November 2013 Railway Age Magazine by Railway Age

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capital-intensive, customer-driven railway interchange 2013 retrospect more passenger trains on freight railroads?

RailwayAge

NOVEMBER 2013

visit us at www.railwayage.com Features CN: Capital-intensive, customer-driven

Railway interchange 2013 retrospect

More passenger trains on freight railroads?

Departments 4

industry Outlook

Market

People

100 years ago

Meetings

Products

advertising index

Classified

22 SPECIAL ADVERTISING SECTION

industry indicators

News/Columns

OvercOming m/W challenges Successful Case Studies

watching washington

Update

Financial edge

On the COver CN SD60s lead an empty coal train into Farmersville, ill., for loading at Crown Mine iii.

29 Shutterstock/Franz Pfluegl

From the editor

maintenance is critical for the safe operations of freight and passenger railroads and comes with its fair share of challenges big and small. Within these pages, suppliers share stories of challenges seen along the railroad and how their expertise, products and services helped achieve success while maintaining the right-of-way.

advertorial

Photo: Kevin Sies 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. 214, No. 11. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print or Digital only versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Foreign $239.00 (U.S. funds) per year/$397.00 for two years for Air mail delivery. When ordering Both Print and Digital: $150.00 per year/$227.00 for two years in the U.S., Canada, and Mexico; $208.00 per year/$296.00 for two years, foreign. Foreign $308.00 (U.S. funds) per year/$496.00 for two years for Air mail delivery. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHTÂŠ 2013 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 Intâ&#x20AC;&#x2122;l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 1172, Skokie, IL 60076-8172, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 00338826.

November 2013 Railway age 1

RailwayAge

From the Editor William C. Vantuono

“Transportation and the Cold War”

ifty years ago this month (Nov. 22, 1963), President John F. Kennedy was assassinated in Dallas. While most of us associate JFK with things like laying the groundwork for the Apollo moon missions, championing civil rights, the Cuban Missile Crisis, or the Bay of Pigs fiasco, he did attempt to introduce legislation that would ultimately benefit the nation’s transportation system, including the railroads, which at the time were burdened with excessive regulation, outdated work rules, subsidized competition, and other problems. Let’s take a look at the climate of 50 years ago, following JFK’s untimely death. Here’s what Railway Age had to say in a Dec. 2, 1963 editorial: “President Kennedy was committed to the transportation legislation he recommended to the Congress. As our Washington Editor Walter Taft points out, when the Kennedy transportation bills died with the expiration of the 87th Congress, the President had them reintroduced in the current Congress—and they are before that body now, very much alive. It would be disastrous for the country if this program were allowed to languish. “The chaotic conditions in transportation—and their adverse impact on the railroads in particular—have long been widely recognized . . . Kennedy put several of his ablest advisors to work on the problem and at length this action of his culminated in the Presidential message on transportation of April 5, 1963. The message stands out as the most comprehensive (and comprehending) state paper on transportation policy in our history. ‘Less federal regulation and subsidization,’ Kennedy concluded, ‘is in the long run a prime prerequisite of a healthy intercity transportation network.’ And in due course after making these general (and highly appropriate) observations, he came along

with the specific legislative proposals to give effect to his recommendations . . . “Most important, the Kennedy proposals would diminish the arbitrary and one-sided advantages (as to subsidies and freedom from regulation) that are now enjoyed exclusively by patrons of highway, waterway, and (to some degree) air transport, and not by patrons of railroad service. “Transportation and the ‘Cold War’: Our country is in a life-and-death contest in productive efficiency with totalitarian and communistic countries. The total cost of transportation is an integral part of the total cost of industrial production. Thus it is that, if the United States continues to encourage waste of scarce resources by inefficient transportation, we are risking losing the international contest in productive efficiency. “The late John F. Kennedy was the first President who fully realized the serious and growing implications of the country’s careless management of the government side of its transportation setup. He was the first President to go into this rather complex situation in sufficient depth to understand adequately the causes of the malady and the remedial measures needed to restore healthy conditions. “We are confident that our new President [Lyndon B. Johnson] has the perception and the patriotism to realize that the Kennedy Administration’s program for transportation is one of the greatest legacies John F. Kennedy has left to his successor and to the American people. We believe he will find that his entourage and leaders in Congress are also fully aware of these things. So let’s all get going to help them complete the legislative job so well started—bearing in mind that a healthy transportation system is not a partisan issue.”

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 DOUGLAS JOHN BOWEN, Managing Editor dbowen@sbpub.com LUTHER S. MILLER, Senior Consulting Editor lmiller@sbpub.com CONTRIBUTING EDITORS: Alex Binkley, Roy H. Blanchard, Lawrence H Kaufman, Bruce E. Kelly, Anthony D. Kruglinski, Ron Lindsey, Ryan McWilliams, Jason H. Seidl, Frank N. Wilner Creative Director: Wendy Williams Art Director: Sarah Vogwill Corporate Production Director: Mary Conyers Production Manager: Jessica Cajas Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Jane Poterala Circulation Director: Maureen Cooney WEstErn officEs 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Jennifer Nunez jnunez@sbpub.com George Sokulski, Associate Publisher Emeritus gsokulski@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, Keith Barrow, Kevin Smith customEr sErvicE: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 curt.ciesinski@parsintl.com

Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, Railway Age,PO Box 1172, Skokie, IL 60076-8172, or call toll free 1-800-895-4389. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of SimmonsBoardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:

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SIMMONS-BOARDMAN PUBLISHING CORPORATION

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Industry Indicators SHORT LINE AND REGIONAL TRAFFIC INDEX

TRAFFIC ORIGINATED

FOUR WEEKS ENDING SEPTEMBER 28, 2013

CARLOADS

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 Waste & Nonferrous Scrap All Other Carloads TOTAL U.S. CARLOADS

SEPT. ’13 67,904 3,446 33,595 25,577 116,823 51,148 465,671 6,319 13,377 24,434 30,696 14,234 42,068 16,590 67,895 90,548 21,717 33,530 14,740 17,145 1,159,784

SEPT. ’12 76,531 3,889 35,020 27,265 117,136 46,323 478,565 5,964 12,182 23,573 27,249 13,505 42,152 18,402 63,051 82,295 20,108 31,013 11,801 17,423 1,152,189

% CHANGE -11.3% -11.4% -4.1% -6.2% 0.3% 10.4% -2.7% 6.0% 9.8% 3.7% 12.7% 12.8% -0.2% -9.8% 7.7% 10.0% 8.0% 8.1% 24.9% -1.6% 0.7%

335,562

321,395

4.4%

1,495,346

1,473,584

1.5%

CANADIAN RAILROADS ALL COmmODITIES

COmBINED U.S./CANADA RR

FOUR WEEKS ENDING SEPTEMBER 28 2013

INTERMODAL

mAJOR U.S. RAILROADS BY COmmODITY TRAILERS CONTAINERS TOTAL UNITS

SEPT. ’13 119,319 908,203 1,027,522

SEPT. ’12 116,063 868,404 984,467

% CHANGE 2.8% 4.6% 4.4%

6,759 219,965 226,724

6,169 212,030 218,199

9.6% 3.7% 3.9%

126,078 1,128,168 1,254,246

122,232 1,080,434 1,202,666

3.1% 4.4% 4.3%

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

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)

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November 2013

CARLOADS

BY COmmODITY 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

ORIGINATED SEPT. ’13 42,154 21,284 29,258 11,510 20,580 6,628 9,710 4,606 21,994 10,637 2,106 2,113 20,108 12,602 44,290 10,820 85,500

ORIGINATED SEPT. ’12 43,464 21,437 23,966 11,828 20,506 6,754 8,887 3,987 21,079 10,418 1,490 2,107 17,757 12,285 41,909 10,697 88,449

% CHANGE -3.0% -0.7% 22.1% -8.3% 0.4% -1.9% 9.3% 15.5% 4.3% 2.1% 41.3% 0.3% 14.5% 2.6% 5.7% 1.1% -3.3%

TOTAL CARLOADS, SEPTEmBER 2013 VS. 2012 SEPTEmBER 2013 - 355,900 SEPTEmBER 2012 - 346,820 310,000 320,000 330,000 340,000 350,000

