all fundamentals in most of our markets expects in 2016 to see compound annual through the rest of the year, and into the revenue growth of 4% to 7% off the first half of 2013,” Norfolk Southern chief 2012 base, cash flow before dividends of executive Wick Moorman said at the $900 million to $1.4 billion in 2016, and company’s third-quarter earnings presena full-year operating ratio in the mid-60s. tation. “Continued competition from CP is scrapping plans to build a new natural gas and reduced demand for elecline into the Powder River Basin coal tricity will continue to impact our utility fields and anticipates taking a fourthunion Pacific, according to one wall coal volumes. And dramatic changes in the quarter 2012 estimated pre-tax non-cash Street analyst, “is well-positioned export coal market due to weaker demand charge of approximately $180 million to increase prices at a relatively for metallurgical and steam coal into ($107 million after tax) on its option, brisk pace, make continued Europe and Asia will continue to present a inherited from the DM&E acquisition, productivity improvements, and challenging environment for export to build into the PRB. generate healthy volume growth.” volume at export pricing. The outlook for “We now have a leadership team domestic intermodal remains positive with that understands the urgency of making a favorable environment for highway conversions. In particular, change and improving the culture of this organization,” the launch of new Crescent Corridor lanes starting in January Harrison said. “CP has many talented railroaders who will support higher volumes ahead. We also expect continued want to win. Together we are squarely focused on improved expansion in our international and premium market segments. service and becoming the low-cost carrier. This will allow us The outlook for our merchandise sector is mixed as project to continue to grow with our customers.” growth in crude oil, along with continued growth in the auto“CP’s energy portfolio has seen double-digit revenue motive industry, should create favorable conditions throughout growth for five consecutive quarters,” Harrison told Railway Age. “Early in 2013, we expect to hit an annualized carload the rest of the year for chemicals and automotive.” total of 70,000. Going forward, we plan to roll out our In terms of change, no railroad is facing more than crude-by-rail program to wider implementation in Canadian Pacific, now in the midst of a near-total overhaul Saskatchewan and Alberta. Expect the current shipments under recently installed chief executive Hunter Harrison. At of light, sweet crude to expand to include heavier grades. a Dec. 4 investor conference, Harrison outlined his plan for We expect continued growth in this area as marketers taking the railroad out of last place among North American and producers continue to diversify their supply chains Class I’s in terms of operating ratio, productivity, cost structure, business growth, and other performance measurements. by investing in the crude-by-rail model. “Elsewhere in our business mix, we’ve tightened “Momentum is building at Canadian Pacific, and the Vancouver-Chicago and Vancouver-Toronto intermodal organization is driving to a culture of intense focus on schedules, taking a day out of transit times. And there’s more operations,” said Harrison. “Service will be what drives this of these improved service offerings being developed. While organization, by providing a premium, reliable product the majority of our coal franchise is metallurgical coal for offering through a lower-cost operation. We have initiated export, should the softness for thermal coal in the North a rapid-change agenda and have made tremendous progress American market continue, we expect thermal coal to in my first 160 days, and we are only getting started.” continue to grow through West Coast export. Asian buyers Harrison outlined the next steps CP will take through of potash have been cutting back this year. We’re confident 2016 to continue “to improve service reliability, increase the they’ll come back, but we don’t know when.” ra railway’s efficiency, and grow the business.” He is targeting a 32

Railway age

December 2012

union PaCifiC

continued from p. 29

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December 2012 Railway age 33

2013 FReight Rail outlook

we’re alwayS dodging rain cloudS With tom simpson, Rsi executive director RAiLWAy suppLieRs are a resilient and optimistic bunch. they know that if times are tough, a better day will come. over 1,300 railroaders and suppliers attended the September 2012 RSi/Cma meeting, and i detected a sense of optimism. i’d like to explore some of the reasons why. according to the RSi american Railway Car institute Committee’s third-quarter new freight car order and deliveries report, orders remained strong at 15,151. Plastic pellet and sand drove continued orders for covered hoppers, scrap steel drove demand for gondolas, and autos drove non intermodal flat car orders. another 8,832 tank cars were ordered, bringing year-to-date orders to 29,028. Demand for crude is going to grow, and the supply of Bakken crude could last for decades. Freight car builders delivered 47,089 cars in the first three quarters of 2012, a pace that will approach 60,000 deliveries by year’s end—a number not seen since 2008. Railroad capital expenditures have continued at a record pace.aaR President and Ceo ed hamberger talks about Class i capex north of $20 million. a good portion of that accrues to the supply community. the rail industry has recently had some success in washington. in July, the President signed into law moving ahead for Progress in the 21st Century (maP21). a coalition of aaR,aSlRRa, the Coalition against Bigger trucks, and RSi defeated onerous language contained in the house of Representatives version of maP-21 that would have increased truck size and weights in a massive unprecedented scale. instead, the law requires the u.S. Dot to conduct a two-year study on the impact of trucks exceeding current federal size and weight limits on accident data; potential effects on infrastructure (costs and benefits; the percentage of trucks operating in excess of federal limits; the ability of states to recover costs); the frequency of weight or size violations and the cost of enforcement; and the impact on bridges and safety. however, don’t expect truckers to get caught flat-footed again when maP-21 needs to be reauthorized in two years. in addition, funding for the Section 130 highway Rail grade Crossing Safety Program and operation lifesaver was retained as was funding for rail transit programs. the threat of onerous anti-passenger rail language was averted. Finally, through a variety of stimulus programs, more than $11 billion has been spent on freight and high speed and intercity rail related programs since 2009. 34

