December 2016 Railway Age by Railway Age

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Transit Focus: Pittsburgh

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On the Cover CN in the spectacular Canadian Rockies. Photo: Lloyd Sutton CN Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 217, No. 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 of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, PO Box 3135, Northbrook, IL 60062-2620, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital). December 2016 Railway Age 1

From the Editor William C. Vantuono

Elaine Chao: Shades of the “Doledrums” or a good choice?

resident-elect Donald Trump has named Elaine Chao as his choice for U.S. Transportation Secretary. Chao does have fairly solid transportation credentials, at least from a political standpoint. She’s a former Deputy Transportation Secretary. Interestingly, she has been married to Senate Majority Leader Mitch McConnell (R-Ky.) since 1993. Sound familiar? Remember Elizabeth Dole, Reagan Administration Transportation Secretary from 1983 to 1987? Her husband is former Sen. Bob Dole, Majority Leader from 1985-1987. At DOT, Chao would have a principal role in helping Trump get an infrastructure spending bill passed through Congress and start governmentbacked projects, “a role likely to be complicated by her relationship with McConnell, who will also be a critical player in any infrastructure bill negotiations,” according to a CNN report. Let’s take a look at Chao’s career in government. She served as Secretary of Labor under President George W. Bush from 2001 through 2009, the longest tenure in the position since World War II and the only Bush Cabinet member to serve all eight years of his Presidency. She was also the first Asian-American woman to serve in a Cabinet position. According to The New York Times, “While enjoying the praise and admiration of her colleagues, she also invited scorn from organized labor, whose leaders accused her of being too cozy with business interests.” Chao also served as Deputy Secretary of Transportation under President George H.W. Bush from 1989 to 1991. In 1986, she became Deputy Administrator of the Maritime Administration. From 1988 to 1989, she served as chairwoman of the Federal Maritime Commission. After she left the Bush Administration in 2009, Chao “remained quietly active in politics,” said The Times. “She has always been a close and, by many accounts, savvy adviser to her husband, immersing herself 2

Railway Age

December 2016

in even the most minute details of his campaigns, like who had donated and who had not.” Chao is a Distinguished Fellow at the ultra-conservative Heritage Foundation, whose retired economist Ron Utt is a member of Trump’s transition team, advising him on transportation. Railway Age Contributing Editor Frank N. Wilner describes Utt as a person “among whose favorite piñatas was Amtrak public subsidies” (see Watching Washington, p. 18). Chao was born in Taiwan, and moved to the U.S. as a child with her family. She is the eldest of six daughters. Her parents are Ruth Mulan Chu Chao, a historian, and Dr. James S.C. Chao, who began his career as a merchant mariner and later founded Foremost Shipping, a successful shipping company in New York. Here’s an interesting factoid: In January 2015, Chao resigned from the board of Bloomberg Philanthropies, which she had joined in 2015, reportedly because of its plans to significantly increase support for the Sierra Club’s “Beyond Coal” initiative, a campaign to promote renewable energy. Beyond Coal has received at least $80 million from Bloomberg Philanthropies. According to the Capitol Hill newsletter Politico, early in the George W. Bush Administration, an energy task force convened by (Vice) President Dick Cheney advocated the construction of 200 new U.S. coal plants. Beyond Coal prevented 170 of the 200 plants from being built. So, it follows that at DOT, Chao could carry out Trump’s purported desire to reverse (among other Obama initiatives) restrictions on coal-fired electricity generation plants. Put another way, from the railroads’ perspective: “Elaine likes coal. We like coal. The Sierra Club dislikes coal. Elaine dislikes the Sierra Club. Therefore we like Elaine.”

RailwayAge Editorial and Executive Offices Simmons-Boardman Publishing Corp. 55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com BEN VIENT, Managing Editor bvient@sbpub.com Contributing Editors: Roy H. Blanchard, Alfred E. Fazio, Bruce E. Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Creative Director: Wendy Williams Art Director: Nicole Cassano Graphic Designer: Aleza Leinwand Corporate Production Director: Mary Conyers Digital Ad Operations Associate: Shannell Beckles Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney Western Offices 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Kyra Senese ksenese@sbpub.com International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, db@railjournal.com Keith Barrow, kb@railjournal.com Kevin Smith, ks@railjournal.com Customer Service: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 curt.ciesinski@parsintl.com Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, Railway Age,PO Box 3135, Northbrook, IL 60062-2620, or call toll free (800) 895-4389, or (402) 346-4740. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of SimmonsBoardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:

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Industry Indicators SHORT LINE AND REGIONAL TRAFFIC INDEX

TRAFFIC ORIGINATED

CARLOADS FOUR WEEKS ENDING OCTOBER 29, 2016 MAJOR U.S. RAILROADS by Commodity Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron and Steel Scrap Motor Vehicles and Parts Crushed Stone, Sand, and Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads Total U.S. CarLoadS

OCT ’16 105,834 5,523 37,382 25,997 115,649 40,724 361,561 4,316 12,463 20,709 19,785 15,346 30,629 11,705 74,512 96,068 16,972 31,582 14,986 25,251 1,066,994

OCT ’15 99,820 5,804 38,092 26,104 119,309 53,573 391,182 5,696 13,211 22,809 23,282 16,039 34,038 12,850 74,111 98,487 19,706 32,328 13,637 24,716 1,124,794

% CHANGE 6.0% -4.8% -1.9% -0.4% -3.1% -24.0% -7.6% -24.2% -5.7% -9.2% -15.0% -4.3% -10.0% -8.9% 0.5% -2.5% -13.9% -2.3% 9.9% 2.2% -5.1%

322,716

300,974

7.2%

1,389,710

1,425,768

-2.5%

CARLOADS

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

COMBINED U.S./CANADA RR

INTERMODAL FOUR WEEKS ENDING OCTOBER 29, 2016 MAJOR U.S. RAILROADS by Commodity TRAILERS CONTAINERS TOTAL UNITS

OCT ’16 93,646 982,174 1,075,820

OCT ’15 112,857 976,059 1,088,916

% CHANGE -17.0% 0.6% -1.2%

3,883 238,642 242,525

5,283 240,584 245,867

-26.5% -0.8% -1.4%

97,529 1,220,816 1,318,345

118,140 1,216,643 1,334,783

-17.4% 0.3% -1.2%

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

Source: Monthly Railroad Traffic, Association of American Railroads

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted) All Commodities Average Weekly U.S. Rail Carloads: 340,000

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

2014

300,000 2015

280,000 2016

240,000

Jan Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

Data are average weekly originations for each month, are not seasonally adjusted, do not include intermodal, and do not include the U.S. operations of CN and CP. Source: AAR

Professional and Administrative 13,287 (-7.29%)

Total employees: 151,900 % change from OCT. 2015: -8.28% Maintenance of Equipment and Stores 28,172 (-8.30%)

Maintenanceof-Way and Structures 35,632 (-6.04%)

Source: Surface Transportation Board

260,000

220,000

Transportation (train and engine) 59,764 (-9.81%)

Executives, Officials, and Staff Assistants 9,090 (-5.96%)

Transportation (other than train & engine) 5,955 (-11.13%)

2006 (peak year)

320,000

% CHANGE 4.8% -9.6% -11.1% -3.5% 11.8% 5.2% -0.9% 14.9% 4.2% 11.2% -53.2% 9.0% -13.3% 8.8% 10.6% 2.6% -1.9%

OCT. 2016 - 360,212

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED OCT ’15 43,850 23,512 29,560 11,412 27,193 6,212 9,010 2,471 15,706 7,991 2,790 1,957 18,326 13,120 46,314 9,557 88,825

TOTAL CARLOADS, OCTOBER 2016 vs. 2015

CANADIAN RAILROADS ALL Commodities

ORIGINATED OCT ’16 45,946 21,252 26,282 11,012 30,413 6,535 8,927 2,839 16,368 8,883 1,307 2,134 15,889 14,277 51,220 9,806 87,122

BY Commodity

Railway Age

December 2016

class I employment dropS ON YEAR, BUT STEADIES ON MONTH Figures released by the STB show Class I total railroad employment dropped 8.28% in October 2016, measured against October 2015. But total railroad employment stayed nearly even compared to September 2016, declining only .38%. On the yearly comparison, Transportation (other than train and engine) dropped the most at 11.13%; followed by Transportation (train & engine), which dropped 9.81%; followed by Maintenance of Equipment and Stores, which dropped 8.30%.

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Industry Outlook Holding Trump to his promises Will president-elect donald j.trump follow through on his promise to invest in the nation’s infrastructure? Various railway industry stakeholders have weighed in. House T&I Committee Chairman Bill Shuster (R-Pa.): “Throughout the general election, one of the few issues that provided common ground was the need for investments in America’s transportation network and infrastructure. With the results of the historic election now coming into focus, we have a unique opportunity to begin this work immediately by embracing innovative ideas and approaches to improving our infrastructure. “In the coming months, for example, Congress must pass an FAA reauthorization bill that modernizes our aging air traffic control system and significantly improves the efficiency of our aviation system. I look forward to working with President-elect Donald Trump and my Senate and House colleagues to develop a transportation agenda that will benefit all Americans and ensure that our infrastructure is second to none.” Edward R. Hamberger, President and CEO of the Association of American Railroads (AAR): “A highly contested election season is behind us and leaders in Washington, D.C. will now shift their focus to policymaking. American industry, including the freight rail sector, is eager to work with a new administration and Congress, helping advance policies that will spur economic growth, support quality jobs and further cement the United States as a global leader. “Congratulations to Donald Trump and his entire campaign team. As a business leader, Mr. Trump understands many of the economic challenges facing this country. As such, we hope he will move quickly on issues such as comprehensive tax reform that reduces the corporate rate, a review and reform of the broken regulatory system and an embracement of fair and open trade. “These policies, as well as the steady 6

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December 2016

presence of America’s privately owned freight rail network, are critical to enacting much of Mr. Trump’s agenda, including much-needed investment in public infrastructure. “Leaders of both parties in Congress, particularly the Senate Commerce Committee, have long recognized the value and impact of our private freight rail network. “We look forward to continued dialogue on our most important issues—including stopping unfounded regulatory efforts at the U.S. Surface Transportation Board—and are eager to begin a new legislative session.” House T&I Chair Bill Shuster (R-Pa.)