360,000 370,000 380,000 390,000 400,000

"The commodity with the largest year-over-year carload decline in September 2013 was coal, which saw carloads fall 12,894 (2.7%) from September 2012 . . . Excluding coal, U.S. carloads were up 3.0% (20,489 carloads) in September 2013 over September 2012, their largest yearover-year increase so far in 2013." —Association of American Railroads

Raise your Expectations

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Industry Outlook Amtrak ridership maintains growth

NS, UP revenue-adequate for 2012 The U.S. Surface Transportation Board on Oct. 17, 2013 released its findings on U.S. Class i railroad revenue adequacy for 2012, and found that only two carriers—Norfolk Southern and Union Pacific—qualify as revenue-adequate. STB’s determination of revenue adequacy (Docket Number eP_552_17) is based on its calculation of the average cost of capital to the freight rail industry, compared to an individual carrier’s rate of return on net investment (ROi). The STB’s average cost of capital to the freight rail industry for 2012 is 11.12%. Norfolk Southern (11.48%) and Union Pacific (14.69%) are revenue-adequate. The other carriers’ 2012 ROis are as follows: CSX, 10.81%; grand Trunk (CN), 10.19%; Kansas City Southern, 9.54%; SOO (Canadian Pacific), 5.15%. BNSF was listed as “to be determined.” STB said it has not calculated BNSF’s 2012 revenue adequacy in this decision, because BNSF was due to refile its R-1 reports for 2010, 2011, and 2012 by Oct. 23, 2013, in compliance with STB’s order in western Coal Traffic league: Petition for Declaratory Order, FD 35506 (STB served July 25, 2013). Following receipt and verification of BNSF’s revised R-1 reports, STB will reissue BNSF’s 2010 and 2011 revenue adequacy calculations, and will issue its 2012 calculation.

Freight car orders dip in third quarter

The Railway Supply institute american Railway Car institute (aRCi) Committee last month released its railcar industry order, delivery, and backlog statistics for the third quarter, with tank cars and covered hopper cars continuing to account for most activity. industry-wide orders totaled 12,753, 6

Railway age

November 2013

down almost 16% from 15,151 in the third quarter of 2012 and also down 14% from 14,850 cars ordered in the second quarter of this year. Deliveries of 12,647 cars were up 2.4% from 12,346 cars a year ago, and also up just 1% from 12,511 cars delivered in the second quarter of 2012. The third-quarter backlog of 73,848 cars was up just marginally from the backlog of 73,706 cars at the end of the second quarter, but still up 22.6% from the 60,244-car backlog at the end of 2012, according to aRCi statistics. Tank car orders of 5,149 were a step down from the record 19,267 of 1Q13 and below the 1Q11-2Q13 average of 9,500. There is still an estimated twoyear tank car delivery backlog.

amtrak carried a record 31.6 million passengers in Fiscal year 2013—its tenth ridership record in 11 years. During Fy13, amtrak’s statesupported corridor services grew to a new record of 15.4 million passengers. in addition, all long distance routes combined had the best ridership in 20 years, with 4.8 million passengers. Ridership for all Northeast Corridor services reached 11.4 million passengers, the second-best year ever; Northeast Regional service set a new record. Fy 2013 produced eight individual monthly ridership records, the single best month in amtrak history, and new records on 20 routes. in addition, ticket revenue increased to a record $2.1 billion. On Oct. 15, amtrak, reached agreement with the 19 states with corridor services for them to provide 100% of the operating subsidy to keep 28 intrastate passenger trains (outside the Northeast Corridor) operating on routes of 750 miles or fewer. Section 209 of the 2008 Passenger Rail investment and improvement act (PRiia) provided that by Oct. 31, 2013, states must pay 100% of the operating subsidy for those corridor passenger trains. States may still apply for federal funding to cover up to 85% of capital cost improvements to those routes. Under Section 209, state partners will pay for approximately 85% of operating costs that are attributed to their routes, as well as for capital maintenance costs of the amtrak equipment they use and for support costs such as safety programs and marketing. amtrak will pay about 15% for “backbone” costs such as centralized dispatching and services, and back shops. States will continue to benefit from amtrak’s incremental cost access rights to tracks owned by host railroads, dispatching priority, and amtrak capital investments that support its entire system.

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Market

Metrolinx taps Wabtec for Tier 4 locomotives wabtec Corp.’s MotivePower industries subsidiary has signed a US$63 million contract with Canada’s Metrolinx to build 10 new low-emission locomotives featuring new diesel engines that meet ePa Tier 4 emission standards, for gO Transit regional rail service. They will be designed and manufactured by MPi at its Boise, idaho, facility and are expected to be delivered beginning in 2016. The project follows a previous order from Metrolinx to repower 11 locomotives (such as pictured above) with the same advanced configuration. The locomotives will be powered by twin engines that meet Tier 4 standards. The twin-engine configuration provides for both redundancy of major systems and flexibility of operation during off-peak periods, where running just one of the two engines can provide significant fuel savings on shorter trains. The locomotives also will include MPi’s Central Diagnostic System, which provides remote diagnostic and health monitoring capabilities so that Metrolinx can proactively identify maintenance and operational needs.

CALIFORNIA HIGH-SPEED RAIL AUTHORITY: invited contractors to qualify to bid for the second construction phase of the initial Operating Section (iOS) Stage 1. Construction package 2-3, worth between $1.5 billion and $2 billion, is a design-build contract covering civil works on a 60-mile stretch of right-ofway from Fresno south to the border between Tulare and Kern counties near Bakersfield, Calif. DETROIT: awarded a contract to Parsons Brinckerhoff for design, review, and construction quality assurance services for the 3.2-mile M1 Rail Project along woodward avenue. Parsons Brinckerhoff will represent the city in guaranteeing quality assurance during construction. 8

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November 2013

KANSAS CITY: awarded CaF USa, inc. a $22 million contract for five streetcars to cover service on its initial 2.2-mile streetcar line downtown. CaF USa, a subsidiary of Spain’s Construcciones y auxiliar de Ferrocarriles S.a., will assemble the vehicles at its plant in elmira, N.y. LONG ISLAND RAIL ROAD: issued a Request for expressions of interest (RFei) for diesel locomotives and trailer passenger cars, in an effort to bolster service on one branch in Nassau County and a second mostly in Suffolk County, N.y., “via a lease agreement.” TRANSIT WIRELESS: awarded a contract to Radio Frequency Systems (RFS) to supply the architecture for Phase 2 of the extensive project to bring wi-Fi to the New york City subway system.

Worldwide NETWORK RAIL: Signed contracts with three steel manufacturers to supply rails for five years, with an option for a five-year extension, including Tata Steel, arcelorMittal, and Voestalpine. SNCF (FRANCE): Ordered 34 alstom Coradia liner long-haul trainsets, worth an estimated $474 million, as part of a project to renew Corail intercity trains used throughout the nation. VIRGIN TRAINS: awarded alstom a contract worth around $16.5 million to upgrade its entire fleet of 56 class 390 Pendolino tilting electric multiple units (eMUs), which are used on the west Coast Main line linking london, the west Midlands, Manchester, and glasgow, Scotland.

Steve Host

North America

Watching Washington Frank n. wilner

NMB’s low profile propagates labor/management peace

television commercial for Dos Equis beer features “the most interesting man in the world,” who is said to have parallel parked a train, and whose two cents is worth $37 and change. By contrast, the National Mediation Board (NMB), which administers the Railway Labor Act (RLA), is scarcely known, and its members and staff would never attempt even to grip a locomotive throttle. But the NMB’s two cents worth as a mediator in labor/management negotiations, and in administering arbitration in grievance proceedings, is modestly valued in the millions of dollars. It isn’t happenstance that for more than two decades there has not been a national railroad strike of more than 24 hours. Such labor/management peace has prevented abundant dollar losses to American industry, to railroads, and to rail workers. Equally important has been the NMB’s whittling down of worker grievances, producing a profound positive impact on employee morale and productivity. In 2002, grievances festered for up to 10 years; while today, almost all the backlog has been cleared, and most newly filed grievances are decided within 90 days. Given that railroads are the most unionized industry in America—with more than 90% of employees represented by a labor union, vs. less than 7% for the domestic private-sector work force—the performance of the NMB in administering the RLA is a point of light unprecedented in American labor/management relations. The 1926 RLA ended decades of violent labor/management clashes and economic chaos. It later was extended to airline workers, and in 1935 became a partial template for the National Labor Relations Act (NLRA), which

regulates labor/management relations in other industries. Indeed, NMB administration of the RLA in recent years—especially the constructive outcome of its mediation and grievance-arbitration efforts—makes a strong argument for bringing other industries under the RLA’s orbit. Significant under the RLA is that labor agreements never expire, but remain in force during the pendency of negotiations, preventing the “no contract, no work” trap of the NLRA that allows contracts to expire. While a work stoppage or lockout can occur when railroads and their unions remain deadlocked, effective NMB intervention has, for three decades, consistently resulted in peaceful resolution of contract negotiations.