Railway age

December 2012

it appears as if there is some desire in Congress to solve our nation’s financial and transportation issues. the policies of the obama white house and the u.S. Dot have been a mixed bag for suppliers. on the one hand, President obama’s investment in rail as an economic stimulus has been a plus. his ongoing support of intercity passenger rail (both amtrak and high speed) is also positive. however, obama’s stance on coal has hindered growth in that segment of our industry. a new Congress brings new challenges—new committee leadership, new members who don’t know our industry, and anti-rail forces eager to counteract our messages. Plan to be in washington for Railroad Day on Capitol hill, march 14, 2013. Being a railway supplier means always dodging rain clouds. Some projections for next year indicate that the strong freight car order trend may not continue, disrupting that sector’s planning process. Because of that, some on the mechanical side are being more cautious about plans for next year. Coal loadings are down and coal car orders are “dead,” according to my sources. Rail traffic levels are mostly “mixed” in aaR’s weekly rail traffic reports—a disheartening trend. all those new railway tank cars for crude oil service are being built to standards adopted by the aaR Committee on tank Cars. the u.S. Department of transportation has final jurisdiction over tank car safety, and there’s concern that Dot may order timeconsuming and costly retrofits in a rulemaking that might come by year’s end, throwing that segment of the industry into disarray and uncertainty at a time when tank cars and crude oil are a bright spot. Dot’s sluggishness so far to issue a final rule on a new tank car design—a rule supported by the railroads, shippers, leasing companies, and carbuilders—is puzzling. yet, optimism is still strong. Railway interchange 2013 is scheduled for Sept. 29-oct. 1 in indianapolis. Booth sales are brisk for all three trade associations involved, and you can expect that this show will be a sellout. hotel reservations open in January. act early so you that can be in one of the prime hotel properties we have under contract. For more information, visit www.railwayinterchange.org.

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Stepping up the ol’ grind Increased grinding speeds, understanding the variety of target rail profiles, and precise metal removal all factor into an effective grinding program. By Mischa wanek-liBMan, engineering editor

rofessionals juggle the miscellany of variables associated with grinding to ensure a target profile to manage and extend rail life. Rail remains one of the railroads’ most expensive assets, and employing maintenance practices to meet its useful life can save the industry millions every year.

Plasser-American

A target profile

Harsco Rail’s machines grind to a target profile based on desired wheel/rail contact that can vary by location in the track, whether it’s tangent, high rail, or low rail, as well as the degree of curvature in the rail. Profile grinding is ultimately the basis for controlling wheel/rail contact. By controlling where the wheel contacts

the rail, the wear and fatigue of a track is decreased. However, Harsco notes that companies must also take into account the wheel profile when considering the corrugation of rail. “Desired new and worn wheel profiles are used to help develop the target rail profiles. Thus, if we want to shift the contact from the gauge corner, the target profile will have gauge corner relief, and grinding to that target will help shift the wheel/rail contact,” says Palese. Equipment that achieves a smooth surface finish and has the flexibility to grind in many different circumstances including corrective profiling, mill scale removal, corrugation, noise and vibration removal, defect control, and work around track obstacles and maintain grind, is important to Dereck Bartz, product manager for Harsco Rail’s grinding December 2012 Railway age 37

Rail gRinDing Harsco Rail says its machines grind to a target profile based on desired wheel/ rail contact that can very by loation in the track, whether it’s tangent, high rail, or low rail, as well as the degree of curvature.

Extending useful life

Loram Maintenance of Way, Inc., currently has 248 examples within its template library to grind a three-inch rail, with more templates being added all the time. “Certainly, high rails, low rails, and tangent rails all deserve their own shape and the diverse wheel profiles found on various systems demand correspondingly unique matching rail shapes,” says Robert Harris, chief engineer, Rail Quality, with Loram. “To assure the rail profile left behind the grinding machine is acceptable, we have various methods of measuring and reporting the compliance to a template, ranging from sophisticated laser-based optical measurement systems linked to GPS tracking systems to manual tools and gauges used by a person on the ground.” In addition to rail profile, Harris also points to variations in wheel shape as a factor in controlling wheel/rail contact. “In the ideal case, where all of the wheels on a system are identical and all of the trucks perform flawlessly, it is easy to shape the rail so the contact point can be precisely controlled. When this is done properly, steering of the wheelsets can be optimized and stresses in the wheel and rail can be minimized, reducing damage and therefore costs. In the real world, the same strategy is attempted but the level of precision is lessened and an attempt is made to optimize for the majority of the wheels,” says Harris. As one of the most capital-heavy assets on the railroad, rail 38

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December 2012

needs to last as long as it can, which is why Harris says the overall focus of rail grinding in heavy haul operations is to extend the useful life of the rail. “This is done through the application of proper rail shapes, while removing only the steel needed to control surface damage. To accomplish this goal, Loram works with customers to establish proper grinding cycles and offers pre-inspection services to assure the work is planned exactly for each track section prior to the arrival of the grinder. For transit systems, longevity of the rail investment is also a concern, but the primary focus is shifted to factors influencing passenger comfort and environmental concerns, such as reduced noise levels generated in the wheel/rail interface,” says Harris. Preventive maintenance

Plasser American Corp. provides corrugation and preventive maintenance grinding machines that use an oscillating motion of the grinding stones longitudinally to the rail. The company says the oscillating movement of the grinding units along with the continuous motion of the machine provide for a perfect, smooth rail running surface. A water spray system ensures a dust free environment, and the Plasser grinding process is also spark free. (Illustration, p. 37.) “One of the major advantages of the Plasser grinding principle is the reduction of noise caused by train traffic on railway lines that run through residential areas. A perfect running surface reduces not only noise emissions, but also improves ride quality and reduces wear on the track and rolling stock,” says Plasser. The company recommends using an oscillating grinding machine after rotary grinding machines or rail milling machines to eliminate the “chatter” marks usually left behind,

Harsco Rail

equipment and services, because various customers have different specific concerns as it relates to grinding rail. Harsco Rail notes that grinding has moved beyond a service and is a science that demands innovation and performance, in order to develop a machine that can meet the demands of the track.

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A perfect rail surface is essential for wheel/rail interaction to function well. The Plasser GWM series of rail grinding machines treat the rail running surface in a longitudinal motion. This is the decisive factor to reduce noise at the source. Corrugation and waves are removed using this proven method of oscillating grinding stones not only reducing noise emissions, but also improving ride quality. Additionally, preventive grinding of new rail results in less wear of the track and rolling stock as well as a longer lasting track geometry.