President-elect Trump spoke of the need for increased infrastructure investment. American Short Line and Regional Railroad Association (ASLRRA) President Linda Bauer Darr: “ASLRRA looks forward to meeting with President-elect Trump’s transition team, ensuring that our issues are well understood and represented in the going-forward plans. Our Congress has significant work ahead of it. We will work with Congress to take up the issues of critical importance to our members, from balanced regulation to two stated priorities of the incoming Administration and Congress: infrastructure and tax reform. “By making the 45G railroad rehabilitation tax credit permanent, we will promote jobs and invest in a strong and sustainable rail infrastructure reaching rural communities and small town America”. American Public Transportation Association (APTA) Chair Doran

Barnes and Acting President and CEO Richard A. White: “On behalf of the more than 1,500 members of the American Public Transportation Association and the public transit riders who take 10.6 billion trips a year, we congratulate President-elect Donald Trump and Vice President-elect Mike Pence. “President-elect Trump spoke of the need for increased infrastructure investment during his campaign, and APTA is grateful to have had the opportunity to share its perspective and expertise with the transition team in recent months. APTA members stand ready to build on this work with President-elect Trump and Vice Presidentelect Pence on revitalizing our economy and creating jobs through greater federal investment in infrastructure. “Public transportation is critical to a community’s economic prosperity and competitiveness. As nearly 60% of the trips taken on public transportation are for work commutes, we believe that a significant portion of his infrastructure proposal should be dedicated to public transportation. “The U.S. public transportation industry looks forward to working with President-elect Trump and Vice President-elect Pence in moving our country forward with public transportation infrastructure investment.”

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W W W. N R E . C O M

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For San Diego, 45 more Siemens S70s The San Diego Metropolitan Transit System (MTS) has awarded Siemens a contract for 45 new S70 light rail vehicles, bringing the total number of Siemens LRVs supplied to MTS since 1981 to 244. MTS is Siemens’ largest U.S. LRV customer. The new S70s will allow service enhancements on existing rail lines and provide the necessary LRVs to operate the 11-mile extension of the University of California at San Diego Blue Line, now under construction.

North America The first of 41 Metra F40PH locomotives rebuilt under a $91 million remanufacturing contract has returned to service, now designated as F40PH-3s. Metra awarded Progress Rail Services Corp. the contract in 2015. Cuban Union Railways (UFC) finalized the specifications for a new fleet of diesel-hydraulic locomotives from Lyudinovo Locomotive Works (LTZ), Russia, together with other suppliers within the Sinara group. Hitachi Rail presented the first vehicle for the new metro for MiamiDade County, with Miami Mayor Carlos Gimenez and the Japanese Consul General Ken Okaniwa in attendance. The first of 18 three-car Metropolis trains for Guadalajara metro Line 3 has left Alstom’s Santa Perpetua de 8

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December 2016

Mogoda plant near Barcelona for the nearby port of Tarragona on the first stage of its journey to Mexico. Siemens has been chosen by The Metropolitan Council to manufacture 27 new light rail vehicles that will operate on the Twin Cities’ Metro Transit Southwest line expansion. Metrolinx confirmed its notice of intent to terminate its $770 million contract for up to 182 Bombardier LRVs for Toronto Transit Commission. Patriot Rail Services Company LLC announced a rail infrastructure investment in its California-based subsidiary Sacramento Valley Railroad (SAV), the railroad that serves tenants of McClellan Business Park. The director of Cuba’s foreign trade agency Tradex, José Antonio Arias, signed a contract with Andrei Solovey, CEO of Transmashholding subsidiary Tver Carriage Works (TVZ), for 68 passenger coaches.

Worldwide: The first two CRRC (China Rail Rolling Stock Corp.) diesel locomotives for Argentina’s meter-gauge Belgrano Cargas network were loaded onto a ship at Lujong port in Shanghai for the start of their sea voyage to Buenos Aires. Il-de-France Transport Authority (Stif) has awarded Alstom a contract to supply 22 Citadis X05 LRVs for light rail Line T9. German Rail (DB) subsidiary S-Bahn Hamburg exercised an option for 12 additional Bombardier class 490 EMUs to increase capacity on lines S3 and S11. Uruguayan State Railways (AFE) has acquired seven Y1 single-car DMUs from Swedish rolling stock leasing company NetRail to improve services on the Montevideo - 25 de Agosto line.

Update Supply Briefs Amsted-Faiveley acquisition deal completed Amsted Rail has entered into an agreement to acquire 100% ownership of the Amsted Rail-Faiveley brake component business for freight cars. The acquisition by Amsted Rail will include brake components such as hand brakes, slack adjusters, empty load devices and ABU cylinders produced by Ellcon-National, which Faively Transport acquired in 2008.. In addition, Amsted Rail will continue to offer the plastic pellet gate product line. Amsted Rail plans to continue producing brake components in a new location in the Greenville, S.C. area.

GREX grabs R&D award Georgetown Rail Equipment Company (GREX) has been named an R&D 100 Awards winner for its Aurora Xi internal tie inspection technology, and was the only winner from the rail industry. The R&D 100 Awards recognize excellence in research, design and innovation. An independent panel of roughly 50 judges selects the finalists each year. This year’s winners represented such industries as aerospace, consumer products, automobiles and health sciences. Aurora Xi is an X-ray backscatter system that scans wood railroad ties to detect problems below the surface. The technology allows railroad owners to determine where maintenance is necessary and prioritize the allocation of resources based on data collected by the Aurora Xi system. “GREX is incredibly honored to accept an R&D 100 Award for Aurora Xi,” said Greg Grissom, Chief Operating Officer at GREX. “We remain focused on applying brandnew technology to solve the rail industry’s toughest problems.” 10

Railway Age

December 2016

AAR to STB on forced access: “Terminate this proceeding”

n comments filed with the Surface Transportation Board regarding Reciprocal Switching, STB Ex Parte No. 711 (Sub-No. 1), the Association of American Railroads said the proposed rules are “unlawful” and “contrary to established law dating back well before the Staggers Act.” “The proposed reciprocal switching rules ignore the statutory language that itself requires a showing of necessity for a switching order,” AAR said in its summary. “They give no weight to provisions of the Rail Transportation Policy (RTP) directing the agency to allow market forces to govern railroad commercial activity to the maximum extent possible and to minimize regulatory intervention into the market. “In contrast to the existing competitive harm standard of the Board’s Competitive Access Rules, the proposed switching rules would allow a shipper to obtain a forced switching order without any showing of need to remedy a harm. They are a ‘no fault’ recipe for regulatory intervention that turns the existing access regime upside down. “The omission of the requirement that a shipper show need to obtain an order of forced switching is particularly puzzling in light of the Board’s unambiguous statement in the Decision that a

shipper seeking a switching order ‘would be required . . . to bear the burden of showing that reciprocal switching is needed. There would be no presumption of need.’ “The Board in its Decision also acknowledges that granting access ‘on demand’ is impermissible under the governing statute, but the proposed rules contain no mechanism for preventing this admittedly unlawful result. As written, the rules would allow access on demand, particularly under the second prong where a sole-served shipper would only have to show that it is located near a working interchange and served by a market dominant railroad to justify a switching order. “The rules would undermine demandbased pricing, entail a significant increase in regulatory control, and threaten rail carriers’ revenue adequacy by substituting artificial competition for marketplace decisions involving the routing of traffic and the setting of rates. It is not lawful for the Board to launch a program of increased regulatory activity without first assessing whether the program can be reconciled with the deregulatory policies set out in the RTP. “The proposed rules are invalid. The Board should withdraw them and terminate this proceeding.”

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Update Indiana Rail Road, Cummins roll out QSK95 locomotive

After two years of development and testing, Indiana Rail Road (INRD) SD90-43MAC no. 1919, the first heavyhaul freight locomotive equipped with a Cummins 16-cylinder, 4,400-hp, Tier 4-compliant QSK95 high-speed diesel power plant, is operating as a “mobile laboratory,” according to INRD Senior Vice President Operations and Business Development Bob Babcock. 1919 is a joint venture of INRD, Cummins, TMV, which supplied the microprocessor control system, and Brookville Equipment, which handled the engine installation and performed system integration. At 4,400 hp (3,281 kW), the QSK95 “achieves the highest output of any 16-cylinder high-speed (1,800 rpm) diesel,” Cummins said. “Combining our

STORAGE

Railway Age

latest-generation Modular Common Rail Fuel System (MCRS) with quadturbocharging, the QSK95 delivers reduced noise, excellent response and ultra-low-emissions capability.” INRD’s repowered SD90-43MAC is a prototype six-axle, heavy-haul Tier 4 freight locomotive. The 95-litre QSK95, developed as part of Cummins’ $1.35 billion “Hedgehog” engine program, is modular in design, the 16-cylinder version of a line that also includes V-12 and V-20 versions starting at 3,200 hp. Bore and stroke are 190 mm X 210 mm. Dry weight is 15.17 tons. The engine is rated at up to 12,838 foot-pounds of torque. Turbochargers are HE900s. EPA Tier 4 compliance is achieved through in-cylinder combustion technology and

GREATER PHILADELPHIA REGION METRO NEW YORK REGION SHORT TERM AND LONG TERM COMPETITIVE RATES LOADED, EMPTY & RESIDUE NONHAZARDOUS & HAZARDOUS

December 2016

urea-based SCR (Selective Catalytic Reduction). The urea is known as DEF (diesel exhaust fluid). It’s injected directly into the exhaust stream, catalyzing a chemical reaction whose end products are nitrogen and oxygen, normal atmospheric elements. Compared to modern medium-speed (900 rpm) diesels, the QSK95 is more than 30% lighter, offers 42% lower heat rejection, 44% lower oil consumption, and up to 7% lower fuel consumption. Compared to older Tier 0 engines, NOx emissions are 89% lower, HC (hydrocarbons) are 97% lower, PM (particulate matter) is 98% lower, and fuel consumption is 16% lower. “We are running 1919 through its paces,” Babcock explained. “We’re operating it with 17,000-ton coal trains, intermodal trains, and in yard switching service. It’s got lots of power and is very versatile.” He noted the “ease of working with the Cummins technical staff.” The QSK95 is also the power plant for the Siemens Charger higher-speed, 125-mph diesel-electric locomotives that are being built for a five-state HrSR (higher-speed rail) initiative encompassing the departments of transportation of Illinois, California, Michigan, Missouri and Washington. Charger locomotives will also power the trainsets for All Aboard Florida’s soon-to-debut Brightline passenger service. Maryland’s MARC recently ordered eight Chargers.

For The Record In Railway Age’s 2017 Railroad Financial Desk Book Directory (RA, October 2016, pp. 39 and 40), the listing for The David J. Joseph Company in the Arrangers and Lessors categories appeared incorrectly. Following is the corrected listing.

THE DAVID J. JOSEPH COMPANY

300 Pike Street, Cincinnati, Ohio 45202; Tel.: 513-419-6200; Fax: 513-419-6221; Trey W. Savage, VP Rail Group; Ryan Eckert, General Manager-Rail Equipment Group; Keith Kelsey, Jeff Schmutte, Jeff Blake and Eric Hausfeld, Regional Sales Managers; Dan Dorsey, General Manager-Private Fleet; Tom F. Pellington, Sr. Director

Rail Equipment Services; Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502-2127365). The David J. Joseph Company’s Rail Group provides a broad range of transportation services throughout North America: single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchases and sales of portfolios, and private fleet management. Other services include freight car inspections and engineering services from design of new cars to complete ISL extended life, modifications and analysis; in addition to railcar dismantling for scrapping and parts reclamation.