Interest-based bargaining works far better than a helter-skelter, table-thumping tragicomedy. Effective in generating this labor/ management peace was the NMB’s introduction of interest-based bargaining. Rather than each side having a jolly rotten time thumping on the table with an endless inventory of demands, interest-based bargaining, superintended by NMB mediators, has each side engaging in joint problem solving whereby labor and management negotiators collaborate to understand the needs of the other. Under the old helter-skelter tragicomedy designed to intimidate the

other side, exertions to reduce antiquated crew size rules and introduce new technologies such as end-of-train devices led to work stoppages and third-party determinations through White House appointed Presidential Emergency Boards (PEBs) and Congressional action, leaving both sides frustrated with the result. More recent thorny issues, such as introduction of remote control for yard operations and cost-sharing of steeply rising healthcare insurance costs, were resolved peacefully using NMB-guided interest-based bargaining. Equally effective has been the NMB’s recent rocket-docket resolution of grievances, such as disputes over contract interpretation and employee discipline. The foundation has been the recruitment of highly qualified arbitrators, a mentoring program to ensure that arbitrators understand workplace complexities, and creation by the NMB of its Knowledge Store, a searchable on-line database that makes instantly available to parties and arbitrators historical precedent—more than 40,000 past arbitration awards, labor contracts, and PEB decisions. The NMB also now hosts hands-on mock-case workshops for union and carrier labor officers and arbitrators. Also crucial to rapid resolution of grievances—averaging 6,000 annually—is the tying of arbitrator compensation to cases resolved rather than a daily pay rate, which encourages arbitrators to hear numerous cases at a single sitting, often bringing the parties together via cost-saving video conferencing. It is said a leader is most effective when people barely know he or she exists. The NMB’s low-profile dynamism at perpetuating railroad labor/ management peace is testament to that maxim. November 2013 Railway age 9

Update Supply BriefS locomotive backlog cited in Ge third-quarter earnings

Third-quarter earnings meet—or beat—Wall Street

a strong backlog of manufactured goods orders, including locomotives and jet engines, helped drive third-quarter earnings for Fairfield, Conn.-based general electric Co. erie, Pa.-based subsidiary ge Transportation logged third-quarter revenue of $1.4 billion, virtually identical to its revenue in the third quarter of 2012. But ge Transportation’s profit rose 15% to $306 million compared with a year ago. Parent ge’s net income for the quarter actually dropped to $3.19 billion, or 31 cents a share, from $3.49 billion, or 33 cents per share, in the third quarter of 2012.

lilee Systems and alstom have introduced a new, jointly developed communications management technology consisting of communications manager units (CMUs), including an onboard Mobile Communications Manager (MCM), wayside Base Radio Communications Manager (BRCM) and Base Communications Manager (BCM) equipment, and an Office Communications Manager (OCM) at network control centers or remote offices. These units relay information from PTC-equipped trains back to central operations centers and allow system operators to enforce speed limits and signals. “These new communication manager units were specifically designed to operate seamlessly with alstom’s aCSeS PTC system, which is currently operating along the Northeast Corridor,” says alstom Director of PTC Operations Steve Zwart. The companies displayed the technology at Railway interchange 2013. 10

Railway age November 2013

eport after report of healthy Class I third-quarter earnings last month reinforced the increasingly acceptable notion that there is railroad profitability beyond coal. For most, increased traffic in petroleum products and intermodal were big reasons why. CSX Corp. on Oct. 15 reported third-quarter net earnings of $463 million, or 46 cents per share, up from $455 million, or 44 cents per share, in the third quarter of 2012. Revenue of $3 billion exceeded Wall Street expectations of $2.95 billion. CSX’s operating ratio for the quarter was 71.5%. “CSX posted historically high financial results as it continued to effectively manage ongoing challenges in the coal market and leverage growth opportunities in merchandise and intermodal,”

said Michael J. Ward, chairman, president and chief executive officer. “The third-quarter performance is an ongoing reflection of the company’s ability to capitalize on the modest improvement in the economy with a relentless focus on customer service and asset efficiency.” On Oct. 17, Union Pacific Corp. reported third-quarter net income of $1.15 billion, or $2.48 per share, up 10% from $1 billion, or $2.19 per share, in the third quarter of 2012. Revenue rose 4% to $5.6 million from $5.34 billion in last year’s third quarter, and in line with forecasts by Wall Street analysts, despite UP warning Wall Street earlier this month that a decline in coal volume would force revenue and earnings lower than anticipated by investors. Said UP CEO Jack Koraleski, “Despite the challenges

Photo courtesy of GE TRANSPORTAION

lilee Systems, Alstom offer joint pTC comm system

of lower coal and grain volumes, in addition to disruptions caused by the Colorado flooding, we managed our network efficiently and continued to benefit from the strength of our diverse franchise.” Kansas City Southern on Oct. 18 reported third-quarter net income of $119 million, or $1.07 per diluted share, up from $91 million, or 82 cents per diluted share, a year ago, with the increase driven by record third-quarter revenue of $622 million, up 8% from a year ago, with carloads up 3%. KCS’s operating ratio was 67.8%, a 0.9 point improvement from the third quarter of 2012, KCS said, adding revenue growth was spearheaded by a 17% increase in intermodal moves. CN, like KCS, also notched quarterly record revenue, reporting on Oct. 22 an 8% rise to C$2.7 billion, driven by an increase in revenue ton-miles and a Railway Age Ad 8.2013 Full Page_Layout 3% increase in carloadings. CN net 1

income of C$705 million (US$685 million), or C$1.67 (US$1.62) per diluted share, was up about 6% from C$664 million, or C$1.52 per diluted share, in the same quarter of 2012. CN said its operating ratio for the quarter was 59.8%, an improvement of 0.8 points. CN rival Canadian Pacific on Oct. 23 reported not just record third-quarter revenue, but also record quarterly net income of C$324 million (US$312.5 million), or C$1.84 (US$1.77) per diluted share. CP’s quarterly revenue of C$1.5 billion was 6% above revenue in the same quarter a year ago. CP also touted its operating ratio of 65.9%, an improvement of 820 basis points, calling it the “lowest operating ratio in company history.” “By all standards, this was an outstanding quarter,” said CEO E. Hunter Harrison. “What we have 8/27/13 8:07 AMquarter Page 1 is the ability to proven this

drive earnings growth and lower our operating ratio, even in a softer volume environment.” Norfolk Southern, also reporting results on Oct. 23, said third-quarter net income of 482 million was up 20% from the $402 million reported in the third quarter of 2012. Revenue rose 5% to $2.8 billion, aided by a 4% rise in shipment volume. NS noted its operating ratio for the quarter was 69.9%, an improvement of 3 percentage points. Said NS CEO Wick Moorman, “Even in the face of continuing weakness in the coal markets, our focus on service efficiency and velocity allowed us to provide superior performance for our customers and excellent results for our shareholders.” NS intermodal revenue of $605 million, up 7% compared with a year ago, helped offset the railroad’s anticipated decline in coal revenue, down 9% from a year ago.