Rail gRinDing

thus reducing the noise emissions. Plasser points to tests performed in Germany that have demonstrated that a noise emission reduction of 12 dBA is achievable using the Plasser grinding technology. An additional advantage that has been studied and demonstrated is that rails treated with a Plasser oscillating grinding machine showed an obvious increase in service life, resulting in higher cost effectiveness. “In various studies, it has also been documented that the treatment of new rails showed that corrugations occurred much later than on untreated new rail. The reason is the removal of the initial roughness, which occurs during manufacturing. Preventive grinding has proven to be extremely economical and shown surface faults to be delayed by more than 60 million gross tons,” the company says. Managing rail life

Vossloh Rail Services’ High Speed Grinding (HSG) system is focused on maintenance grinding and designed to maintain the rail profile to minimize the need for corrective grinding. “Studies have shown that when a rail starts the degradation process, it degrades exponentially. This causes the 40

Railway age

December 2012

rail to under-perform and can cause additional problems with track structure and equipment,” says Ron Martin, vice president and general manager at Vossloh Rail Services. “The HSG system, which operates at 50 mph, was developed to allow frequent maintenance cycles without causing disruption to traffic. This allows railroads to achieve and maintain the optimal profile to minimize the degradation process without the need for expensive and time-consuming corrective procedures. When corrective measures or high metal removal rates are required, Vossloh Rail Services relies on our new Rail Milling technology in areas where we are providing the complete ‘Rail Life Management’ for our customers.” Martin points out that the entire rail/wheel interface is constantly under review and its optimization is best achieved with a higher frequency of maintenance before long-term degradation of the rail profile or failures occur. “It has been stated that present maintenance frequency is falling further and further behind in maintenance cycles, due to cost and the impact to train delays. Traditional methods require extensive track time, which is very disruptive to train operations. It’s difficult, and will not get easier, to be

granted the track time required to maintain the rail to its optimum performance and achieve the longest rail life possible. The less maintenance performed, the shorter the rail life. Under most present scenarios, railroads unable to keep up their maintenance schedules will be faced with much higher rail replacement costs in the future,” says Martin. The company’s customers are concerned about all areas affecting rail life cycle, and Martin says each railroad, territory, and track section have unique requirements and demands based on a number of variables. “Because this is a process, every aspect of the maintenance and corrective actions of the rail interface need to achieve the same outcome. If one part of the process is not performed regularly, the optimal interface will be compromised and require additional costly attention. Rail maintenance practices have come a long way in the past several years, and the importance of each aspect has been researched thoroughly with the consequences well documented. Vossloh Rail Services’ goal is to offer the most cost effective systems to help roads achieve the longest rail life cycle possible,” says Martin. rA

Loram Maintenance of Way, Inc.

Loram says it has 248 examples within its template library to grind a three-inch rail, with more templates to come.

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A CAPITAL SySTEM kEEPS GRoWInG By Douglas John Bowen, Managing editor

n the April 12, 1976 cover story of Railway Age, “Day 1 on the Washington Metro,” Editor-In-Chief Luther Miller wrote: “Maybe it won’t last … But let it be recorded that on March 29, 1976, Washingtonians embraced their new Metro with affection, enthusiasm, and the indulgent understanding that an infant crawls before it walks and sometimes even falls flat on its face.” From a ceremonial launch two days earlier on March 27, 1976, Washington Metro has grown from an initial 4.6-mile, five-station operation on the nation’s bicentennial, and has never looked back. Today Metrorail spans 106 miles and serves 86 stations, with another five under construction, and extensions reaching ever deeper into the Virginia suburbs of the nation’s capital (and, less directly, improving rail connections with D.C.’s corresponding Maryland suburbs). Back then, Washington Metro also was the new subway kid in the U.S. marketplace, commencing operations roughly four years after BART began serving the San Francisco Bay Area, a time when many thought passenger rail transit was destined for oblivion. Such defeatism is long gone, but now, as then, Metro receives intense public scrutiny, operating as it does in a dual arena of local and national politics, and struggling to both operate and expand with a hodgepodge of funding sources. Farebox and related revenue cover about 57% of Metro operating expenses, higher than many U.S. public transport systems. The remainder is an ongoing problematic exercise, since Metrorail has no dedicated source of funding. Washington Metropolitan Transit Authority (WMATA) must ask several entities to contribute, with the District of Columbia, Maryland’s Montgomery and Prince George’s counties, Virginia’s Fairfax and Arlington counties, and the Virginia cities of Alexandria, Falls Church, and Fairfax contributing varying amounts each year, depending on local fiscal stresses and each entity’s own perceived interest in benefitting from—or feeling neglected by—Metrorail operations and planning. Despite such ongoing angst, Metrorail’s worth to the city and region is now generally beyond dispute, even by most strident anti-rail partisans, as it handles 594,000 riders on an average day and offers a true transport alternative to a city renowned, even by American standards, for automotive overload. 42

Railway age

December 2012

New lines, new equipment, and even new rail modes are part of an ambitious agenda for Washington Metro, no longer the new rail kid on the block.

Riders, including one with a bicycle, await the arrival of the next Metro train, now an established presence in the natiion’s capital.

ShutterStock

New gear for lines old and new

The commitment is exemplified by the $886 million order for 428 7000-Series cars, awarded to kawasaki Rail Car USA in May 2010. Approximately 300 cars will be used to replace Metro’s older 1000-Series cars, in service since Washington Metro began operations in 1976. Another 128 cars will be used for Metro’s planned 23-mile service extension to Dulles International Airport. The cars will begin arriving on the property for revenue service next year, with delivery scheduled for completion by 2016. Following prototype construction of the 7000-Series cars in kobe, Japan, kawasaki Rail Car is producing the new cars at its plants in Lincoln, neb., and yonkers, n.y. The cars will join older but still viable 5000-Series cars from CAF, built in the early 2000s, and 6000-Series cars built by Alstom, added to the roster between 2005 and 2007. The cars targeted for the Dulles Corridor can’t arrive too soon. The first 11.7 miles of the route are under construction, with Bechtel the lead contractor, and completion slated for late 2013. Phase one would extend Metro to WiehleReston East in Reston, Va. Phase 2, reaching Dulles

International Airport itself, would also reach beyond the airport to terminate on Virginia state highway 772. Less ambitious, but perhaps just as beneficial, is a renewed interest in revamping Metro’s stop at Union Station, judged by most as woefully inadequate in handling peak-period ridership from passengers heading to or from Amtrak, Maryland MARC, and VRE trains, as well as WMATA bus services serving the restored rail station above the subway.