DART expands to Camp Wisdom and UNT Dallas The Dallas Area Rapid Transit Blue Line added three miles and opened new stations at Camp Wisdom and UNT Dallas. DART opened the first section of the Blue Line’s southern corridor in 1996. A three-mile extension was added in 1997. Nearly 20 years later, the extension project completes both the alignment and the entire rail network outlined in DART’s 1995 Transit System Plan. Today, DART operates the nation’s longest LRT system, with 93 miles and 64 stations. “Residents along this section of the line have improved access to the region.” DART President/Executive Director Gary Thomas said. “Southern Dallas is our city’s greatest opportunity for growth,” Dallas Mayor Mike Rawlings said.

December 2016 Railway Age 13

Update Reading & Northern reports 15% growth Despite a soft market for anthracite coal, Reading & Northern reported that its freight traffic has grown over its recordsetting 2015 base: Merchandise traffic (non-coal) is up almost 15%. Its passenger excursion business, which saw a record 100,000 visitors in 2015, is also running 15% ahead of last year’s pace. In order to handle this traffic growth Reading & Northern says it has embarked on a significant program of capital expenditures and announced

hiring of more than 20 full-time freight railroad employees. In recent months, Reading & Northern added six locomotives to its fleet, bringing the total of active locomotives to 36. It acquired four EMD MP15 locomotives at a Norfolk Southern auction. These locomotives are 1,500 hp, four-axle units and will be immediately used in freight service. They are the first of this type to be added to the roster.

BNSF Short Line of the Year: Burlington Junction BNSF Railway named Burlington Junction Railway (BJRY) its 2016 Short Line of the Year at its annual Short Line Conference. BNSF recognized BJRY “for its dedication to promoting safety initiatives, customer relationships and growth opportunities. Since the formation of BJRY in 1985, the railroad has not had a

single FRA reportable injury.” Headquartered in Burlington, Iowa, BJRY operates out of eight different locations throughout Illinois, Iowa and Missouri, moving approximately 15,000 carloads annually. BJRY ships commodities such as frac sand, lumber, tallow, resin and frozen foods. The short line’s

major accomplishments in 2015 included moving 100 frac sand unit trains, as well as building a new 2,000-foot stretch of interchange track in Quincy, Ill. “By working with BNSF, BJRY volumes have grown 27% year-to-date, despite the current difficulties in a soft freight rail market,” BNSF noted.

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Lawrence H Kaufman, 1936-2016

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KEEPING YOU ON TRACK

beyond well-rehearsed speaking points. He saved his greatest skepticism for the hired front groups masquerading as independent think tanks. While much of Larry’s exemplary career was devoted to honest journalism —including the now-defunct Cleveland Press, Business Week, the Journal of Commerce when it was a well-respected daily, and Railway Age as a contributing editor—Larry also served railroads. Here, he differentiated himself by studying and mastering issues, anticipating difficult questions, and going off the record adeptly to explain what really lurked beneath the onion layers. His depth perception on complex issues was extraordinary. The result most often served his masters significantly better than the fact-hollow glib ooze too often discharged by PR and lobbying shops. “As sunlight is the best disinfectant, Larry was among the best at opening the blinds.”

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Railroad industry journalist, analyst, author and long-time Railway Age Contributing Editor Lawrence H Kaufman, 80, died on Nov. 8 in Golden, Colo., after a long illness. In a career that spanned more than a half-century, Kaufman plied his trade at the Journal of Commerce, Business Week, the Association of American Railroads, the U.S. Department of

Transportation, and several Class I railroads. At the DOT during the early 1970s, he served in the Nixon Administration as Special Assistant to the Assistant Secretary for Policy and International affairs. In addition to his work as a Railway Age contributor, he was a columnist for Argus Rail Business and Trains Magazine. For four decades, Railway Age contributing editor Frank N. Wilner interacted in a variety of capacities with Kaufman. They often critiqued each other’s drafts for factual accuracy. Wilner recalls some of his long-time associate and friend’s best qualities: “At his core, Larry was a newspaperman—possessing, nurturing and exercising a healthy cynicism of selfserving press releases peddled shamelessly by expensively dressed PR and lobbying types deep in expense account cash yet shallow in knowledge

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December 2016 Railway Age 15

Update Changing of the guard at Central Maine & Quebec

Two senior executives at Central Maine & Quebec Railway—John E. Giles and Ryan Ratledge—will assume new responsibilities come Jan. 1, 2017. After partnering with Fortress Investment Group in 2014 and leading the transformation of the former Montreal, Maine & Atlantic Railway into the CM&Q, President and CEO John E. Giles (pictured) will assume the duties of Executive Chairman. Chief Operating

Officer Ryan Ratledge will succeed Giles as President and CEO. Giles will continue to lead initiatives supporting CMQ’s strategic positioning for growth and investment, including long-term planning, market positioning and acquisitions. Ratledge, a 22-year railroad veteran, began his career on BNSF, rising quickly through the operating ranks before joining RailAmerica in 2007. While at RailAmerica, he held a variety of positions that included General Manager of the Puget Sound & Pacific Railroad, GM of the Indiana & Ohio Railway, and corporate Vice President-Midwest Region. Ratledge joined CM&Q in 2014, “where he and his team have dedicated themselves to retaining and developing existing and new business, while partnering with connecting carriers to optimize routes and improve pricing and service for CMQ custom-

ers,” the railroad said. “It is a tremendous honor to continue what John began at CM&Q,” Ratledge said. “I am excited to be in this role. CM&Q is a great team of talented people who provide critical services to our customers. I am very encouraged by our business momentum and our future prospects, and look forward to leading CM&Q into this next chapter of our success.” “The promotion of Ryan as my successor is a natural progression and is well-deserved,” Giles said. “He is a highly capable leader with a wealth of rail industry experience who will continue to propel the organization forward. I am confident that Ryan will excel in his new role and I look forward to continuing to work with him in the years ahead.” CM&Q was Railway Age’s 2016 Regional Railroad of the Year.

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CP seeks changes to maximum work hours Canadian Pacific has provided notice to the Teamsters Canada Rail Conference (TCRC) that it will be seeking changes by Transport Canada that would reduce by a third the maximum permissible hours that its Canadian-based running trades employees can spend at the controls of a train. Canadian Pacific called Canadian Transportation Safety Board (TSB) Chairwoman Kathy Fox’s Oct. 31 public pronouncement that 6% of humancaused rail incidents may have involved fatigue “misguided comments” that “do little to enhance industry safety or improve the quality of life for conductors and engineers.” “While CP welcomes the focus on safety and looks forward to working collaboratively with all stakeholders to improve rail safety, these discussions must be fact-based,” CP said. “TSB Chairwoman Kathy Fox noted that 6% of human-caused rail incidents may have involved fatigue—a statement not supported by facts.” CP says it applied the principles of fatigue science during the formulation of the proposed rules, which would see Canadian-based employees move away from the current rule that allows locomotive engineers and conductors to operate a train for up to 18 hours at their discretion. The new rules would allow unassigned train and engine employees to operate for a maximum of 12 hours before getting rest. “We are committed to the health of our employees and our operations,” said CP President and COO Keith Creel. “We are requesting a one-third reduction in the maximum operating time of unassigned train and engine employees. As we are unable to get the TCRC leadership to the table to have meaningful discussions on this topic, we must find alternate ways to improve the work/life balance of our employees while enhancing safety across our network.” CP has commenced the required consultation period in which TCRC-Train & Engine (TCRC-T&E) leadership has until January 7, 2017 to comment. After

they have provided comment, CP says it will respond and file the proposed rule change with Transport Canada. Transport Canada will then have another 60 days to review and either approve, conditionally approve, or reject the new rules. A ARI-37316 Railway Age_island F_ARI Image Ad decision is expected by spring 2017.

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December 2016 Railway Age 17

Watching Washington Frank n. wilner

Amidst concerns, optimism for 2017

ot since Herbert Hoover was President have Republicans controlled the White House and both congressional chambers, which produced the 1930 Smoot-Hawley tariff boosting import duties to record levels, sparking a global trade war and contributing to the depth and length of the Great Depression. Welcome 2017, when Republicans again control the executive and legislative branches and are cozying to President-elect Trump’s retrenchment from globalism. U.S. railroads can ill-afford a collapse in world trade—already weakening for two years—on top of coal’s decline owing to generation plant retirements, low natural gas prices and environmental regulations (whose scrapping will not counter adverse market economics). Dreaded also are foreign buyers shopping elsewhere, should the U.S. withdraw from international climate accords. Even crude oil by rail faces headwinds over safety concerns and more pipelines. Yet there are reasons for railroad optimism—infrastructure investment, tax reform, regulatory rollbacks and a defanging of labor by the Trump Administration. Amtrak, however—but not private sector entrants to the passenger market—is the cooked holiday goose and may be sold to Yankee Candle Co. for a new fragrance, Burned Money. Why? Consider two Trump transportation team advisers—Shirley Ybarra, formerly associated with the libertarian Reason Foundation, which characterizes Amtrak as “a failed national experiment”; and retired Heritage Foundation economist Ron Utt, among whose favorite piñatas was Amtrak public subsidies. Ybarra is warm to the concept of private-sector competition on Amtrak state-supported and long-distance

Railway Age

December 2016

routes. There also is emerging bipartisan interest in AIRNet-21’s bid to lease, maintain, renew and dispatch, through a public-private partnership, the Northeast Corridor, while opening it to competition by private-sector operators. Congressional leadership should remain unaltered. However, Chuck Schumer (D-N.Y.) succeeds retiring Harry Reid (D-Nev.) as Senate Minority Leader—significant because Schumer and Trump, different in so many ways, notwithstanding both being New Yorkers, are conjoined in support of

Expect a new FRA administrator less demanding on PTC installation. increased infrastructure spending. Improbable as that relationship seems, history records that two other improbably linked politicos, former House Transportation & Infrastructure Committee Chairman Bud Shuster (R-Pa.), the current chairman’s father, and the then-senior committee Democrat, the late Jim Oberstar (D-Minn.), found just such middle ground in crafting multimodal transportation bills. Additionally, House Majority Leader Kevin McCarthy (R-Calif.) favors infrastructure spending that Republicans rejected with Obama in the White House—the difference being a Republican linkage to tax reform and tax credits. Expect Democrats, out of political necessity, to climb aboard with Schumer in the lead. While most railroads pay considerably lower effective tax rates than the 35% statutory rate, tax reform is an agenda item that could spawn new

public-private partnerships to double- or triple-track main lines, accelerate short line capital spending and construct improved highways linking ports and expanded rail intermodal terminals. Most crucial to railroads are regulatory decisions of the five-member Surface Transportation Board, where Trump will name a permanent Republican chairman and nominate at least two new Republicans to unfilled seats created by the 2015 STB Reauthorization Act. With Norfolk Southern Vice President Robert Martinez on the Trump transportation transition team advising on STB nominees, railroads are in the catbird seat, suggesting the captive shipper agenda has gone from improbable to impossible. The Republican majority will decide on captive shipper petitions for open access, and if to revise the Stand Alone Cost (SAC) test and the formula for determining revenue adequacy. Expect a new Federal Railroad Administrator with a solid rail safety background, supportive of publicprivate partnerships, less demanding on installation of Positive Train Control, skeptical of electronically controlled pneumatic (ECP) brakes, open to oneperson train crews and encouraging of public-private partnerships. At the National Mediation Board, the terms of the two Democrats and one Republican have expired. Republican Nicolas Geale, who previously worked with Republican Labor Secretary (and Trump DOT Secretary nominee) Elaine Chao, wife of Senate Majority Leader Mitch McConnell (R-Ky.), is ripe for a bump-up elsewhere, allowing Trump (with airline and railroad input) to name two new Republicans and a new Democrat. Rail labor, engaged in national wage negotiations, should fear a Trump-named Presidential Emergency Board should contract talks break down.