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Update Indiana Rail Road dedicates new intermodal terminal Indiana Rail Road Co. (INRD) President and Chief Executive Officer Tom Hoback and Indiana Governor Mike Pence opened the new Senate Avenue Intermodal Terminal in Indianapolis on Oct. 10, 2013. The facility represents a multimillion-dollar investment by INRD

and CN built to serve Indiana shippers moving goods to and from Asia. Indianapolis-based INRD and CN announced a partnership in January to inaugurate all-rail service for transPacific containerized freight from the Canadian ports of Vancouver and Prince

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Rupert, B.C., to Indianapolis, bypassing the congested Chicago terminal area. The Port of Prince Rupert and Port of Vancouver offer service from major Asian ports across the Pacific Rim, from Vietnam, Japan, South Korea and China; service from Shanghai to Prince Rupert and Vancouver is shorter than other West Coast options, based on first-port-of-call service. CN and INRD have marketed to Indiana importers a total transit time goal of as little as 20 days from Asia to Indianapolis, once portside volumebased efficiencies reach critical mass. On the morning of Oct. 10, hours before the Senate Avenue grand-opening celebration, INRD delivered a trainload of containerized imports to the Indianapolis terminal with a total transit time of just 20 days from Shanghai, without portside efficiencies yet in play. “While this is a very exciting day for CN and the Indiana Rail Road, it’s a landmark moment for the Indiana business community, and not just importers and exporters,” said Hoback. “Having an intermodal facility near the heart of Indianapolis is an excellent economic development tool for the city and state, which translates to job growth. INRD and CN do business with an entrepreneurial, customer-first spirit top of mind. To the Indiana logistics community, which has supported us throughout the development of this new product, we say ‘thank you,’ and pledge fast, reliable service moving forward.” “CN is pleased to be part of this supply chain story with INRD,” said CN Executive Vice President and Chief Marketing Officer Jean-Jacques Rues. “CN’s objective is to be a true supply chain enabler through its agenda of Operational and Service Excellence. This helps our customers compete more effectively in their own markets in North America or abroad.” Said Gov. Pence, “Indiana Rail Road and CN have taken it upon themselves to further elevate the Indiana brand in the eyes of global manufacturers, retailers, and logistics companies.”

FRA’s Szabo accepts Graham Claytor Award Federal Railroad Administrator Joseph C. Szabo accepted Railway Age’s W. Graham Claytor Award for Distinguished Service to Passenger Transportation at the 20th Annual Passenger Trains on Freight Railroads Conference in Washington, D.C., on Oct. 16, 2013. Szabo is a fifth-generation railroader who for many years worked commuter and freight trains in the greater Chicago area. Between 2006 and 2009, was Vice President of the Illinois AFL-CIO. He has served as mayor of Riverdale, Ill., a member of the South Suburban Mayors Transportation Committee, and Vice Chairman of the Chicago Area Transportation Study’s Executive Committee. In 2002, he chaired the Governor’s Freight Rail Sub-

Committee and, in 2005, was assigned by the United Transportation Union International to the FRA’s Railroad Safety Advisory Committee (RSAC), where he participated in the development of rail safety regulations. Szabo has served on the Executive Council of Chicago Metropolis 2020, focusing on Land Use Planning and Transportation issues, and was a member of the Chicagoland Metropolitan Planning Council. He holds a baccalaureate degree in Labor Relations from Governors State University and is the recipient of an honorary doctorate from Lewis University for his lifetime commitment to public service. Nominated March 20, 2009, and confirmed by the U.S. Senate on April 29, 2009, Joe Szabo is the twelfth FRA Administrator and the first to come from the ranks of rail workers. He leads a staff of more than 900 professionals located in Washington D.C. and

Left to right: Simmons-Boardman Rail Group Publisher Jonathan Chalon, FRA Administrator Joe Szabo, and Railway Age Editor-in-Chief William C. Vantuono.

at field offices across the U.S. who develop and enforce safety regulations; manage financial assistance programs; and oversee research and technology development programs. (A report on the conference appears on p. 32.)

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OvercOming m/W challenges Successful Case Studies

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Quality cuts cOst: Easy, simple, clever – GRM-3000 Switch/Production Tamping Machine The versatile roller lifting clamps are used for correction of the geometry when tamping the track. When working switches, the GRM-3000 additionally uses two lifting hooks, allowing the rail to be gripped at the head or base.

At the internAtionAl trAde show Railway Interchange 2013 in Indianapolis, Ind., Plasser American presented a new machine design under the motto: easy, simple, clever. The compact and newly developed GRM-3000 universal tamping machine attracted great interest among the trade visitors. Special attention was given to maintenance and operation of the machine, as well as the compact design. The latest generation of the GRM-3000 offers a number of advantages. Engineers improved the mechanics, hydraulics and control system with the goal of creating a compact, versatile machine. Priority was placed on Plasser’s proven technology, while maintaining quality. The Plasser tamping quality with an output of up to 22 ties per minute is a major argument in favor of the GRM-3000. The split-head tamping unit design also provides the ability to work in switches. Technical soluTion The removable front frame extension reduces the machine length to 42 feet and the total weight of the machine by 2,000 lbs., allowing simplified machine transport on a lowboy trailer. The machine is equipped with two hydrostatically driven axles. The proven Plasser tamping units assure high quality tamping, working according to the non-synchronous constant pressure tamping principle. Every tool arm is controlled individually until the required pressure is reached, ensuring proper ballast consolidation.

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safeTy The proven three-point chord measuring system is the best and most reliable solution under tough worksite conditions. The integrated AGGS controls track geometry corrections. Irregular tie spacing is no challenge for the GRM-3000. The ATLAS Automated Tie Locating Analyzing System scans the tie spacing while working and transmits this information to the tamping unit control system, allowing fully automatic operation on concrete and wood tie track. ergonomic design All operating controls are positioned within comfortable reach directly on the ergonomically designed operator’s seat, with an ideal view of the working area. The new Plus-1 CANBUS control system sets standards in user friendliness. Two touch screens are used to retrieve all machine parameters for work, travel, diagnostics, maintenance and calibration, as well as to operate the measuring systems. The new setup of the hydraulic system ensures ease of maintenance. The hydraulic pumps for work and drive mode are identical, which makes servicing work easier. Pressure build-up of the pumps is only on demand, resulting in less wear. references During the past 50 years, Plasser American has successfully placed more than 1,900 machines in service in North America. For the company, the highest priority is the continuous development of its product. This is the company’s contribution to customers’ success. Apart from production, delivery and commissioning of new machines, Plasser American offers a partnership, which is decisive for the operation of the machines throughout many years. Plasser American’s service and support will extend the lifespan of the machine and assure cost-efficient operation.

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FastPatch rePair systems: The solution for concrete repair It is the integral flexibility allied to the inherent strength of the polymer that allows for the repair to perform under the combination of constant vibration and high impact. Concrete and epoxy technologies are too hard to resist this type of combination of forces over even a short period of time. resulTs As a result of this fast return to service and long-term successful installation, CSX is now deploying FastPatch systems from Willamette Valley Company for other scale repairs, locomotive pit and embedded rail repairs around the country. The Cincinnati scale repair has been in place without any deterioration or compression for 450 days and counting. challenge Class 1 railroad CSX selected Willamette Valley Company to perform a scale repair in Cincinnati, Ohio. The challenge was to repair the damaged area under the chair without impacting the scale use. A very fast turnaround was essential to being effective because the scale operation is an income generator for the railroad industry. Of equal importance was that the repair has to last; to return and repeat the repair process would be just as expensive as having a long downtime. Previous repairs using cementitious technology underneath and around the chair had lasted a mere 90 days before a failure mode was detected. These two factors are typical of almost all concrete repair projects for railroads, they need to get back to service fast and they need to last. There is always a need for speed without compromising safety in the world of concrete repair in the railroad industry. soluTion The preparation work for using Willamette Valley Companyâ&#x20AC;&#x2122;s FastPatch repair systems is the same as any other technology and includes the removal of deteriorated concrete and concrete repair material, cleaning the area to be prepared and drying the concrete if necessary. The area is then primed with PolyPrime, a two-component primer that allows for fast placement and enhances the bond of the FastPatch materials. FastPatch is a two-component Polyurethane that cures quickly from a liquid to a strong, yet integrally flexible repair compound. The cure takes place within 20 minutes and can be put back into full service within one hour.

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Fast tracks: Railways need accurate information on their tracks and facilities; here’s how track measuring systems are filling the need

challenge As the amount of cargo moved by rail continues to grow, railways face an increasing need for accurate measurements on track alignments and locations for engineering, construction and geographic information systems. The demand comes from tighter track tolerances, higher track speeds and new regulations for Positive Train Control (PTC), as well as maintenance and upgrades. As windows for track access for maintenance continue to shrink, railway operators must gather more information in shorter periods of time.