New rail modes eyed

Though not directly overseeing implementation, Metro officials have offered significant political guidance and planning assistance to the Maryland Transit Administration in advancing the proposed Purple Line light rail transit project, spanning two Maryland counties and offering intermodal connections with Metrorail at four locations, including LRT’s termini in new Carrollton (orange Line) and Bethesda (Red Line). The 16-mile line in essence forms a circumferential route that would act as both feeder and distributor to Metro’s radial rapid transit network. Within the district, WMATA is aiding the District December 2012 Railway age 43

washington MetRo

Department of Transportation as DDoT advances a program to layer Metro rail service with eight streetcar routes totaling 37 miles. Late last month DDoT noted active construction work was planned for the Anacostia and H Street/Benning Road streetcar corridors, in the city’s northeast. H Street/Benning Road streetcars, plying a 2.2-mile route, will add to the growing rail and intermodal mix at Washington Union Station. Standing ready are three SkodaInekon streetcars; three more cars, to be built by Clackamas, ore.-based United Streetcar, LLC, are expected to arrive on the property by late 2013. DDoT officials now expect H Street/Benning to begin service in late 2013 or

early 2014, though the project’s completion has been repeatedly delayed. Construction also is commencing on the Anacostia Initial Line Segment, originally planned as the first streetcar segment. The 1.1-mile route will connect Metro’s Anacostia Station with the Joint Base Anacostia-Bolling (JBAB), via Firth Sterling Avenue and South Capitol Street. Just outside the district, a streetcar proposal for Alexandria and neighboring Arlington County has incorporated WMATA input, as two halves of one line would each join at Metro’s Pentagon City (Va.) station. Here, too, WMATA officials have assisted city and county authorities. RA

35-Ton Portable Rail Wheel Dolly Model RQ-RD3000

Railway age

December 2012

JoSePh M. cALISI

A 7000 series car emerges from Kawasaki Rail Car’s plant in Yonkers, N.Y., prior to its southboound trip to its Washington, D.C. home.

People

Meetings

HigH Profile Sasser Family Holdings inc., a fourthgeneration, family-held transportation asset services and management company with roots dating back to 1928, has named Shad Peterson as President. Fred Sasser will continue to serve as Chief executive Officer and Chairman of the Board of Directors for the organization. Peterson additionally holds the title of Chief Operating Officer, as well as chief executive of all of the company’s business units. Peterson has spent 20 years in the transportation and strategic consulting Peterson services industries, and has an educational background in Sasser economics and government. Sasser Family Holdings inc.’s business units and investments include Chicago Freight Car leasing Co., Union leasing inc., CF Rail Services llC, Chicago Freight Car leasing australia Holdings, and Nxgen Rail Services. Peterson represents the fourth generation of the Sasser family and has served within the organization since 2005, when he joined the company as President of Union leasing. Since that time, “he has been a key figure, establishing a secure foundation for the future growth and expansion of the business,” said CeO Fred Sasser.

January 9-12, 2013 NRC 35th Annual Conference & Exhibition

AMTRAK— Bruce Pohlot, who spent 21 years with amtrak in various engineering roles prior to joining Parsons Brinckerhoff, has returned to the railroad as Chief engineer. Tom Quigley appointed general Manager, State-Supported Services. Doug Varn appointed general Manager, longDistance Services, a new position. BNSF—named Steve Bobb executive Vice President and Chief Marketing Officer, overseeing sales, marketing, customer service, economic development, and business unit activities. He succeeds John lanigan, who will retire on Jan. 15, 2013. Steve Branscum named group Vice President, Coal Business group, succeeding Bobb. Katie Farmer named group Vice President, Consumer Products, succeeding Branscum. She will be responsible for the commercial activities of BNSF’s intermodal and automotive business. PATRIOT RAIL CORP.—George Avery Grimes, P.E., named executive Vice President and Chief Strategy Officer; grimes will be Patriot Rail’s liaison with Class i railroad strategic projects. TWIN CITIES & WESTERN RAILROAD—appointed David Long Vice President Marketing and Sales.

loews Miami Beach Hotel, Miami, Fla. ashley Bosch, Tel.: 202-7151247; email: abosch@nrcma.org; website: www.nrcma.org/go/ conference.

January 23-24, 2013 Midwest Association of Rail Shippers (MARS) 2013 Winter Meeting

SUPPLIERS

Oak Brook Hill Marriott Resort, Oak Brook, ill. Bill Schauer, email: wrschauer@ sbcglobal.net; website: www. railshippers.com/regional/ midwest.

Watco Compliance Service appointed Christian Meeker Performance assurance engineer, nondestructive testing and welding processes.

January 24-25, 2013 9th Annual Southwestern Rail Conference

Watco Transportation Services appointed Roger Schaalma assistant Superintendent Maintenance of way for the wisconsin & Southern Railroad.

Dallas Union Station, Dallas, Tex. Bernie Rodriguez, Tel.: 469-567-9728 email: bernie@ texasrailadvocates.org; website: www. texasrailadvocates.org.

100 YEARS AGO in

(DECEMBER 1912) ‘ANTHRACITE CONSPIRACY CASE’ The Supreme Court of the United States has dismissed the general charge of conspiracy against the Reading and other railroads involved in the anthracite trust suit, but sustained the charges of the government in minor respects by declaring the 65% contracts illegal and upholding the decision of the lower court in dissolving the Temple Iron Co. The Supreme Court holds that the allegation of a general pooling arrangement between the anthracite railroads to control and apportion the coal tonnage in the anthracite fields to the seaboard has not been proved.

February 4-5, 2013 Railway Age/Parsons International Conference on Communications-Based Train Control washington Marriott, washington, D.C. Jane Poterala, Tel.: 212-620-7209; email: jpoterala@sbpub.com; website: www.railwayage.com.