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Perspective: Short Line & Regional Linda Darr

Transitioning to a Trump Administration

ne of the most passionately fought Presidential races has gone into the history books. During his campaign, Donald J. Trump called for job growth, competitive business tax rates, support for our nation’s crumbling infrastructure with his “America’s Infrastructure First” policy, and a regulatory process review and reform to simplify and eliminate redundancies and cost. All of these calls bode well for our industry, and we will engage in efforts to ensure our needs are represented in each of these arenas. Three pillars of the stated Trump platform in particular converge with long-held priorities of our industry: common sense tax reform, infrastructure investment, and reducing overly burdensome regulation. ASLRRA recently had a chance to discuss our viewpoints with members of the Trump Transition Team.

Tax Reform

In the area of Tax Reform, the 45G tax credit is of critical importance to our capital-intensive business, with a high percentage of revenue poured back into the business to upgrade and maintain rail and ensure safe and efficient services. The tax credit has enabled short line railroads to increase their infrastructure investment by 128% from its inception in 2004 through 2013. Over this time, short line capital investment has ranged between 24% and 31% of annual revenues, significantly higher than most other industries. In turn, our overall annual federal tax liability has increased by 64% since 2013, the year prior to the credit being enacted. The tax credit is a powerful engine for jobs, investment and making our right-of-way safer. We are encouraging the Trump Administration to preserve the 45G tax 20

Railway Age

December 2016

credit and support its permanency as a key element in tax reform. It is a way to encourage self-funded growth, improved infrastructure and greater safety in our industry. Improving Ailing Infrastructure

President-elect Trump has made clear that renewing our public infrastructure is key for economic growth. He understands that this infrastructure is falling apart and needs renewal. More than 60,000 bridges are considered “structurally deficient,” traffic delays cost the U.S.

Our three pillars: Tax reform, improving infrastructure, and burdensome regulation. economy more than $50 billion annually, and most major roads are rated as “less than good condition.” Short line and regional freight railroads are an important part of the solution in fixing highway infrastructure. Every freight car handled by a short line or regional railroad represents four trucks not using public highway infrastructure. This means less congestion, increased safety for the motoring public, less wear-and-tear on public roadways and bridges, fewer emissions, and more economical maintenance of roads by state and local governments. For these reasons, we are calling upon the Trump Administration to exercise extreme caution in considering any new laws or regulations that would allow truck sizes and weights to increase, because such increases divert

freight from short line and regional railroads onto the worn-out national highway network. Burdensome Regulation

Railroading is the original regulated industry, dating back to the ICC Act of 1887. Relentless over-regulation of the rail freight industry eventually led to its near-collapse in the eastern states and to decades of underinvestment in or abandonment of light-density routes. This crisis was addressed through federal legislation in the 1970s, culminating in enactment of the Staggers Act in 1980, which in part created a path for larger railroads to spin off light density routes, creating the short line industry as we know it today. In recent years, however, over-reaching regulation has become a threat to our small, entrepreneurial businesses. A spate of recent regulations have included measures promoting additional crew with no proven offset for safety; voluminous and overly complex training rules that simply cannot be implemented by a railroad with fewer than 12 employees; and the PTC mandate—an enormously complex technology requiring expertise that is not commonly found on short line railroads and will cost the industry billions of dollars to implement. To continue to be successful, short lines need balanced, fact-based, costbenefit-analyzed regulation that is appropriately crafted to be implemented in a small business environment. We encourage the Trump Administration to aggressively review all business regulations, including those impacting the short line railroad industry, to ensure a strong, balanced approach. We are hopeful that the Trump Administration will take us up on these suggestions. ASLRRA is prepared to carry the short line message forward, working with the Administration.

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OUT OF THE DESERT? No one really knows what 2017 will bring to the rail industry. Right now, educated guesses are about as good as it gets.

f 2016’s wild, throw-predictions-out-the-window runaway freight train of a Presidential election taught us anything, it’s that nothing is ever a given. As the old saw goes, never assume, because it makes an a—well, you get it. Is a traffic recovery under way? Maybe. Do the railroads have a better chance of clamping the lid shut on onerous rules and regulations like forced access (reciprocal switching), and seeing restrictions lifted on coal-fired electric power plants under a Trump Administration, rather than Clinton II? Probably. A concerted industry effort is under way on Capitol Hill to make those things happen. Does Donald Trump’s purported interest in pouring money into U.S. infrastructure mean that rail transportation will benefit? Unknown. 22 Railway Age December 2016

No one really knows what’s going on beneath the hairsprayhardened flaming orange comb-over topping Trump’s head. Since winning the Electoral College vote on Nov. 8, he at times is appearing more “Presidential”—serious, thoughtful, willing to compromise. He seems to recognize gray areas, in sharp contrast to his campaign persona of talking in extreme blackand-white terms. Some observers think that, deep down, he never believed he’d actually win (perhaps explaining his Looney Tunes Tasmanian Devil-like campaign behavior), and now faces the very somber prospect of actually having to be President of the United States—sort of “Now what do I do?” What could a Trump Administration mean to the railroads? Plenty. Or perhaps not so much, because market forces will

By WILLIAM C. VANTUONO, Editor-in-Chief;

JASON SEIDL, Wall Street Contributing Editor; and TOM SIMPSON, Railway Supply Institute

almost always trump politics—pun intended. Following are a few educated observations. Jason Seidl: Will 2017 Trump 2016?

To paraphrase the Grateful Dead, what a long, strange trip it has been in 2016. I am fairly certain that most railroads would love to close the door on a year that brought the group many challenges. Indeed, the railroads not only saw coal traffic decline yet again but also saw intermodal weakness brought about by a soft truckload environment. While growth in automotive traffic was solid throughout the year, it was not enough to offset further weakness in metals, chemicals, petroleum and crushed stone and sand. The railroads

also saw their core pricing power diminish as we moved through the year due to sluggish overall demand and the aforementioned soft trucking market. The railroads did what they could by reigning in costs through headcount reductions, network streamlining and improved operational productivity. Despite the group’s best efforts, earnings remained under pressure in 2016. As I write this article, year-over-year carloadings are looking better for the railroad group, with much of it due to easier prior-year comparisons. Growth in agricultural products and less of a coal traffic decline have also helped. Looking out to 2017, we have hopes for volume growth to return to the industry, albeit at a low-single-digit pace. Indeed, we are forecasting a recovery in intermodal as traffic finds its way back on the rails with rising trucking rates, particularly in the back half of the year. We believe the pending deadline for electronic logging devices (ELDs), coupled with fleet reductions in 2016 by many carriers, will limit capacity as 2017 progresses. This combination should lead to higher spot then contractual pricing for truckload services, which in turn should help the railroads regain some of the transitory business lost to the highways. Coal traffic, while not expected to show a sharp rebound, should not be nearly the drag it was for the industry in 2016. For some carriers, coal could be up, depending on the combination of winter weather, natural gas prices and exchange rates. Agricultural loadings should be strong to start the year, but a record harvest will likely present very difficult back-half comparisons for the group. Automotive growth should continue to slow considerably, as the law of large numbers takes over while other industrial products should see modest growth. Construction materials and stone may see a surge in the back half of the year as infrastructure projects take hold. Cowen and Company’s proprietary 3Q Railroad Shipper survey noted pricing expectations slipping to 2.1%, down from the prior two quarters of 2.9% each. We believe this sequential negative pricing trend will begin to correct itself as we move through the course of the year. While overall economic growth should help, so should the anticipated recovery in the truckload market. However, we note that intermodal pricing recovery typically lags truckload pricing. A discussion of 2017 could not be complete without discussing the political ramifications of the recent election some of you may have heard about. President-Elect Trump’s election night victory caught many people and pundits by surprise. A Trump Presidency will undoubtedly have ramifications on the railroads and the country as a whole. Trump has been an outspoken critic of the North American Free Trade Agreement (NAFTA) and has vowed to renegotiate or scrap the treaty. He does have the authority to do so as there is a clause in the agreement that allows a party to withdraw six months after it has given notice. Trump has been particularly critical of automotive companies that have moved their plants to Mexico. This is rather important, as some two million vehicles (just over 10% of total vehicles sold) are imported from Mexico each year. Trump has also openly discussed implementing tariffs against Mexico, some of them stiff. Canada should not be left out of this discussion either, but it appears that relations are far better with Canada especially and December 2016 Railway Age 23

2017 FREIGHT RAIL OUTLOOK

“What a long, strange trip it has been in 2016.” – Jason Seidl, Cowen and Company

has manufacturing associations lobbying their government to prioritize U.S./Canadian trade relations ahead of Mexico. In addition to NAFTA, potential changes to trade with China and other Asian countries also appear to be on the table. Fears of potential changes go beyond our borders, as the Japanese Prime Minister was the first world leader to meet with the President-Elect Trump in person, altering his schedule to do so. Washington appointments will also have an impact on the rail industry. The most direct impacts will occur when 3 new members are appointed to the Surface Transportation Board by the new president. While any appointee is subject to Senate confirmation, we doubt any nominee by President Elect Trump will fail to get confirmed given the Republican majority. Such anticipation has led to the Association of American Railroads to call for a complete halt to all major rule making until the STB positions are filled. Trump is very pro-business, especially given his views on reducing corporate tax rates (a potential boost for earnings for most U.S.-based corporations) and proposed infrastructure spending (an area where he can undoubtedly forge alliances across the proverbial aisle). Hence we would be surprised to see any STB appointments that would do damage to the rail industry. We remain optimistic on the rail group as we head into 2017, and are rooting for the President-Elect to be successful, as we do with every incoming President. Earnings growth should come to the North American rail group far easier in 2017 than 2016. However, given the group’s current pricing power and the state of capacity in the supply chain, any outsized growth will not likely occur until the back half of the year. 24 Railway Age December 2016