Railways have several approaches to gather spatial information. Many agencies utilize airborne or terrestrial LiDAR to acquire high-volume information. While LiDAR works well for general locations (including PTC), it can’t match the precision and detail produced by trained field crews collecting track data on the ground. For these ground-based surveys, advanced technology is producing significant increases in efficiency and productivity. soluTion In California, Cinquini & Passarino, Inc., (CPI) uses a Trimble GEDO CE system to provide track measuring services. The system consists of a small trolley containing tilt and gauge

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sensors, Trimble GNSS or total station for positioning, a power supply and supporting electronics. Moving at walking speed, the GEDO system collects essential data: track location, vertical profile, gauge and superelevation at specified intervals. The data is stored in a Trimble TSC3 controller. Under a contract from Parsons Transportation Group, CPI conducted a survey on 52 miles of track in central California. The work called for location of track centerline, switches and frogs, derails, roadway and pedestrian crossings, signage, wires and tunnel portals. Busy rail traffic forced the crews to work only between midnight and 4:00 a.m. using two GEDO trolley crews; CPI collected data for five to eight miles of track each night. Over the course of the survey, they collected more than 120,000 points, with each point automatically referenced to track centerline and top-of-rail elevation. CPI crews also collected information for the Sonoma Marin Area Rail Transit District. Needing precise location of existing track to design a new bridge, CPI used the Trimble GEDO trolley to meet design engineers’ request for detailed top-ofrail information, with accuracy of 1/8 inch or less at 26-foot intervals. By using the trolley system, CPI could provide data every 10 feet with no increase in cost.

resoluTion CPI’s experience has demonstrated that the Trimble GEDO system is well suited for collecting the precise information needed for design, engineering and maintenance of North American railways. Because the GEDO system can collect data with a precision of 1/16 inch or better, it can be used on track classes ranging from low-speed Class 1 up through Class 9 high-speed track for freight and passenger trains.

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November 2013 Railway age 21 2/29/12 3:48 PM

CN: Capital-iNteNsive, Customer-driveN A model of efficiency and productivity, CN is investing strategically in its network to assure a safe, fluid system, and grow its service-oriented business. By william C. VaNtuoNo, editor-in-Chief

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Forty new locomotives, like this EMD SD70ACe, and 37 second-hand units—all high-horsepower—are part of CN’s capital equipment investment strategy. CN is taking delivery on these units through year-end 2014.

safely and efficiently, at a pace faster than the overall economy and to meet our full-year 2013 financial outlook.” “We are raising our 2013 and 2014 EPS estimates to $6.23 and $7.10, from $5.99 and $6.75, respectively,” said Managing Director, Cowen and Company, and Railway Age Contributing Editor Jason Seidl. “This revision reflects better-than-expected third-quarter results and a favorable outlook. Indeed, we believe the company’s guidance might be somewhat conservative. Our price target increases from $101 to $110, as we use our new 2014 EPS estimate and a 15.5x PE (price/earnings ratio) multiple, which is modestly higher than our previous 15x multiple. We believe this is warranted based on CN’s continued ability to execute, and improving trends in most of the company’s markets. We maintain our Market Perform rating.” As of Oct. 23, CN shares were trading at around $110 on the New York Stock Exchange.

Kevin Sies

t has been 18 years since the Canadian National Railway was privatized, transforming, as President and CEO Claude Mongeau has described the company, “from what was a stodgy Crown corporation to a leader in the railway industry—objectively, one of the most profound transformations in Canadian business history.” Mongeau is a member of what one industry observer calls “CN’s Holy Trinity”: • Paul Tellier presided over the railroad’s privatization, taking it from a money-losing operation subsidized by Canadian taxpayers, and laying the foundation for its transformation into one of the most profitable railroads in North America. • Hunter Harrison brought operational discipline— “Precision Railroading”—helping transform CN from a railroad primarily focused on Canada, to a full-fledged North American carrier, a three-coast franchise stretching from Halifax on the Atlantic to Vancouver on the Pacific, and down through the American heartland, from Chicago to the Gulf Coast—touching eight Canadian provinces and 16 U.S. states. • Claude Mongeau has accelerated CN’s ability to create value for its shareholders, largely by focusing on service initiatives and expanding into new markets. In late 1995, CN’s market capitalization was C$2.2 billion; in late October 2013 it was approaching C$47 billion. Commenting on CN’s third-quarter 2013 financials, in which the company reported record revenue of C$2.7 billion and an operating ratio of 59.8%, Mongeau said that the company’s “agenda of operational and service excellence delivered outstanding financial results. All our key operating metrics improved, service levels remained solid, and we reached new levels of safety in our train operations. With continued focus on supply chain collaboration and solid execution, the CN team is determined to grow our business

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CN’s C$1.9 billion 2013 capital investment program (which represents 18% of revenue, a figure that has held steady for the past few years), is focused on port terminal unloading performance, maintaining a fluid rail operation, and sizing its hopper car fleet capacity to help keep its supply chain synchronized. The railroad’s C$100 million investment in increased rail capacity in the critical Edmonton-Winnipeg corridor is helping CN handle strong volumes of grain and other commodities through the fall and winter seasons. This investment is part of an overall program that includes: • Continuing a siding extension program in northern British Columbia and northern Ontario. • Double-tracking portions of its main line in Saskatchewan and adding new signals on the Alberta main line to expedite train movements. • Continuing improvements at Kirk Yard in Gary, Ind., and to the former Elgin, Joliet & Eastern Railway. • Increasing yard capacity and adding sidings in the Baton Rouge, La., region. CN is also investing approximately C$700 million to grow with its customers across a range of markets as it expand its business, including:

• Investments in transloading operations and distribution centers to transfer freight efficiently between rail and truck. • Construction of an intermodal terminal in Joliet, Ill. • Completion of the Calgary Logistics Park project. • Upgrading information technology systems to improve service and operating efficiency. In addition, CN is investing approximately C$200 million in acquisition of locomotives, intermodal equipment, and vehicles as well as locomotive and car refurbishments. The railroad is taking delivery of 40 new and 37 second-hand high-horsepower locomotives through the end of 2014. Illustrative of CN’s customer-growth initiatives is its investment in intermodal facilities at the Port of Halifax, which is intended to grow the Halifax gateway well beyond its current annual capacity of 417,000 TEUs (Twenty-foot Equivalent Units). Though Halifax’s current capacity is small compared to those of competing North Atlantic ports at New York/New Jersey (5.5 million TEUs) and Norfolk/Hampton Roads (2.1 million TEUs), Mongeau believes that, though “we will have to work hard to compete,” CN also has a strong suit, “a solid ecosystem of collaboration, an end-to-end view of the supply chains we serve, and access to markets with the potential to grow. Our supply chain collaboration agenda and commitment November 2013 Railway age 23

to operational and service excellence can support growth at the Port of Halifax and make the railway’s and port’s common customers more competitive in their end markets.” CN’s collaboration agreements with the Halifax Port Authority and its two container terminal operators, Halterm Container Terminal Ltd. and Cerescorp Company Ltd., “are creating faster and more reliable supply chains, demonstrating the benefits of teamwork, and generating positive responses from international shipping lines and their customers,” Mongeau said. “The agreements dating back to 2010 were the first signed by CN, which has similar ones with all of Canada’s major ports and their terminal operators. The

agreements contain clear standards and performance measurement mechanisms for our railway and its partners.” Mongeau said the Port of Halifax/ CN partnership “faces significant competitive pressures from other ports

and vessel routing options, including New York, which enjoys a large hinterland market and highly competitive sea and land distances between Asia and inland points.” Among the markets with growth

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CN says it offers competive transit times for containers originating in Asia and routed through the Suez Canal, bound for the port of Halifax.

potential is temperature-sensitive cargo. “The Port of Halifax is well equipped to handle Cool Cargo, with over 1,000 reefer plugs now, compared to 500 just a few years ago,” he noted. “This has been a major effort at the port to put Halifax in the big leagues for reefer traffic. CN has also invested significantly in new generator sets on containers, with GPS and remote-monitoring capability. With a strong partnership anchored on innovation and a commitment to continuous improvement and increased productivity, CN and Halifax can have a bright future together.” Another intermodal initiative is CN’s joint venture with Indiana Rail Road Co. (INRD) on the new Senate Avenue Intermodal Terminal in Indianapolis. The multimillion-dollar facility is designed to serve Indiana shippers moving goods to and from Asia. INRD and CN announced their partnership in January to inaugurate all-rail service for trans-Pacific containerized freight from the Canadian ports of Vancouver and Prince Rupert, B.C., to Indianapolis, bypassing the congested Chicago terminal area. The Port of Prince Rupert and Port of Vancouver offer service from major Asian ports across

the Pacific Rim. Transit time from Shanghai to Prince Rupert and Vancouver is shorter than other West Coast options, based on first-port-ofcall service. A total transit time of as little as 20 days from Asia to Indianapolis is expected. (See p. 12 for additional details.) ExpANDINg prECISIoN rAIlroADINg