March 5-6, 2013 18th Annual AAR Research Review Pueblo Convention Center, Pueblo, Colo. Peggy Herman, Tel.: 719-584-0576; email: annual review@aar.com; website: www.regonline. com/18thReview.

December 2012 Railway age 45

Products Hi-flow pressure relief valve for tank cars from Midland Manufacturing

This book traces the history of passenger-train travel from its heyday to the formation of Amtrak, the government-subsidized railroad created as a for-profit carrier. The book chronicles the roles of Amtrak both as a business and as a public entity dependent on political support. It reviews Congressional and White House policies and strategies that contribute to neither business failure nor prosperity. It also details the revolving door of Amtrak presidents. Wilner, a 40-year experienced rail industry veteran, has drafted rail policy positions as a senior industry official, implemented them as a White House appointed federal regulator, written about them as a journalist, and critiqued them as a rail labor-union officer. “Wilner recounts the highs and lows of the Amtrak era in a way that perhaps nobody else can, offering a mix of analysis and perspective that is riveting and insightful. The book is a beacon of clarity, a journey through political minefields and economic tsunamis. He pulls no punches, telling the story of Amtrak as it deserves to be told, dissecting the issues with the spirit of an investigative journalist.”

Professor Joseph Schwieterman, author of When the Railroad Leaves Town

Softcover. 238 pages.

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Railway age

December 2012

Midland Manufacturing, a division of OPw Fluid Transfer group, ofers a new Hi-Flow Pressure Relief Valve. Model number a-22075 has received full association of american Railroads certification under aaR number PRD 122007. Backed by its 60 years of experience in designing “the safest railroad tank car valves,” Midland Manufacturing has designed its Hi-Flow Pressure Relief Valve to exceed the new higher flow requirements for Packing groups i & ii commodities transported in rail tank cars of 30,000 gallons or more. This requirement includes the two largest commodities, crude oil and ethanol. Midland’s new a-22075 valve is available in all standard mounting configurations for new car builds or retrofit applications. Midland Manufacturing is an aaR Class F facility and iSO 9001:2008 certified. Since 2005, Midland has manufactured more than 100,000 tank car pressure relief valves to these high quality standards. For more information on Midland Manufacturing, contact your local Midland representative, or contact David Clugg, Manager, international Sales and Marketing, Tel.: 847-677-0333; email: DClugg@midlandmfg. com; website: www.midlandmfg.com.

Know your speed limit The True Speed Calibration Unit (TSCU) from ekyrail enterprises, inc. is a module that is inserted between the axle speed pickup and the locomotive speed indicator ( or isolation amplifier). The TSCU uses gPS signals to generate a speed signal correction factor that automatically corrects the speed indicator signal, thus providing an exact speed indication regardless of wheel wear. One connector attaches to the existing speed pickup, while the second connector connects to the cab mounted equipment. The module incorporates a radio frequency link for diagnostic and control setup functions. Contact ekyrail enterprises, Tel.: 450-692-1376.

RA Wrk Ste 1_2V 10 2010

10/15/10

9:18 AM

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Miniature circuit breakers from ABB LV Products New Berlin, wis.-based aBB low Voltage Products Division has introduced the S200PR Ring Tongue family of high performance, current limiting miniature circuit breakers (MCBs) with ring tongue lug connections. The SU200PR range conforms to Ul 489, CSa 22.2 No. 5 and ieC/ eN 60947-2 standards. aBB says it is currently the only Ul489 MCB on the market with rated current up to and including 35a for 480y/277 VaC, and up to 63a for 240 VaC. The S200PR range Supplemental Protection conforms to Ul1077, CSa 22.2 No. 235 and ieC /eN 60947-2 standards. Both ranges are available in 1, 2, 3, and 4 pole configurations, from 0.2a through 63a, and feature integrated captive screws that simplify the secure connection of cables, prevent installers from losing the connection screws, and provide extra protection. all markings are permanent laser markings, clearly visible from the front even when mounted in position on the DiN rail. The breakers have a true Contact Position indicator (CPi) that indicates the actual contact position, ensuring the display of fault conditions such as contacts that may be “welded” closed due to excessive fault. They also comply with the latest Ul requirement for barriers of MCBs fitted with ring tongue terminals, and their structural material is a more flexible, recyclable Thermoplastic. “Our goal in developing the new Ring Tongue breakers is to address specifically our semiconductor and transportation customer requirements,” said egon Hillermann, aBB’s local product group manager for mission critical MCBs in the U.S. For more information, contact alex Miller, Tel.: 262-2363710; email: alex.x.miller@us.abb.com; website: www.abb. us/lowvoltage lvps.support@us.abb.com.

oday’s railroads need cost-effective and flexible training choices. That’s exactly what The Railway Educational Bureau provides through Work Site Training. Work • • • • • • •

site training allows you to: Maximize your training investment Reduce employee time away from the job Reduce travel costs by having the instructor come to your location Increase the skill level of your employees Improve productivity Achieve your training objectives Utilize your in-house expertise, equipment, and facilities

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Fundamentals of Freight Train Air Brakes Single Car Air Brake Component Identification and Function Daily Test, Single Car Test and Special Tests Review AAR S-486 Single Car Air Brake Test Procedures

FRA Part 232 Brake System Safety Standards for freight and other non-passenger trains • • • • • •

Review Brake System Safety Standards definitions and extent of the regulations. Class l Brake Tests – Initial Terminal Inspections Measuring Piston Travel Review piston travel decals Hands-on “Class l Brake Test” Performance Evaluation “Class l Brake Test”

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The Railway Educational Bureau December 2012 Railway age 47

Get the inside scoop on and off the track

Rail Brief: The Weekly RT&S E-mail Newsletter • Engineering and M/W News • Information on Advancing Projects • Coverage of Developing Technologies • Safety and Regulatory Updates

SubScribe at: www.rtands.com/railbrief

Ad Index Company

Phone #

Fax

Email address

Page #

amsted Rail group

312-922-4516

312-922-4597

kskibinski@amstedrail.com

Balfour Beatty

888-250-5746

904-378-7298

info@bbri.com

Bhulai engineering Corp., lTD

+91 11 29227142

+91 98 10205022

neera@bec-group.com

CiT

212-461-5713

212-461-5694

abby.cohn@cit.com

Collins engineers, inc.