Tom Simpson: Innovative Ideas Needed

Despite some bright spots like grain and automobiles, U.S. rail traffic continues its march to historic lows. In October, the Association of American Railroads reported the 20th straight month of traffic declines and more than 350,000 railcars in storage. The Railway Supply Institute American Railway Car Institute (ARCI) Committee railcar orders report, always a leading indicator for our industry, continues the bleak economic news, showing new freight car orders totaling just 5,526 for the third quarter of 2016. While total 2016 railcar deliveries will approach 65,000, the backlog of car orders continues to dwindle. A new “loss of orders” footnote has been added to the report to explain why the numbers do not track from quarter to quarter. What does all this mean? Paradigm change is a phrase we have heard from Class I railroad executives. What will help the industry survive the current downturn? Class I executives are looking to technology and an improved, more-focused quality process. When RSI Chairman Tom DeJoseph of Loram Maintenance of Way, Inc. and I were invited to attend the REMSA board meeting this past summer, we heard the call for innovative technology from Class I officials. Those who attended the recent RSI/CMA 2016 Rail Expo and Technical Conference in Omaha and saw Union Pacific Chairman and CEO Lance Fritz’s keynote speech heard a similar refrain. With more than 800 railroad suppliers listening, Lance described the best ideas that were helping UP weather the downturn. While the railroad likes to look at 10- and 20-year snapshots, Fritz described the company’s goal as “wanting to

2017 FREIGHT RAIL OUTLOOK

do better tomorrow with assets we have today.” He spoke of “Machine Vision” car imaging, automated inspection of trains to weed out defective cars before they can lead to a derailment. Using car imaging technology reduces the four hours it would take to inspect a normal train to a few minutes, he said. He also spoke of UP’s movement to longer rail, reducing the number of welds needed in continuous welded rail because welds are a notorious weak point in the rail infrastructure. In a similar vein, Fritz described how UP has devised an innovated thermite head repair weld that also reduces weak points in the rail infrastructure. From the car and locomotive perspective, he said UP is looking to strengthen the underside of rolling stock and looking for more flexibility and capacity in new railcars. As an example of next-generation technology, Fritz described the use of drones to inspect tunnels and bridges, reducing the risk to UP employees. Other Class I railroads also are looking for suppliers with innovative ideas on how to bring new technology and innovation to the rail industry. While RSI was in Omaha, representatives of the RSI Board of Directors and the RSI Quality Committee met with UP Vice President Supply and Continuous Improvement Lynn Kelley, whose background is in the auto and aerospace industries. She described the difficult operating environment she found in those industries and how she applied that knowledge to UP.

She described UP’s approach to quality, which goes beyond the M1003 programs adopted by the AAR and Class I railroads. Using what it calls PPAP (Production Part Approval Process), UP is working with its suppliers to identify risks in the manufacturing process to prevent catastrophic events. PPAP is currently focusing only on high-risk areas in the roadbed infrastructure—ballast, rail, frogs, etc. The next high-risk area UP will focus on is rolling stock. Speaking of quality, the AAR and RSI quality committees are discussing developing an educational effort to again focus the industry on continuous quality improvement. A buzz-phrase in the 1990s, continuous quality improvement seems to lose steam in down economic cycles when it should be most important. As Lynn Kelley and UP have discovered, an emphasis on quality, especially in safety-critical areas, can play a key part in helping the industry face economic downturns. Lessons here? Suppliers who bring innovative technologies to their customers that will reduce derailments and employee exposure to dangerous situations will be the suppliers that succeed and grow. Companies that adopt a rigorous quality program along the lines of UP’s PPAP will succeed and grow. Our industry has always bounced back from economic downturns, as in the early 2000s and the early 2010s. We may see a different rebound this time, fueled by technology, innovation and continuous quality improvement.

Wishing you happy holidays and safe travels in the year ahead.

PHOTO: NICK SUYDAM

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December 2016 Railway Age 25

2017 FREIGHT RAIL OUTLOOK Freight Cars: Recovery Will Take Some Time

The most recent freight car forecast from Economic Planning Associates calls for deliveries of just under 62,000 units in 2016, as carbuilders work off significant backlogs, followed by a 21,000-car plummet in 2017, a slightly worse 2018, and the beginnings of a small rebound in 2019. “Due to strength in boxcars, hi-cube covered hoppers, and mid-sized hoppers, our 2016 estimate of total railcar deliveries edged up from 60,300 cars to 61,800 cars,” said EPA principal Peter Toja. “However, weaknesses in tank cars, coal cars, flat cars, and mill gons will serve to lower 2017 assemblies to 41,000 cars. After a further easing to 40,000 deliveries in 2018, demand for railcars will rebound on an annual basis, reaching 51,500 cars in 2021.” “Railcar demand continues to be relatively weak,” said Toja. “Orders of 18,799 cars through the first three quarters of this year were far outpaced by assemblies of 47,519 cars, sending backlogs down from 111,000 at the beginning of the year to 77,600 units at the end of September. Still, backlogs represent 5.05 quarters of production at current assembly rates. “However, we anticipate a general softening in deliveries for most car types during the next two years before we see a pickup in assemblies once again in 2019. “Our weak economy continues to dampen rail traffic. The hardest-hit sections of rail product movements were coal,

petroleum, forest products, and metallic ores and metals. Due to a record harvest and strong export markets, grain haulings scored an impressive gain of 5.6% through September. “Based on significant backlogs, we expect an acceleration in boxcar assemblies that will result in deliveries of 3,250 units this year and 3,500 cars in 2017. We look for deliveries of about 2,000 cars per year during the longer term. “Due to strength through September and current backlogs, we look for deliveries of 11,500 hi-cube covered hoppers this year and 7,500 units in 2017. From 2018 through 2021, deliveries will be in the range of 4,000-5,000 cars per year. “Given the assemblies to date and the continuing growth in grain and soda ash demand, we have raised our mid-sized covered hopper deliveries forecast from 8,000 to 10,500 cars this year. Next year, we look for 7,000 cars to be delivered. From 2018 to 2021, deliveries will average 6,000 cars per year. “Demand for coal carrying equipment has vanished. During the first three quarters of this year, there were no orders for aluminum-bodied hoppers and gondolas. “The current energy environment is sluggish, at best, and we noted a slowing in tank car orders and assemblies. As a result, we are lowering our 2016 tank car delivery estimate from 20,000 to 18,000, and then to 8,000 cars in 2017. From 2018 to 2021, demand for tank cars will gradually rise from 9,000 units to 15,000.” RA

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Ben Vient

“I

By BEN VIENT, Managing Editor

think it’s one of the first times that Amtrak, PennDOT and Norfolk Southern were all at the same table answering questions from legislators on this issue,” says Lucinda Beattie, Vice President of Transportation for the Pittsburgh Downtown Partnership, a business advocacy group focused on the revitalization of Pittsburgh, Pa. Beattie refers to the Aug. 23, 2016 hearing at Pennsylvania’s House Transportation Committee, on one of Pittsburgh’s developing transportation issues: restoring passenger rail service to western Pennsylvania. Until 1969, 12 daily Pennsylvania Railroad (after 1968, Penn Central) intercity trains connected Pittsburgh eastward. By 2005, service had been reduced to one daily train: Amtrak’s current Pennsylvanian, created in April 1980, with current average speeds of 45 mph. Following the Great Recession of 2008, Pittsburgh risked losing its one daily passenger rail connection to eastern Pennsylvania. “We had to speak up about that,” Beattie recalls. Those discussions spurred the transportation focus within the Pittsburgh business community’s Downtown Partnership. “It really helped many of us to gather and realize how important transportation issues are to the success of a business community,” she says. Now, discussions focus on increasing frequency to three daily trips, over the freight-dense Norfolk Southern (former PRR, then Penn Central, and then Conrail, prior to the latter’s acquisition by NS and CSX in 1999) main line that

connects Harrisburg to Pittsburgh. In 2014, the Pittsburgh Downtown Partnership produced a report advocating to increase rail service, entitled “On Track to Accessibility,” emboldened by the fact that Pennsylvanian ridership increased 14% between FY 2010 and FY 2015. The report estimates the additional service would cost between $10 million to $13 million per year. On Feb. 26, 2015, the Pennsylvania Department of Transportation (PennDOT), responsible for funding the service under section 403 (b) of the Rail Passenger Act of 1970, wrote to Amtrak: “AS WE CONTINUE to get comments submitted on the Keystone West, we’d like to have Amtrak provide PennDOT with a high-level cost estimate for the addition of one to two trains a day to/from Harrisburg. This estimate should include operating and capital costs. “We know that, ultimately, in order to make this happen, we would need to work with Norfolk Southern and Amtrak to identify timing for the potential trains, get trainsets ordered, and work through proposed labor to run the trains. “At this time … we only need a high-level estimate. Before we take on any of those bigger picture steps, we need an order of magnitude cost of what it would take to fund an additional one to two trains a day on the Pennsylvanian. “Could you let us know how quickly Amtrak could get us this estimate?” December 2016 Railway Age 27

TRANSIT focus: PITTSBURGH

To date, there has been no answer to this February 2015 request, says PennDOT. “It’s really become now a question of democracy,” Beattie explains. “Are we being listened to on these transportation issues?” At the Aug. 23 hearing, Norfolk Southern Vice President Government Relations Rudy Husband referred to the 204-mile main line between Harrisburg and Pittsburgh as a “premiere corridor” for rail freight between the East Coast and Midwest: “We will coordinate the operational feasibility study. We will provide estimated costs to the sponsoring public agency, but these studies, they’re not cheap, and they take time, at least a year or probably more.” Over two dozen civic groups submitted letters of support for increasing the frequency of Pennsylvanian service: From Allegheny County’s Congress of Neighboring Communities: “Our residents now have fewer transportation options within a 500-mile radius than they have had in the past 40 years.” From Pittsburgh’s Green Building Alliance: “Increased passenger rail service has the potential to eliminate nearly 73,000 automobile trips and more than 16 million vehicle-miles from Pennsylvania , which directly reduces CO2 emissions, criteria air pollutants, and non-source point pollution.” From Henry Pyatt, Pittsburgh’s Small Business and