Mongeau has frequently cited “the innovative spirit that has emerged at CN” over the past 18 years. “This is a spirit that continues to drive CN today,” he said. “Innovation in a railway? How can one innovate with a technology that’s more than 150 years old? How can one innovate in such a traditional line of business?” Hunter Harrison brought Precision Railroading to CN when he took over the reins in 1998, shortly after CN’s acquisition of the Illinois Central. Through train scheduling and preset trip plans for each freight car or intermodal container, Precision Railroading improved CN’s asset utilization while improving customer service, bringing more balance and fluidity to a system moving well over 200 trains and managing 100,000 freight cars every day. Under Mongeau, CN has extended the principles of Precision Railroading to its yards, shops, and maintenanceof-way practices. The railroad’s information systems are used to November 2013 Railway age 27

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produce daily “operational dashboards” that are accessible to many employees. For example, at the Port of Montreal, CN staff and terminal operators at the port receive a scorecard that shows how well each is meeting its commitments to the other. The scorecard shows if trains arrived on time, the number of containers that arrived and how many of them were moved, the number of train slots filled, and the number of containers that have been on the ground for more than 72 hours. Such performance metrics, Mongeau noted, show exactly where something needs to be addressed. “That’s the beauty of having transparent information,” he said. “If we know two or three days ahead of time that we might have an issue, we can start to do something about it now.” There are other supply chains with similar informational tools, ranging from “coal mines in Alberta to ships in Prince Rupert, and grain farmers in the Prairies to the waterfront in Vancouver,” Mongeau said. “In these cases as well,” he said, “it’s about collaboration between partners, transparency about the facts, and the normal pursuit of commercial interests. A compelling way of moving forward. An engaging approach that avoids finger-pointing when things go wrong. An effective path to solution-finding to make things go right so we can win our share of world markets.” RA

RAILWAY INTERCHANGE 2013

Upbeat, and back for more

Healthy attendance and a record number of suppliers exhibiting at RI2013 established this biennial gathering as a can’t-miss event. By Douglas JohN BoweN, Managing editor

Mischa Wanek-Libman

wo years ago, Railway Interchange 2011 sought to bring together North America’s railway supply industry organizations to better advance the industry’s aims. The initial effort succeeded handsomely, establishing a solid foundation for future events, and drawing industry interest not just from within North America but from global players as well. So successful was the 2011 event, in fact, that attendees at Railway Interchange 2013, held in Indianapolis Sept. 29-Oct. 2, could be forgiven for the “business as usual” casual professionalism permeating the event, evidenced by exhibitors, speakers, and attendees all, as if the gathering was a long-established industry standard.

Hosted by the Railway Supply Institute (RSI), Railway Systems Suppliers, Inc. (RSSI), the Railway Engineering-Maintenance Suppliers Association (REMSA), and the American Railway Engineering and Maintenance-of-Way Association (AREMA), the 2013 event sold out booth space by mid-August—no mean feat given the ample room provided by the Indianapolis Convention Center. Those attending were bombarded by new products and technical innovations, offered by companies large and small, ranging from fuel-efficient locomotive engines to wayside signals. Many companies, including Railway Age parent Simmons-Boardman Publishing Corp., staffed display spaces at two or more locations throughout the exhibition, and

while RSI, RSSI, and REMSA each hosted exhibition space, the net result was a seamless display of goods and service throughout. While the exhibition was primarily aimed at freight railroad operations and customers, passenger rail was not forgotten. Players as large as Alstom and Siemens mixed in with smaller suppliers touting their expertise in (for example) aiding Cincinnati’s nascent streetcar construction project, now ongoing. Supplier participation “continues to grow,” says RSI President Tom Simpson. “There were more 10 foot by 10 foot equivalent booths this year than in Minneapolis,” the site of Railway Interchange 2011. “The exhibitors have really embraced this and, at least for where I can vouch in the RSI area, it November 2013 Railway age 29

Railway iNTeRChaNge 2013

Utah Transit Authority officials were honored with AREMA’s 2013 Hay Award for UTA’s FrontRunner South rail line.

seemed that the exhibits were on a grander scale. I think that, too, indicates the supply acceptance of this as an every-other-year, can’t-miss event.” Tier IV dominates developments

Notable among the numerous developments: New York Air Brake debuted its new control valve, the DB60 II, designed to improve braking capability on various terrain—an industry issue now highlighted in 30

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Railway Age Managing Editor Douglas John Bowen poses a question to an AREMA panel discussing PTC developments.

unfortunate fashion by the July 6, 2013 derailment and explosion of a Montreal, Maine & Atlantic (MMA) train in Lac-Megantic, Quebec. “All air brakes leak—the allowable standard is one psi per minute—and they leak more when cold or worn,” said New York Air Brake Senior Vice President Jason Connell. “This leakage is not normally a problem on flat terrain, when brakes are applied for short periods of time. But when brakes

are applied on a long grade for an hour or more, they need recharging.” New York Air Brake’s “brake cylinder maintaining” feature on its new DB60 II brake valve solves this problem by enabling a constant recharge of the brake cylinder during braking. “This improves safety and ensures a more even brake cylinder pressure along the entire train, enabling the cars in the train to brake evenly,” says DB60 II Product Manager Deepak Kumar. “It dramatically reduces

Top photo courtesy of AREMA. Bottom photos: Mischa Wanek-Libman

Addressing the AREMA opening conference session held during Railway Interchange 2013, analyst Anthony Hatch (seen on screen) said intermodalism offered substanital opportunity to future freight rail growth.

Railway iNTeRChaNge 2013

the risk of bringing the train to a halt on a steep grade. Maintenance costs decrease, fuel use lessens, and ontime performance improves.” Engine power was a prime feature among many Railway Interchange 2013 exhibitors. General Electric Co. and subsidiary GE Transportation touted the Evolution Series Advance Power 4 locomotive, designed to meet Environmental Protection Agency’s (EPA) Tier 4 emission standards without the use of any type of aftertreatment. GE said it had invested $600 million in the Evolution Series since its introduction in 2005, and started field testing a Tier 4 compliant locomotive along 100 miles of track through western Pennsylvania and eastern Ohio. Additional field testing will take place in the near future, it said. In addition, GE’s NextFuel™ Natural Gas Retrofit Kits were touted to offer Evolution Series locomotives the ability to operate with dual fuel capabilities, either by diesel fuel or liquid natural gas (LNG), while not compromising performance. For its part, Cummins Inc. introduced its 4,200-hp (3,132 kW) QSK95 Power Module, meeting EPA Tier 4 regulations, noting that its module will first enter service with Indianapolis-based Indiana Rail Road Co. by mid-2014. “This fully self-contained power module represents the first repower package capable of bringing Tier 4 ultra-low emissions capability to heavyhaul locomotives,” Cummins said. “The QSK95 Power Module is designed to replace the complete diesel-electric system and carbody of the base locomotive as a complete drop-in package. The fully enclosed unit features the QSK95 engine, alternator, cooling system, and dynamic braking system, together with integral Selective Catalytic Reduction (SCR) exhaust aftertreatment specifically designed for locomotives. The clean combustion of the QSK95 works together with Cummins SCR aftertreatment to meet stringent Tier 4 emissions levels.” The QSK95 Power Module is the result of a

design collaboration between Cummins and Sygnet Rail Technologies Inc. Intermodal on the rise

Conference sessions hosted by AREMA and the Coordinated Mechanical Associations (CMA) as always covered a wide range of technical subjects, but if any one development could be argued to be above others, intermodalism might be as good a choice as any. Indiana Rail Road, in many ways the “host” railroad at Railway Interchange 2013, also made it clear its future relies in large measure on intermodal traffic. During the show, INRD CEO Tom Hoback informed attendees the Indianapolis-based regional railroad would open its new Senate Avenue Intermodal Terminal on Oct. 10 (see story p. 12). The multimillion dollar investment by INRD, in conjunction with CN, will facilitate freight movement between the U.S. Midwest and Asia in as little as 20 days

via Canadian ports in Vancouver and Prince Rupert, both in British Columbia, bypassing Chicago congestion. Others besides INRD were advising (or warning) Railway Interchange 2013 attendees of intermodal’s future influence, including analyst Anthony Hatch, addressing an AREMA opening conference session Monday, Sept. 30. Describing intermodal traffic growth as perhaps the long-term opportunity, Hatch also created some clearly visible discomfort among audience members when he cautioned that coal’s dominance as a railroad traffic generator was in serious jeopardy, due to a combination of political, environmental, and economic factors. Hoped-for salvation via export coal as a long-term option, Hatch observed, was a slim hope at best, even for Western railroads less vulnerable to shutdowns of domestic energy plants relying on coal as their primary fuel source. RA