312-236-5817

312-704-9320

eboehien@collinsengr.com

Danella Rental Systems, inc.

610-828-6200

610-828-2260

pbarents@danella.com

Diversified Metal Fabricators

404-879-7885

404-875-4835

pkrohnert@dmfatlanta.com

Dixie Precast

770-944-1930

770-944-9136

fbrown142@aol.com

ellwood Crankshaft & Machine

724-347-0250

724-347-0254

ecgsales@elwd.com

Flagship Rail SVCS, llC

312-559-4801

312-559-4842

kelli.kaul@flagshiprail.com

georgetown Rail equip-aurora

512-869-1542 ext 228

512-863-0405

karen@georgetownrail.com

Helm Financial Corp.

415-398-4510 ext 1610 415-398-4816

bwind@hlmx.com

Herzog Railroad Services, inc.

816-233-9002

816-233-7757

tfrancis@hrsi.com

lORaM

763-478-6014

763-478-2221

sales@loram.com

MTU

+1 248 560 8484

+1 248 560 8485

bryan.mangum@tognum.com

ORX

814-684-8484

glenn@orxrail.com

Plasser american Corp.

757-543-3526

757-494-7186

plasseramerican@plausa.com

Progress Rail Services (FCM)

256-505-6485

256-840-2651

bcox@progressrail.com

RailComm, inc.

585-377-3360

585-377-3341

sales@railcomm.com

Railquip, inc.

770-458-4157

770-458-5365

sales@railquip.com

Railworks

866-905-7245

952-469-1926

jrhansen@railworks.com

Railway educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

46,47,C3

Strato

732-317-5406

732-981-1222

korozco@stratoinc.com

Vossloh group

00 49 239 252 273

00 49 239 252 274

info@vossloh-north-america.com

VgT Rail

618-343-0600

618-343-9015

jwhite@sircrail.com

The advertisers index is an editorial feature maintained for the convenience of readers. it is not part of the advertiser contract and Railway age assumes no responsibility for the correctness.

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 345 Hudson St., 12th Floor New york, Ny 10014 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com

AL, AR, IN, KY, LA, MI, MS, OH, OK, TN, TX emily guill 20 South Clark Street, Suite 1910 Chicago, il 60603 (312) 683-5021 eguill@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, WV, CANADA – QuEbEC AND EAST, ONTARIO Mark Connolly 345 Hudson St., 12th Floor New york, Ny 10014 (212) 620-7260 Fax: (212) 633-1863 mconnolly@sbpub.com

AK, AZ, CA, CO, IA, ID, IL, KS, MN, MO, MT, NE, NM, ND, NV, OR, SD, uT, WA, WI, WY, CANADA – Ab, bC, Mb, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, il 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com

GLObAL ADVERTISEMENT SALES, EXCEPT ITALY, ITALIAN-SPEAKING SWITZERLAND, JAPAN, AND NORTH AMERICA Donna edwards advertisement Manager Suite K5 & K6 The Priory, Syresham gardens Haywards Heath, RH16 3lB United Kingdom +44-1444-416368 Fax: +44-1444-458185 de@railjournal.com.uk

AuSTRALIA, CZECH REPubLIC, HONG KONG, INDIA, KOREA, MIDDLE EAST, NETHERLANDS, NEW ZEALAND, RuSSIA, SCANDINAVIA, SOuTH AFRICA, SOuTH AMERICA, SPAIN, WORLDWIDE RECRuITMENT Steve Barnes international area Sales Manager Suite K5 & K6 The Priory, Syresham gardens Haywards Heath, RH16 3lB, UK +44-1444-416368 Fax: +44-1444-458185 sales@railjournal.co.uk ITALY, ITALIAN-SPEAKING SWITZERLAND Dr. Fabio Potesta Media Point & Communications SRl Corte lambruschini Corso Buenos aires 8 V Piano, genoa, italy 16129 +39-10-570-4948 Fax: +39-10-553-0088 info@mediapointsrl.it

JAPAN Katsuhiro ishii ace Media Service, inc. 12-6 4-Chome, Nishiiko, adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Craig wilson 345 Hudson St., 12th Floor New york, Ny 10014 (212) 620-7211 Fax: (212) 633-1325 cwilson@sbpub.com

December 2012 Railway age 49

products & services Reidler Decal Corporation St. Clair, PA 17970 Fax: 570-429-1528 marketing@reidlerdecal.com The Federal Railroad Administration's proposed new delineator configuration

Reidler can help you comply with the FRA ruling by offering prismatic reflective yellow delineators that meet their specifications. • 4" x 150 fl Rolls (kiss-cut available) • 400 candlepower retroreflection • Application instructions provided

Give us a call at 800-628-7770 for more information proFessioNAL directorY

The Leader in Railroad Markings since 1926

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EDNA A. RICE, EXECUTIVE RECRUITER, INC (713) 667-0406 FAX (713) 667-1651 Web address: www.ednarice.com Email: resume@ednarice.com

Kansas City (913) 661-2424

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We offer: - Certified Locomotive Engineers - Certified Conductors - Train Dispatchers - Yardmasters - Brakemen/Switchmen - Mechanical For Your Temporary Needs!

EDNA A. RICE, President 6750 West Loop South Suite 735 Bellaire, Texas 77401-4111

trAiNiNG

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

Trainers and Training Developers

Railway Age Digital Edition For More Marketing Power contact cwilson@sbpub.com

Railway age

December 2012

The Railway Educational Bureau is in the process of creating a training and development database to be used as a resource for the railroad industry. If you have experience training in an instructor-led environment and/or developing training materials for the rail industry, and are interested in becoming a part of our group, please send your resume to:

Brian Brundige The Railway Educational Bureau 1809 Capitol Avenue Omaha, NE 68102

equipment Sale/leaSing

Available For Lease

◆ 5,150 cu. ft. Pressure Differential (PD) Covered Hopper Cars. Food gradeinterior linings but don’t necessarily have to stay in food grade service. ◆ Mill Gondolas - 4’ 6” to 5’ interior side height. Cubic capacity ranges from 2,244 to 2,494 cu. ft. ◆ 4,200 cu. ft. Gondolas - Interior bracing removed & tub bottoms reinforced for C&D, coke, scrap, aggregates, etc. ◆ 3,600 cu. ft. Open Top Hoppers. 45 degree slopes for aggregate, coke, coal,etc.