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Redevelopment Manager: “The American Lung Association currently rates Johnstown, Altoona, and Pittsburgh as among the worst 25 metropolitan areas for year-round airborne particulate matter of the 430 metropolitan areas in the nation. Increased passenger rail service cannot only reduce emissions per passenger-mile, but it can induce activities in urban cores.” From AARP Pennsylvania: “Passenger rail is a mobility option for midlife and older people who travel both within congested regional corridors and between cities separated by longer distances.” From the Greater Pittsburgh Hotel Association: “This investment will provide huge benefits to the region, with more

TRANSIT focus: PITTSBURGH

people visiting and exploring our city.” From Sue Etters, PA Committee for People with Disabilities: “I and other members of the disabled community use the Amtrak train as our number one means of transportation to Harrisburg. We want to continue to build and improve the communities in which we live.” From the Oakland Planning and Development Corp.: “Educational and medical institutions are some of the main drivers of Pittsburgh’s new economy. They make Oakland a regional and national destination. Improving passenger rail service … will provide … the necessary connections to continue to thrive as an economic hub going forward.” From Visit Pittsburgh: “Traveling by train has become increasingly more popular to younger generations, including millennials.” From Sustainable Pittsburgh: “Increased service for western Pennsylvania will bring material benefits serving the social, economic and environmental needs here and for the Commonwealth as a whole.” From the Pittsburgh Community Reinvestment Group: “Adding two more trains to the highly efficient Pennsylvanian route has practically no downside.” Joining in the support: commissioners from Allegheny, Westmoreland, Cambria and Mifflin counties; and the mayors of

1_2pgHorzWrkStTraining2016.qxp_Layout 1 8/17/16 3:25 PM Page 1

Johnstown and Pittsburgh. No letters were submitted in opposition, says Eric Bugaile, Executive Director of Pennsylvania’s House of Representatives Majority Transportation Committee. “The people of western Pennsylvania have built momentum for this and are voicing their support.” “We’re trying to find the middle ground with Amtrak and Norfolk Southern,” says Mark Spada, board member of Western Pennsylvanians for Passenger Rail. “We believe a large number of passengers are not being served.” Pennsylvania’s House Transportation Committee adopted Resolution 1103 on Oct. 24, 2016: “To conduct a study of the feasibility of providing two additional passenger rail trips daily between Pittsburgh and Harrisburg and its impact on existing freight rail service... Resolved, that the committee issue its report to the Speaker of the House of Representatives within nine months from the date of adoption of this resolution.” The people of Pittsburgh wait for the resolution to be revisited at the start of the 2017 legislative session, in their city with a history museum named after their late Senator John Heinz. Engraved on a museum wall, one of his principles: “What makes a society thrive are citizens determined to see shared ideals realized—realized not just for the select few, but as our pledge says, ‘for all.’” RA

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LightRaiL2017

PRESENTED By RAilwAy AgE AND RT&S

Planning, EnginEEring and OPEratiOns April 18 - 19 Grand Hyatt, Denver, CO conference topics: • Alternate Vehicle Technologies (AVT) • The Streetcar Boom • Analysis of Expedited Service • Signaling and Train Control Options • Shared-Use with Freight Rail • North American New-Build/Expansion Project Updates • Carbuilder Roundtable Discussion • Environmental Permitting • RTD FasTracks Program

www.railwayage.com/lightrail

A special one-day RAil TRAnsiT FinAnce FoRum will follow light Rail on April 20, 2017. The forum will explore financing new-build and expansion/improvement projects and acquiring new rolling stock. We’ll cover what you need to know about the FTA process, public-private partnerships, navigating federal, state and local requirements, and sourcing different types of financing. www.railwayage.com/railfinance

Sponsorships & exhibits available. Contact Jon Chalon at jchalon@sbpub.com, 212.620.7224

Well-connected Though its basic design dates back to 1873, the knuckle coupler continues to improve in reliability, maintainability and safety. By WILLIAM C. VANTUONO, Editor-in-Chief

ouplers need to be the strongest link in a train, capable of withstanding extreme forces of buff (compression) and draft (tension). Since the semiautomatic “Janney” knuckle coupler was patented in 1873 and mandated by the 1893 Safety Appliance Act, couplers, and the standards that govern them, have undergone numerous improvements and adaptations for varied types of car designs and service applications, all of which are under the auspices of the Association of American Railroads.

The Basics

The Janney coupler has withstood the test of time with only minor changes. The current AAR contour dates back to the 1888 Master Car Builders Association design, which was based on the Janney patent. The Type D, adopted in 1916 by the MCBA, had interchangeable parts, simplifying maintenance. The Type E, adopted in 1930 by AAR-predecessor American Railway Association, also had interchangeable parts, though not with the Type D. It is still the most widely used design. Hazmat tank cars are equipped with Type E double-shelf couplers. The Type F is a vertically interlocking variation designed to help prevent derailments and wrecks

from disconnecting couplers. There are versions with rotating shafts for rotary-dump hopper cars. The Type H is a “tightlock” variation designed to reduce slack action and improve safety on passenger cars. It is under APTA supervision. The interlocking contour of knuckle couplers was the first feature to be standardized. Prior to about 1910, there were many proprietary head designs and contours. By 1910, suppliers had adopted the then-standardized MCB-10 contour, soon to become the AAR-10. In the 1930s, the Type D was improved and became the Type E, though with the same contour. A few years later, the 10 contour was modified into a then-optional 10-A standard contour. The current contours, for a plain Type E, remain the AAR-10 and 10A. All Type Es are equipped with heads of an identical basic design. All have the 10-A contour at coupler mating lines, including all external vertical faces of the knuckle and body front faces and guard arm faces. However, they can be equipped with various compatible shank designs and special fittings. For identification purposes, each design is assigned a Catalog or ID Number. Suffix letters indicate modifications to existing designs. All Type E couplers are furnished with bodies, knuckles, December 2016 Railway Age 31

Mechanical focus: Couplers

Strato MAXâ&#x201E;˘ Type E components

and locks of quenched and tempered Grade E steel. The AAR has adopted specific-design Type Es as optional standards for certain types of service, or to suit a given car geometry. These couplers are protected in Interchange Service against improper replacement under AAR Rule 16. The AAR has also approved certain variables with special features covered by Rule 72 for replacement. Almost all North American freight cars are equipped with Bottom Operation couplers, unless specifically ordered with Top Operation. All standard operating parts are

interchangeable among Type Es or E/Fs, except when the locklift arrangement precludes a design change in locklift assemblies. Type E operating parts are designed so that they will not fit into other types of couplers, except for the C10 Knuckle Pin, used in all AAR types; the C2 Retainer Pin, used in all AAR couplers with inverted knuckle pins; and the E6A Top Locklift Assembly, used in all top operating units. Type Es and parts are governed by several AAR Specifications and Interchange Rules: M-118 (Knuckle Pins and Shank Connecting Pins); M-201 (General for Steel Castings); S-172 (Inspection and Maintenance on Cars); M-211 (Purchase and Acceptance); M-212 (Secondhand and Reconditioned); Rule 16 (Type E Couplers and Parts); Rule 19 (Yokes for Type E Couplers); Rule 88 (Couplers and Parts Required for Car Acceptance); and Rule 90 (Couplers and Parts Prohibited in Interchange). Type E/F couplers are governed by the same AAR rules, except for Rule 17 (E/F Couplers and Parts); Rule 20 (F Yokes); and Rule 21 (Front Follower Blocks). Type Fs are equipped with the F-design head end, shank and butt end. The F design has several features not available in the E and E/F, among them a frontal interlocking wing pocket and lugs that interlock with any mating interlocking coupler. These safety features help keep the couplers and derailed cars in alignment to assist in preventing cars from overturning and telescoping. A frontal bottom support

Trace the history of passenger-train travel from its heyday to the formation of Amtrak, the government-subsidized railroad created as a for-profit carrier.

Frank Wilner 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.

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Railway Age

December 2016

mechanical FOCUS: couplers

shelf is standard on all Type Fs to prevent a mated, pulledout coupler from falling onto the roadbed and becoming a hazard. Only 3/8 inches of free contour slack exists between two new F couplers, compared to 25/32 inches for two new Type Es or Type E/Fs. The result is improved train handling, and wear reduction on head surfaces resulting in extended service life, due to less vertical interface movement and free contour slack. The Type F is governed by the same AAR rules as the Type E, except for Rule 20. Principal Suppliers

Strato Inc. is relatively new to the coupler business, compared to suppliers that trace their ancestry to the late 19th century. Its MAX™ line of coupler systems, in service for about eight years, “offers double the AAR fatigue life, exceeding 1.5 million cycles.” The MAX E knuckle passed the AAR M-216 fatigue requirement standard in 2010. The MAX line includes a 33.5-inch bottom-shelf E coupler body, two E/F coupler bodies (43-inch, bottom shelf; 60-inch, no bottom shelf), the M-215 and M-216 approved E knuckle, and an F knuckle, plus a knuckle thrower, knuckle pin, single lock-lift assembly and reduced-slack lock. All are made of AAR M-201 enhanced grade E steel. Strato stresses that AAR standards “are minimum standards,” and that many customers have requirements “well beyond the minimum.” It also notes that its fatigue requirements extend beyond knuckles to coupler bodies. In 2017, the company will be expanding its product line to include double-shelf couplers with Type F style heads for tank and hopper cars. ASF-Keystone®, a division of Amsted Rail®, manufactures a complete line of AAR-approved couplers, yokes, knuckles and articulated connectors, which as a group the company terms “energy management systems.” ASF-Keystone describes itself as a “premier manufacturer of fatigue-resistant couplers. Our standard and specialty couplers are engineered to do more than meet AAR-approved standards but push beyond them. We also provide a broad array of high-performance coupler yokes, all rigorously tested to ensure forces applied to the coupler head are dampened by the gear.” ASF-Keystone tests and proves all of its energy management systems on an impact test track “with the most demanding railcars in service. We engineer integrated end-of-car systems for effectively reducing impact stress.” McConway & Torley, a Trinity Industries company, recently introduced the AAR-approved FR209E High Performance Rotary coupler system, which is interchangeable with the current FR207E systems and “offers an economical alternative for both new car and maintenance applications.” McConway & Torley says its slack-reduced coupler bodies, knuckles and lock components “offer complete interchangeability with older design revisions” as well as “improved fleet performance by extending coupler and draft system life slack reduction, which decreases train lengths and lowers impact forces.” RA

Legal Notice

If you bought Steel Products from one or more Defendants between April 1, 2005 and December 31, 2007, you may be affected by a Class Action Settlement. What is the Settlement about? Eight steel manufacturers, ArcelorMittal S.A. and ArcelorMittal USA, LLC (together “ArcelorMittal”), Nucor Corporation, United States Steel Corporation (“U. S. Steel”), Gerdau Ameristeel Corporation, AK Steel Holding Corporation, Steel Dynamics, Inc., SSAB Swedish Steel Corporation and Commercial Metals Company (collectively, “Defendants”) were sued by several businesses (“Plaintiffs”) who allege that the Defendants conspired, in violation of the U.S. antitrust laws, to restrict their output and therefore raise or “fix” the prices for certain steel products sold for delivery in the United States between April 1, 2005 and December 31, 2007. A settlement has been reached with U. S. Steel, which has agreed to pay $58 million into a Settlement Fund. This is in addition to $105.9 million in settlements (pending court approval) that were achieved with Commercial Metals Company, AK Steel Holding Corporation, Gerdau Ameristeel Corporation and ArcelorMittal earlier this year. Proposed settlements in the case to date now total $163.9 million. U. S. Steel denies the allegations. The litigation is continuing against the three non-settling Defendants.