Compact design Arrives at site fully assembled Minimal foundation Refill sand indicator in silo Receives 25 tons; full-truck delivery Automatic shutoff when locomotive box is full Safe sanding; no fall protection

November 2013 Railway age 31

PasseNgeR tRaiNs oN FReight RailRoads

“We ARe one industRy” Railway Age’s 20th annual conference on shared-use addressed the capacity needs of a growing industry. By william C. VaNtuoNo, editor-in-Chief

he 20th edition of Railway Age’s annual Passenger Trains on Freight Railroads Conference last month in Washington, D.C. tackled the issues that passenger and freight rail operators have been dealing with for at least a generation: Capacity. Safety. Liability. Compensation. Competition. Access. Underscoring all of these is growth, which in recent years has been both a blessing and a challenge, for both sides. Yet, should shared-use really be an issue of “sides,” freight vs. passenger? Amtrak President and CEO Joe Boardman, in his keynote address, had this to say: “There is a misperception that there are two kinds of railroad: a private one that hauls freight, and a public one that carries people. The reality is that our industry is a mixed collection of carriers, freight and passenger railroads, bound by agreements, arrangements, rules, and procedures, and by culture—largely internal, but also by the constantly changing business and political culture in which we operate.” “Amtrak just broke its annual ridership record again, 31.6 million riders and $2.1 billion in ticket sales, our 10th annual record in 11 years, but it has really only been about five or six years that we began to have the ability to price-manage our Northeast Corridor business,” Boardman said. “The freight railroads have found the same ability, nearly doubling their operating revenue over the past decade. It is a remarkable change to be thinking and talking about capacity growth for both passenger and freight. This is important to us as an industry because Amtrak is a major beneficiary of the strong financial health of our host railroads, and those who depend upon NEC access. Freight and commuter railroads both depend on Amtrak’s financial health. Over the long term we will continue to be interdependent, and carriers like Amtrak have a vital interest in a healthy and thriving freight industry.” The creation of Amtrak in 1971 “was a major step toward the restoration of a healthy freight sector,” Boardman said. “The health of that passenger sector depends on the continued health of the freight carriers and the willingness of Congress to contract with Amtrak to pay the cost of longdistance trains. That is an open question for the next Amtrak bill, I believe. Amtrak relieved the freight carriers of a portion of their common-carrier obligation, but we are also

Railway age

November 2013

Amtrak CEO Joe Boardman (left) and former FRA and railroad official Steve Ditmeyer were featured speakers.

the most publicly visible component of their obligation to serve the public. That too is an open question for the industry. Will there be any future obligation on the freight railroads to renew passenger service if Congress decided to end its national contract with Amtrak?” Noting that, in some corners of Congress, there have been attempts to privatize Amtrak’s long-distance services and open those routes to competition, Boardman said that the agreement between Amtrak and its host freight railroads “has held us together for more than four decades, and it’s a good one. Few nations are as well-served by its rail systems as America. Our service is founded on our partnership because in the final estimate, we are one industry. I believe we will rise or fall as an industry. Our problems and challenges aren’t narrowly confined to one carrier or one type of carrier. They are industry challenges.” One of those challenges is operating discipline. In a luncheon address, Steve Ditmeyer, who currently is devoting much of his time to education as an Adjunct Professor of Railway Management at Michigan State University’s Eli Broad College of Business, recalled a late-1970s meeting with Missouri Pacific President Downing Jenks: “After returning to the FRA as head of the policy office, I had occasion to meet with Jenks. He explained to me that, even though the creation of Amtrak had reduced the financial burden of passenger service on the MoPac, there were some unforeseen consequences. It seems that the drastic reduction in the number of passenger trains brought with it a loss of operating discipline. Yardmasters, trainmasters, and superintendents, who had all known that passenger trains had priority, decided that, once the passenger trains had largely disappeared, they could run the freight trains whenever they felt like running them. Jenks found that reintroducing discipline into the MoPac’s freight operations was a major management challenge.” Boardman’s and Ditmeyer’s remarks are only a fraction of what was presented in Washington. For those who did not attend the conference and would like to access the available presentations, they can be purchased through the SimmonsBoardman Conference Division. Contact Michelle Zolkos, mzolkos@sbpub.com. RA

People

Meetings

HigH Profile Marta R. Stewart was named executive vice president and chief financial officer for Norfolk Southern Corp. effective Nov. 1, reporting to President James a. Squires. Stewart succeeds John P. Rathbone. Said NS CeO wick Moorman, “we thank John Rathbone for his leadership, counsel, and numerous contributions that have been instrumental in building today’s Norfolk Southern. i am confident that our company’s history of financial excellence will be in good hands with Marta Stewart.” Stewart joined Norfolk Southern in 1983 Stewart NorfolkSouthern and served in several finance positions before being named vice president and controller in 2003 and then vice president and treasurer in 2009. She holds a bachelor’s degree in accounting from The College of william & Mary and is a Certified Public accountant.

November 16-20 NITL Conference and TransComp Exhibition/IANA Intermodal Expo Hilton americas, Houston, Tex. Tel.: 703-524-4011; email: info@nitl.org; website: www.regexpo.com/ aTS/NiTl13/Client/1.asp.

AMTRAK—Mark Murphy named general Manager, long Distance Services, based in Chicago. NORFOLK SOUTHERN—named seven to new management responsibilities, effective Nov. 1 with one exception. Clyde H. “Jake” Allison Jr. named vice president audit and compliance in Norfolk. Fredric M. Ehlers named vice president information technology in atlanta. Jerry W. Hall named vice president network and service management in atlanta. Thomas E. Hurlbut named vice president and controller in Norfolk. Denise W. Hutson named corporate secretary Oct. 1 with headquarters in Norfolk. Alan H. Shaw named vice president intermodal operations in Norfolk. Thomas G. Werner named vice president and treasurer with headquarters in Norfolk. SANTA CLARA VALLEY TRANSPORTATION AUTHORITY (SAN JOSE)—appointed Nuria I. Fernandez general Manager, succeeding Michael Burns.

SUPPLIERS American Railcar Industries, Inc.— Jeffrey S. Hollister appointed President and interim CeO, succeeding James Cowan, who resigned. Holland Co.—Kevin Flaherty promoted to executive Vice President-MOw Business. Len O’Kray promoted to executive Vice President-Mechanical Business. Randy Haberman promoted to Vice President-Holland equipment 34

Railway age November 2013

Division. Frank Francis promoted to Vice President-Finance. L.B. Foster—William Treacy named general Manager, Transit Products. Kyley Holmstrom named Regional Class i Sales Manager. Stacy Borkofsky named Regional Class i Sales Manager. Tim Galownia named inside Sales Representative. Robin Davidson named Head of Sales, Rail Technologies UK ltd. Thales—Marie-Françoise Walbaum named to the Board of Directors, succeeding Amaury de Sèze.

100 YEARS AGO in

(NOVEMBER 1913) GAS-ELECTRIC LOCOMOTIVE The latest application of the idea of gas-electric propulsion [for] railway work is the 57-ton locomotive recently placed in service by the Minnesota, St. Paul, Rochester & Dubuque Election Traction Co., perhaps better known as the “Dan Patch” Line. The freight traffic and excursion passenger traffic had grown so heavy that ... the gas-electric locomotive was purchased [from] the Erie, Pa. works of the General Electric Co. Since being placed in service in July, it has been in constant service and has proven successful in every respect. The fuel consumption when using “motor spirits” has been about one gallon for 95 ton miles.