For additional information and pricing, please contact John Goodwin phone (605) 582-8318 fax (605) 582-8304 www.carmathinc.com e-mail jgoodwin@mwrail.com

employment

Sales Account Executive – East Coast Progress Rail Services Corporation, a Caterpillar Company and a leading provider of signaling products and services to the Railroad industry in the United States...with operations in Asia, Africa, Canada, Mexico, South America and other global locations, seeks a Sales Account Executive – East Coast (based in Kansas City, MO) for our Rail Welding Products & Services division. Will be responsible for developing and maintaining customer accounts primarily in the Eastern Region of the United States, including Class 1, Shortline Railroads and Railroad Contractors. Minimum of five years’ experience in related sales/marketing...prefer sales experience in the rail-related industry...such as railroads, railroad contractors, and/or Transit Rail Systems. Bachelor’s degree in a related field of study preferred. Travel a minimum of 50%. Ability to effectively work independently/ self-motivated. Excellent communication skills. Equal Opportunity Employer – M/F/D/V Apply online at www.progressrail.com

Signal Engineers and CAD Operators Isis Consultants is seeking experienced senior or junior railroad signal engineers and CAD operators for its Louisville, KY office and nationwide. Isis offers competitive pay with health, dental, vision and life insurances and a 401K program. Send resume to: lburkhardt@isis-llc.com

employment

Sales Specialist

Progress Rail Services Corporation, a Caterpillar Company and a leading provider of products and services to the Railroad industry in the US, Canada, Mexico, South America, Europe, and the United Kingdom has immediate opening for a Sales Specialist for inside sales of rail and track material. This is an entry level position which requires a college degree from an accredited college/university in Marketing or Business Related field. Progress Rail Services Corporation maintains its headquarters in Albertville, AL. This position is located in PEARLAND, TEXAS area...between Houston and Galveston.... and will initially be responsible for inside sales. Position will be in training for an outside sales position for a period of 1-2 years then will be required to relocate to a designated sales area in the U.S. Equal Opportunity Employer – M/F/D/V Apply online at www.progressrail.com

Sales Account Executive – West Coast Progress Rail Services Corporation, a Caterpillar Company and a leading provider of signaling products and services to the Railroad industry in the United States...with operations in Asia, Africa, Canada, Mexico, South America and other global locations, seeks a Sales Account Executive - West Coast (Can be based in California - Washington - Oregon areas) for our Rail Welding Products & Services division. Will be responsible for developing and maintaining customer accounts primarily in the Western Region of the United States, including Short-Line Railroads, Rail Transit agencies, State DOTs, and Contractors. Minimum of three years’ experience in related sales/marketing...prefer sales experience in the rail-related industry...such as railroads, railroad contractors, and/or Transit Rail Systems. Bachelor’s degree in a related field of study. Travel a minimum of 50%. Ability to effectively work independently/ self-motivated. Excellent communication skills. Equal Opportunity Employer – M/F/D/V Apply online at www.progressrail.com

December 2012 Railway age 51

Financial Edge anthony KRuglinsKi

Thoughts from a well-positioned operating lessor

his month, we turn to an old friend in the operating leasing fraternity to see what we could learn: Harry Zander, Senior Vice President, Sales and Marketing, Macquarie Rail. Since 2006, Macquarie has built a 10,000-car portfolio of general freight cars, including boxcars, covered hoppers, ore gons and coal gons, and open-top hoppers. While much of that has been organic growth, last year the company closed on an acquisition of more than 4,500 cars as part of a lender sale that capped off a notable year of growth. Kruglinski: What’s your view on the marketplace you are serving? How about starting with the coal industry? Zander: In late 2011, the North American coal fleet returned to equilibrium after over two years of oversupply and lack of investment. Many saw this as a welcome return to health in this market, forecasting more stable lease rents in 2012 and beyond with support for new investment. Early in 2012 it was apparent that the confluence of extremely warm weather combined with historically high gas production and low sale prices led to a dramatic turn of events in the first and second quarter of this year for coal demand. Delivered volumes in the first quarter for many of our customers were high while demand for coal was notably lower. The net result has been a significant number of lease turnbacks across the industry this year and an unhealthy number of trainsets in storage. When the market was in an extended trough, many companies shortened terms in the hopes of meeting a better environment at expiration. What this did was condense the overall market expiration profile, which has created an extremely competitive landscape.

Railway age

December 2012

Kruglinski: What about all the carbuilding to support the oil and gas fracking market? Is Macquarie participating in this market? Zander: While we don’t currently participate in the tank car market, we have watched the phenomenal growth of manufacturing activity in this segment. On the drilling side, we have participated in the small-cube covered hopper market for hydraulic fracking sand. The new car market for this segment took off in the first quarter of 2011 and has now tapered off, with some settling expected over the coming quarters as volumes of sand have dropped with reduced drilling for dry gas. This market, which was previously a smaller subset of the covered hopper

“One interesting, easily overlooked market at the moment is the centerbeam flat car market.” market, has grown by almost 50% since the end of 2010, but the future demand for sand and cement should keep these cars busy for many years to come. These complementary markets can provide additional comfort to an operating lessor in this car type. Kruglinski: What markets and car types are you avoiding, or are optimistic about, and why? Zander: We don’t currently participate in tank cars. The main reason is

that it requires a different set of skills from an operations, sales, and risk management standpoint. To date, we have been comfortable in the general freight markets. One interesting and easily overlooked market at the moment is the centerbeam flat car market. We acquired several as part of the portfolio acquisition last year and think there could be a very interesting story in the coming years as housing starts and lumber shipments return to some semblance of long run production and consumption. Another facet of centerbeams is the per-diem lease structure, with which we are very familiar and comfortable. We have used per-diem leases with a wide range of car types and have found this has the ability to strike a nice balance to allow for a structured pay-per-use type of arrangement that can be a great solution for our end customers. Kruglinski: Macquarie Rail is a part of Australia-based Macquarie Group. Is there an international aspect to your work? Do your international rail investments impact your activities in North America? Zander: Being part of a global organization introduces us to opportunities in some interesting geographies. To date, all of our rail-related investment has been in North America, the largest and most diverse market. We expect our focus to remain here, but are always interested in evaluating other segments. At 10,000 cars, Macquarie is now large enoygh to make an industry statement with its fleet and leasing strategies. Dave Edwards, who led Macquarie from its origination to today, has announced his retirement effective Dec. 31. We’re sure there will be more to come from this well-positioned operating lessor in 2013.