Who is a Settlement Class Member? You are a Settlement Class Member if you Purchased certain Steel Products directly from any of the Defendants or their subsidiaries or controlled affiliates at any time between April 1, 2005 and December 31, 2007 for delivery in the United States. In general, “Steel Products” include carbon steel slabs, plates, sheet and coil products, galvanized and other coated sheet products; billets, blooms, rebar, merchant bar, beams and other structural shapes; and other steel products derived from raw carbon steel and sold by Defendants. The terms “Steel Products” and “Purchased” are more specifically defined in the full Notice and the Settlement Agreement.

Will I get a payment? If you are a Settlement Class Member and do not opt out, you will be eligible to file a claim at a later date to receive money from the Settlement.

What are my rights? If you are a Settlement Class Member and do not opt out, you will release certain legal rights against U. S. Steel, as set forth in the full Notice and in the Settlement Agreement with U. S. Steel. If you do not want to take part in the U. S. Steel Settlement, you have the right to opt out. To opt out of the Settlement, you must do so by September 10, 2014. Settlement Class Members have the right to object to the Settlement. If you want to object, you must do so by September 10, 2014. Information on how to opt out or object to the Settlement is contained in the full Notice and at www.SteelAntitrustSettlement.com. You may speak to your own attorney at your expense for help.

When is the Approval Hearing? A Final Approval Hearing to consider approval of the U. S. Steel Settlement is scheduled to be held in Courtroom 2503, Everett McKinley Dirksen United States Courthouse, 219 South Dearborn Street, Chicago, IL 60604, on October 17, 2014, at 11:00 a.m. At that time, the Court will also consider Plaintiffs’ Counsel’s request for attorneys’ fees and/or reimbursement of litigation expenses. You may appear at the hearing, but your attendance is not required. The date and location for this hearing may be changed on further Order of the Court.

This is a Summary, where can I get more information? You can get complete settlement information, including a copy of the full Notice and the U. S. Steel Settlement Agreement, by visiting www.SteelAntitrustSettlement.com.

www.SteelAntitrustSettlement.com December 2016 Railway Age 33

Rail tRansit Finance RAILWAY AGe FORuM 2017

Financing the Future oF rail transit April 20 Grand Hyatt, Denver, CO Forum topics: • What You Need to Know about the Federal Transit Administration Process • Public-Private Partnerships: The New Paradigm • RRIF Loans, Bond Issues, Special Taxes and Voter Referendums • Balancing Federal, State and Local Requirements • When Design-Build-Operate-Maintain is a Good Approach • Sale-Leasebacks and Other Forms of Creative Financing • Finding the Right Consultants and Program Managers • Project Planning that Gets Financial Results

www.railwayage.com/railfinance

Light RaiL 2017 will be held in Denver on april 18-19, preceding the Rail transit Finance Forum. it will offer a comprehensive review of the specialized technical and operational issues associated with light and interurban railways. it will also examine the relationship between transportation and economic development in a modern urban environment. Learn more at www.railwayage.com/lightrail

Sponsorships & exhibits available. Contact Jon Chalon at jchalon@sbpub.com, 212-620-7224

People

Meetings

High profile Mark J. Rittenbaum, Executive Vice President, Commercial & Leasing at The Greenbrier Companies, Inc. is transitioning to President of Greenbrier Leasing Corp. (GLC), in anticipation of James T. Sharp’s retirement Dec. 31, 2016. Rittenbaum will have oversight responsibilities for all Commercial & Leasing activities in North America and Latin America, with particular emphasis on new railcar sales, leasing and enhancement of customer service design. Jim Cowan, President of Greenbrier Rittenbaum Greenbrier Cos. International, will oversee Commercial activities in all railcar markets outside the Americas, while continuing as CEO of GBW Railcar Services LLC, Greenbrier’s railcar repair and refurbishment joint venture with Watco Cos. LLC. Alejandro Centurion continues as President of Greenbrier’s Global Manufacturing Operations (GMO). Centurion is credited with implementing Greenbrier’s global manufacturing and engineering system for new railcar manufacturing. Currently, GMO’s global output accounts for approximately 75% of Greenbrier’s annual worldwide revenue. Don Davage joined Caltrax Inc.’s rail team as sales representative for railcar owners and shippers in Canada and the United States.

Washington, D.C. office of WSP | Parsons Brinckerhoff, serving as a principal safety consultant supporting the firm’s transit and rail practice.

Alan C. Lullman joined Strato, Inc. as Vice President of Sales.

CSX promoted Michael Rutherford to Vice President-Industrial Products.

Canadian Pacific named Nadeem Velani Vice President and Chief Financial Officer. He had been serving in an interim capacity since Sept. 2016.

Ricardo Rail has appointed Brian Ruddy to the new role of Business Development Manager, U.S.

Harsco Corp. appointed Jeswant Gill as President of Harsco Rail, based at Harsco Rail headquarters in Columbia, S.C. Herzog announced that after 46 years in the heavy civil construction Industry, Ralph G. Larison, Senior Vice President and National Construction Division Manager, has transitioned to the Board of Directors of Herzog Contracting Corp. Myers Power Products named Jon Waggener as Vice President, Sales and Marketing. Davy Leung has been named a Senior Principal Technical Specialist in the Orange, Calif.office of WSP | Parsons Brinckerhoff. Louis J. Brown has been named a Senior Engineering Manager in the

December 15-16 2016 2016 Big Data in Railroad Engineering Conference University of Delaware Newark, Del. Contact: http://www.engr. udel.edu. January 11-12, 2017 Midwest Association of Rail Shippers (MARS) Winter Meeting, Hilton Chicago/Oak Brook Hills Resort, Oak Brook, IL Contact : (630) 513-6700 www.mwrailshippers.com. January 24-27, 2017 2017 APTA Business Member Board of Governors’ Annual Business Meeting Opal Sands Resort 430 South Gulfview Boulevard Clearwater, FL 33767 Contact: Ann-Marie Glanville (202) 496-4836

100 YEARS AGO in

aglanville@apta.com. April 18-20, 2017

December 22, 1916 Christmas on the b.r.&P. The Buffalo, Rochester & Pittsburgh issues to its employees a Christmas leaflet in three colors, green, red and white: “In the Christmas season there will be more bundles to be kept out of the aisles, a greater possibility that some may be left behind. Our trainmen need no reminding of their duties in this regard. Accidents at any time are distressing, but vastly more so at Christmas time. Attention to details; a practicing of the little, everyday kindness which cost so little, yet means so much; these are the things which lift us upward toward the goal of ultimate perfection which we seek.”

Railway Age/RT&S Light Rail Conference: Planning, Engineering, Operations, followed by Rail Transit Finance. Grand Hyatt Denver, Colorado. Information: http://www.railwayage.com. conferences@sbpub.com. June 7-8, 2017 Railway Age Third Annual Rail Insights Conference Union League Club of Chicago Information: http://www.railwayage.com. conferences@sbpub.com.

December 2016 Railway Age 35

Products Current by GE’s One LED solution Current powered by GE announces their latest LED railway signal, Ace™. The lamp is a white LED module for use behind existing transit and railway wayside housings with existing colored lenses, and is a direct retrofit for incandescent applications. “Ace by Current is a one for all fit” says Natalie Picot, Product Manager at Current, powered by GE. “We’ve designed this white LED signal keeping in mind the requirements of our customer. Our goal is to provide them with a retrofit solution to minimize labor and maintenance expenses while ensuring reliability and robustness.” Picot explains how one LED signal can simplify wayside applications: “By stocking just one white LED signal, railways benefit from streamlined supply chain, ease of stocking and overall simplification. The Ace™ signaling module will replace the need for red, yellow, and green signals to just one white LED module which works behind existing lenses. This significantly simplifies the maintenance process.” Where needed, custom brackets are also available for a more precise fit. Ace™ signaling modules are engineered to meet military radiated immunity standard 50V/m MILSTD-461F, which exceeds the AREMA 7.1.10 standards. The LED module’s self-contained design protects it from dust and moisture, to better life span and performance. Contact: www.currentbyge.com/transportation or 1 888 MY GE LED

BAK’s Quick Connect Sign Clamp BAK Corporation announces its Quick Connect Sign Clamp, a patent pending system that it says allows track workers to install and uninstall signs in minutes. BAK says this clamp focuses on safety, time, and money. While the current method of installing railroad signs can be dangerous and lead to workplace injuries, BAK says its Quick Connect Sign Clamp only takes minutes to install and remove, reducing the risks of injuries. By replacing the hammering sign method, BAK says the Quick Connect Sign Clamp saves time, in all weather conditions. BAK also says its Quick Connect Sign Clamp saves money because “no more cut signal cables leaving millions of dollars of freight stuck waiting for signal line to be repaired, and it can be installed and uninstalled over and over again.” Contact: Brian Kalchbrenner 708-674-3122; bakcorp@ comcast.net 36

Railway Age

December 2016

Ad Index Company

Phone #

American Railcar Industries

639-940-6020

Fax

URL/Email address

Page #

636-940-6100

sales@americanrailcar.com

Ameristar Perimeter Security USA, Inc 918-879-6011

918-835-0899

allen.wright@assaabloy.com

Amsted Rail Group

312-922-4516

312-922-4597

kskibinski@amstedrail.com

BMO Capital Marketing

312-461-3879

CIT

212-461-5713

212-461-5694

abby.cohn@cit.com

Danella Rental Systems, Inc.

610-828-6200

816-828-2260

pbarents@danella.com

Dixie Precast

770-944-1930

770-944-9136

fbrown142@aol.com

ECN (Canada) Holdings Corp.

312-982-8701

hzander@ecncapitalcorp.com

Georgetown Rail Equipment

512-869-1542 ext.5292 512-863-0405

bachman@georgetownrail.com

Holland Co.

708-367-2987

708-672-0119

ptenhoven@hollandco.com

NRE

618-241-9270

618-242-8519

info@pnrailroad.com

Glenn@orxrail.com

ORX

814-684-8484

william.thomsn@bmo.com

3 26 9

Penn Northeastern Railroad

215-855-7110

212-855-7033

info@pnrailroad.com

Plasser American Corp.

757-543-3526

757-494-7186

plasseramerican@plausa.com

Progress Rail Services

256-505-6402

256-505-6051

info@progressrail.com

Railquip Inc

770-458-4157

770-458-5365

sales@railquip.com

Railworks

866-905-7245

952-469-1926

ksimpson@railworks.com

Railway Educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

Strato

732-317-5406

732-981-1222

korozco@stratoinc.com

Trainyard Tech LLC

724-443-8881

cra2@zooninternet.net

VTG Rail

618-343-0600

618-659-9532

sales.northamerica@vtg.com

29,32,C3

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

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, KY, Jon Chalon 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, Canada – Quebec and East, Ontario Jerome Marullo 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

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

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

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

December 2016 Railway Age 37

equipment Sale/Leasing

Available For Lease LOCOMOTIVE BATTERY

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

AGM64RR

◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides. For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail jgoodwin@mwrail.com www.carmathinc.com

• MAINTENANCE FREE SEALED LEAD ACID BATTERY • • 214 AMP HOUR BATTERY CAPACITY • 750 LBS • • 3800 AMPS PEAK CURRENT • 1600 CCA @ 80˚ F • • 1450 CCA @ 32˚ F • 1300 CCA @ 0˚ F • • CYCLIC CHARGE VOLTAGE 76.8V - 78.9V • • FLOAT CHARGE 72.0V - 73.6V • 64V BATTERY • • BUILT-IN FORKLIFT POCKETS FOR EASY INSTALL •

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 4480 cu ft Aluminum Rotary Open Top Gons

www.STARTPAC.com

65 ft, 100-ton log spine cars equipped with six (6) log bunks

OR TOLL FREE 844.901.9987

Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

RAILCAR CLEAN & PREP LOCATIONS FOR SALE

GLOBAL RAIL TENDERS AGM64RR (3.4in x 5in).indd 1

18/02/2016 15:46

6 LOCATIONS. FIVE ON RAILROAD PROPERTY, ONE IS AN OWNED SHOP WITH 1.2 MILES OF TRACK, COVERED REPAIR SPOTS W/ OVERHEAD CRANE AND ROOM FOR TRACK EXPANSION. LONG TERM CONTRACTS IN PLACE. SEND INQUIRIES TO OWNER, P.O. BOX 19060, FOUNTAIN HILLS, AZ 85268 OR E-MAIL AT MSVIVA@MSN.COM

RailwayAge.com

The News Destination for the Rail Industry Av a i l a b l e f o r S a l e 6 x A E M - 7 A C • • •

6 x AEM-7AC Electric L o comotives for sale Fully Operational and Ser vice Ready Av a i l a b l e f o r I m m e d i a t e I n s p e c t i o n / D e l i v e r y

For additional information and pricing, p l e a s e c o n t a c t : Ya s u h i r o K a z a m a mail : nycmm@dg.mitsui.com, phone : 212-878-4327 Mitsui & C o. (USA), Inc., NY 38 Railway Age December 2016

Turning Opportunities into New Business

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RECRUITMENT

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EMPLOYMENT Yangtze Railroad Materials headquartered in Baltimore, MD is hiring for Marketing Manager and Sales Representative, preferably for professionals with 5 year+ Marketing/Sales Experience in the Railroad Industry. If you are interested, please e-mail your resume to info@yangtzeproducts.com.

products & services PUBLIC NOTICES

The Oldest & Largest Manufacturer of Railroad Graphics. Wanted:

The Reading and Northern Railroad is looking to purchase 200-250 miles of 45G tax credits. Please contact Andrea Coller at acoller@readingnorthern.com or 610-562-2100.

MARKETPLACE SALES The celebration with and Reidler continues. Mention this ad to receive 10% off your railroad graphics order; includes consolidated stencils, tank qualifications, & Chemtrec markings. (FRA delineators excluded) 264 Industrial Park Rd. PO Box 8 St. Clair, PA 17970 Fax 1-888-826-0108 www.reidlerrailgraphics.com Email: csweigert@reidlerdecal.com

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ALL MAJOR CREDIT CARDS ACCEPTED

December 2016 Railway Age 39

Financial edge DAVID NAHASS

Railcars for all your energy needs

t the Railway Age “Energy by Rail” (EBR) conference, attendees were given a “What’s next?” point of view on the future of the transportation of coal, crude, LNG and other midstream products by rail, spearheaded by Matt Rose. As a part of the EBR conference, I was privileged to moderate a discussion regarding the future of railcars carrying energy products. My panel members were Donald Crouteau, Vertex Rail; Patrick Mazzanti, Railroad Appraisal Associates; Robert Pickel, National Steel Car; and James Rader, The Greenbrier Companies. The current state of the new railcar market is well documented and it was a pleasure to have three manufacturers available to answer questions at one time. Croteau answered a question that is on everyone’s mind, notably: How do you expect to compete and gain market share in a declining market? His response? Vertex is not afraid of a cyclical market, and our primary investor (CRRC) is a global company that manufactures more than 100,000 railcars per year worldwide. He emphasized the long-term commitment being made by Vertex. When asked about the current state of the manufacturing market for cars in energy service, all three builders were honest about the current weak state of the market. Expectations for 2017’s car build ranged around 40,000 units, but heads nodded when Mazzanti indicated that the 2017 build year was likely to be approximately 30,000 units. The builders indicated that, of the primary energy related commodities, frac sand (proppant) was most likely to recover, and that the fate of crude by rail (CBR) was primarily going to be tied to moves to, as Pickel noted, California (where there is little pipeline capacity) and to whatever offtake product pipelines are

Railway Age

December 2016

unable to move. When will the downturn reverse? Not before 2019 was the general consensus. The manufacturers acknowledged that the expected retrofit boom for tank cars has not materialized, with Rader noting that capacity put in place to retrofit non-compliant tank cars has not delivered a return on investment. All parties on the panel echoed the potential for a spike in demand for regulation-compliant tank cars and by association retrofit tank cars as the rail industry approaches the 2021 date by

Of the primary energy related commodities, frac sand is considered most likely to recover. which all tank cars for crude must meet the new guidelines (DOT 111 legacy cars are already being phased out of service in the U.S. and especially in Canada). In addressing questions about the price of a railcar today vs. the price at the peak of the cyclical railcar boom (roughly late 2014), the manufacturers gently addressed the concept of a free market. As one would expect, the manufacturers are not interested in adopting the role of industry policeman, telling customers not to place orders for fear of creating a glut of unnecessary railcars and curtailing price. Appropriately so, there were no apologies given for the prices paid in the heat of the market. The panel was asked what railcar

types might step up to replace demand for coal cars, and as a follow-up, whether the loss of coal car manufacturing should reset expectations for the number of railcars to be built annually. On the first question, the panelists named a scattershot of car types (eg., flatcars and aggregate cars) and replacement demand (especially grain covered hoppers) that could provide some offset to coal car manufacturing. Surprisingly, the builders did not particularly feel that a theoretical annual average railcar total of 40,000 cars was likely to move much, even with the loss of coal car orders. In answer to the question of what would drive demand for new railcars in the current economic environment, the answers were in line with expectations: higher energy prices (especially crude oil), an increase in loadings, a decrease in system velocity and companies accelerating replacement of older railcars (acknowledging low scrap prices are hindering the replacement cycle). When asked about consolidation of railcar builders as the industry continues to move through this cyclical downturn, panelists did not take a position on its potential. The panelists noted that capacity in railcar manufacturing could be increased and decreased. As a result, consolidating manufacturing capacity through merger or acquisition would not provide an incremental benefit. There was some suggestion that the economic downturn may stress some builders, but overall from the panelists there was no indication of a need or a forecasting of plans for consolidation. A wide-ranging, open and honest discussion on the state of railcar manufacturing: Look for a repeat at Energy by Rail 2017. Got questions? Set them free at dnahass@railfin.com.

Weâ&#x20AC;&#x2122;re current, are you? FRA Regulations Mechanical Department Regulations

FRA News:

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

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.

$28.95

Mech. Dept. Regs.

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Order 25 or more and pay only $26.00 each

FRA Part #

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

Update effective

8-1-16 7-20-09 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16

BKHORN 222 8-1-16 BKRFRS 224 8-1-16 BKHS BKLSS BKSLI BKSAS BKBRIDGE BKLER

228 229 230 231 237 240

8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16

BKCONDC 242 8-1-16

BKBSS

BKCAD BKSTC

BKPSS

232 8-1-16

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40 219 233 234 235 236 238 239

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28.50 10.50 9.50 9.95 7.65 9.95

9.45 8.55 8.95 6.90 8.95

RR Communications Rear End Marking Device, Passenger, Commuter & Freight Trains Use of Locomotive Horns Reflectorization of Rail Freight Rolling Stock Hours of Service Locomotive Safety Standards Steam Locomotive Inspection RR Safety Appliance Standards Bridge Safety Standards Qualification and Certification of Locomotive Conductor Certification

5.95 5.50

5.35 4.95

13.75

12.40

6.95 11.00 11.50 23.95 9.95 6.95 13.25

6.25

8.95 6.25 11.90

11.50

10.35

Each

25 or more

15.25

13.70

Each

25 or more

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.

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Part 220: Railroad Communications 49 CFR 220. Prescribes minimum requirements governing the use of wireless communications in connection with railroad operations. 23 pages. Softcover.

10.35

Combined FRA Regulations

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Drug and Alcohol Regulations in the Workplace

37.00

8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16

Signal and Train Control Systems

20.50

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Track and Rail and Infrastructure Integrity Compliance Manual - Volume II, Track Safety Standards - Part 213 Technical Manual for Signal and Train Control Rules. - Includes Part 233, 234, 235, 236

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Updates from the Federal Register may be supplied in supplement form.

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Part 228: Hours of Service of Railroad Employees 49 CFR 228 for records and reporting of hours of duty of a railroad employee. Also covers the construction of employee sleeping quarters and health requirements for camp cars. 40 pages. Spiral bound.

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Hours of Service of RR Employees

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

Compliance Manuals BKINFRA

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Brake System Safety Standards

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.

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Current FRA Regulations Item Code

Part 240â&#x20AC;&#x201C;Qualification and Certification of Locomotive Engineers

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MEET ORX’S HOTTEST GIRL & COOLEST GUY. Melissa - 37.6° C Managing all 2,368 ORX gages and their calibration certification records is no sweat for Melissa. No matter what we throw her way, Melissa sizzles at her job. Jeff - 36.0° C As ORX’s Technical Support Supervisor, Jeff is always in the hot seat. But as you can see, his calm disposition shines through while making the impossible, possible. Jeff is one cool cat.