Do you have the most up-to-date FRA Regulations?

Reb Says...

Use this handy index to verify that you have the most up-to-date version of the FRA regulations. The left-hand column lists the FRA Part number and the right-hand column list the latest revision date. Items highlighted in red denotes recent changes. (IFR = Interim Final Rule) FRA Part #

Last Update Effective:

FRA Part #

Last Update Effective:

FRA Part #

Last Update Effective:

40 . . . . . . . . .10-3-12 209 . . . . . . . .6-25-12 210 . . . . . . . .8-14-89 211 . . . . . . . .7-20-09 213 A-F . . . . .6-25-12 213 G . . . . . .9-13-10 214 . . . . . . . .6-25-12 215 . . . . . . . .6-25-12 216 . . . . . . . .6-25-12 217 . . . . . . . .6-25-12 218 . . . . . . . .6-25-12

219 220 221 222 223 224 225 228 229 230 231

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12

232 233 234 235 236 237 238 239 240 242

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .7-13-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12

Mechanical Department Regulations

The following is a list of booklets reprinted from the Department of Transportation Code of Federal Regulations 49 CFR Parts 200 to 399 that apply to the rail industry. They are printed in a convenient format and are kept current with updates from the Federal Register which may be supplied in supplement form. Item FRA 50 or Code Part # more Each

209 211 BKTSSAF 213 BKTSSG 213 BKWRK 214 BKFSS 215 BKROR 217 218 BKRRC 220 BKEND 221 BKSEP

Railroad Safety Enforcement Procedures & Rules of Practice Track Safety Standards (Subpart A-F) Track Safety Standards (Subpart G) Railroad Workplace Safety Railroad Freight Car Safety Standards Railroad Operating Rules and Practices Railroad Communications Rear End Marking Device, Passenger, Commuter & Freight Trains BKHORN 222 Use of Locomotive Horns BKRFRS 224 Reflectorization of Rail Freight Rolling Stock BKHS 228 Hours of Service BKLSS 229 Locomotive Safety Standards BKSLI 230 Steam Locomotive Inspection BKSAS 231 Railroad Safety Appliance Standards BKBRIDGE 237 Bridge Safety Standards BKLER 240 Qualification and Certification of Locomotive BKCONDC 242 Conductor Certification BKBSS

232

Brake System Safety Standards

26.40

8.95 8.55 8.55 6.25 8.55

8.25 7.85 7.85 5.85 7.35

4.15 3.50

3.80 2.75

12.25

10.95

5.25 9.40 10.00 19.95 8.35 5.25 11.75

4.75

10.00 Each

13.75

9.00 7.85 4.75 11.00

12.50

Technical Manual for Signal and Train Control Rules. Includes Part 233, 234, 235, 236 - Spiral Bound Order 25 or more and pay only $39.10 each

BKPSS

Passenger Safety Standards 20.80 Part 238, 239 - Order 25 or more and pay only $18.95 each

46.00

BKSTC

Signal and Train Control Systems Includes Part 233, 234, 235, 236 Order 25 or more and pay only $16.00 each

BKMPIE

Motive Power & Equipment Inspection Under Revision Defect codes for 215, 218, 223, 229, 231, 232 Coming Soon!

BKCAD

Drug and Alcohol Regulations in the Workplace Part 40 & 219

Fax: (402)346-1783 • Email: orders@transalert.com

BKMFR

Mech. Dept. Regs. Order 25 or more and pay only $24.50 each

$26.95

Part 240–Qualification and Certification of Locomotive Engineers

This book affects locomotive engineers, trainers and supervisors. The rule is largely based on recommendations made by an advisory committee comprised of rail industry and labor representatives. This final rule will clarify the decertification process; clarify when certified locomotive engineers are required to operate service vehicles; and address the concern that some designated supervisors of locomotive engineers are insufficiently qualified to properly supervise, train, or test locomotive engineers. 162 pages. Spiral bound.

BKLER

Qual. and Certif. of Loco. Engineers Order 50 or more and pay only $11.00 each

$11.75

9.00

BKTM

1809 Capitol Ave, Omaha, NE 68102

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 229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

25 or more Each

The Railway Educational Bureau

There are no new proposals or final rules to report for this issue. Be sure to check back next month to see if there are any changes to FRA regulations.

Part 242: Conductor Certification

The Conductor Certification rule (49 CFR 242) outlines details for implementing a Conductor Certification Program. The FRA implemented this rule in an effort to ensure that only those persons who meet minimum Federal safety standards serve as conductors, to reduce the rate and number of accidents and incidents, and to improve railroad safety. Softcover. Spiral bound. 124 pages.

BKCONDC

17.50

35.00

Order Now!

Conductor Certification Order 50 or more and pay only $9.00 each

800-228-9670 8 a.m. to 5 p.m. C.S.T., Monday/Friday

www.transalert.com

Add Shipping & Handling if your merchandise subtotal is: UP TO $10.00 10.01 - 25.00

$10.00

Add $4.10 Add 7.20

25.01 - 50.00 50.01 - 75.00

Add 9.80 Add 10.90

Orders over $75, call for shipping

*Prices subject to change. Revision dates subject to change in accordance with laws published by the FRA. 12/12

Is this a technologically advanced, meticulously engineered circular marvel capable of transporting beings and cargo millions of miles? Or is it a flying saucer?