November 18-21 ASLRRA General Counsel Symposium and Finance & Administration Seminar w/ AASHTO Short Line Academy Kansas City, Mo. Jenny Bourque, Tel.: 202-628-4500; email: jbourque@aslrra.org; website: www.aslrra.org. December 10-11 ASLRRA Track Safety Standards Training Seminar Four Points by Sheraton Bwi airport Hotel, Baltimore, Md. Tom Streicher, Tel.: 202-6284500; email: tstreicher@aslrra. org; website: www.aslrra.org. January 5-8, 2014 NRC Conference & NRC-REMSA Exhibition Palm Desert, Calif. ashley Bosch, Tel.: 202-715-1247; email: abosch@nrcma.org; website: www.mrcma.org/go/conference. January 23-24, 2014 10th Annual Southwestern Rail Conference Dallas, Tex. Bernie Rodriguez, Tel.: 469-569-0136; email: bernie@texasrailadvocates.org; website: texasrailadvocates. org/conference/?confiD=6. April 8-10, 2014 New Jersey TransAction Conference 2014 atlantic City, N.J. email: Njtransaction@aol.com; website: www.njtransaction.com.

Products Lightweight LED tube light from Phoenix Products

Milwaukee-based Phoenix Products Co. inc. has launched its leDlT linear leD Tube light, a 17 watt, 1,250 lumen fixture designed for use in a wide variety of environments. This impact resistant, low-profile, polycarbonate tubular fixture uses 50% less energy than a two-lamp 17 watt linear fluorescent. The leDlT is iP66 rated, eTl/ceTl certified to Ul1598 and Ul1598a, and CSa C22.2 No.250.0, making it ideal for usage in demanding environments. with fully potted drivers and conformal coated leD boards, the leDlT is designed to prevent moisture intrusion as well as protection against shock and vibration. The fixtureâ&#x20AC;&#x2122;s light weight, slim design, and option for daisy chaining allow the leDlT to be used in a multitude of applications including railcars, heavy equipment, walkways, marine environments, exterior wet locations, and numerous other industrial purposes. For more information, contact Product Manager Melissa Stephany, Phoenix Products Co., inc., 8711 west Port ave., Milwaukee, wis. 53224, Tel.: 414-973-3320; Fax: 414973-3220; email: mstephany@phoenixproducts.com; website: www.phoenixproducts.com.

Multidiameter adaptable sealant module by Roxtec Multidiameterâ&#x201E;˘ by Roxtec is an adaptable sealing solution based on a rubber-sealing module that consists of two halves, a center core, and removable black and blue layers. This construction ensures adaptability to different sizes of cables and pipes. The user can peel off layers to achieve a tight installation. a single module can seal a cable or pipe over a span of several different diameters simply by removing layers from the module halves. in fact, most cables can be effectively sealed with just six basic sizes of Roxtec sealing modules. easily installed Roxtec modules are used together with a frame and a compression unit, resulting in an optimum sealing solution suitable for wide-ranging train industry applications. For more information, contact Mike Behary, Roxtec North american Segment manager, Rolling Stock, Tel.: 330635-3260, or Sharon weidner, Rail Sales and Marketing manager, Tel.: 717-412-4657; email: railway@roxtec. com; website: www.roxtec.com. 36

Railway age

November 2013

Ad Index Company

Phone #

Fax

Email address

Cyclonaire Corp.

402-362-2000

402-362-2001

sales@cyclonaire.com

Page # 31

ellwood Crankshaft & Machine

724-347-0250

724-347-0254

ecgsales@elwd.com

electro-Motive

800-255-5355

708-387-6626

genuineparts@emdiesels.com

Fulmer Company

724-325-7140

724-327-7459

jroberts@fulmer.com

Helm Financial Corp.

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

bwind@hlmx.com

Herzog Services, inc.

816-901-4035

816-233-7757

rebersold@herzogcompanies.com

Knoxville locomotive works

865-525-9400

865-546-3717

goklw.com/contactus

MTU

+1 248 560 8484

+1 248 560 8485

bryan.mangum@tognum.com

Okonite Co.

201-825-0300

201-825-3524

info@okonite.com

ORX

814-684-8484

Phoenix Contact

800-888-7388

717-948-3475

info@phoenixcon.com

Plasser american Corp.

757-543-3526

757-494-7186

plasseramerican@plausa.com

Railquip, inc.

770-458-4157

770-458-5365

sales@railquip.com

Railroad Financial Corp.

312-222-1383

312-222-1470

tkruglinski@railfin.com

Rails Co.

973-763-4320

973-763-2585

rails@railsco.com

Railworks

glenn@orxrail.com

C4 12 16, 17

866-905-7245

952-469-1926

jrhansen@railworks.com

Railway educational Bureau, The 402-346-4300

402-346-1783

bbrundige@sb-reb.com

Regions Bank

404-832-3408

646-264-9535

matthew.chamberlin@mindshareworld.com 25

Siemens

800-SieMeNS

www.usa.siemens.com.transportation

Soft Rail

888-872-4612

sales@signalcc.com

Strato

732-317-5406

732-981-1222

korozco@stratoinc.com

Trackmobile llC

706-884-6651 ext.229

706-884-0390

keithsellers@trackmobile.com

Transcore

214-461-6443

800-923-4824

www.transcore.com

Trimble Navigation

720-587-4606

rail@trimble.com

TTX Company

312-606-1450

felix.castillo@ttx.com

willamette

541-484-9621

541-284-2096

03alishab@wilvaco.com

24 35, C3 7 28

20, 21 26 18,19

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

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 55 Broad St., 26th Floor New york, Ny 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, AR, IN, KY, LA, MI, MS, OH, OK, TN, TX emily guill 20 South Clark Street, Suite 1910 Chicago, il 60603 (312) 683-5021 eguill@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, WV, CANADA – QuEbEC AND EAST, ONTARIO Mark Connolly 55 Broad St., 26th Floor New york, Ny 10004 (212) 620-7260 Fax: (212) 633-1863 mconnolly@sbpub.com

AK, AZ, CA, CO, IA, ID, IL, KS, MN, MO, MT, NE, NM, ND, NV, OR, SD, uT, WA, WI, WY, CANADA – Ab, bC, Mb, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, il 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com bELGIuM, PORTuGAL, SWITZERLAND, GERMANY, EASTERN EuROPE, bALTIC STATES, MIDDLE EAST, SOuTH AMERICA, AFRICA (EXCEPT SOuTH AFRICA), FAR EAST (EXCEPT KOREA, CHINA, HONG KONG, INDIA), ALL OTHERS, TENDERS louise Cooper international area Sales Manager The Priory, Syresham gardens Haywards Heath, RH16 3lB United Kingdom +44-1444-416917 Fax: +44-(0)-1444-458185 lc@railjournal.co.uk

SCANDINAVIA, THE NETHERLANDS, SPAIN, GERMANY, AuSTRIA, KOREA, HONG KONG, CHINA, AuSTRALIA, NEW ZEALAND, SOuTH AFRICA, RuSSIA, RECRuITMENT ADVERTISING Steve Barnes international area Sales Manager The Priory, Syresham gardens Haywards Heath, RH16 3lB United Kingdom +44-1444-416375 Fax: +44-(0)-1444-458185 sb@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

November 2013 Railway age 37

pRoducTs & seRvIces

Railroad Battery Chargers - Microprocessor Controlled SCR Charging Technology - Complete Isolation from AC to DC - Lightning Protection -Filtered Output for VRLA Batteries

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

106 Bradrock Drive, Des Plaines, IL 60018 Phone: 847-299-1188 Fax: 847-299-3061 Web: www.lamarchemfg.com

pRoFessIoNAL dIRecToRY

Reidler can help you comply with the FRA ruling by offering prismatic reflective yellow delineators that meet their specifications. • 4" x 150 fl Rolls (kiss-cut available) • 400 candlepower retroreflection • Application instructions provided #9 115RE & 136RE AREMA Turnouts available for immediate delivery. 2 Santa Fe Drive – Denver Colorado 80223 – 720-355-0664 www.Specialtrackwork.com

Locomotive repair shop with a pit available for sale in Monroe, GA (1 hr. east of Atlanta). 7,200 sq. ft. bldg. on over 17 acres of land with 727 feet of rail frontage. Contact Kyle Chong at kyle@railtrusts.com or (904) 241-4176.

Give us a call at 800-628-7770 for more information The Leader in Railroad Markings since 1926

GLOBAL RAIL TENDERS

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

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Railway Age classified section Jeanine Acquart 212-620-7211 jacquart@sbpub.com 38

Railway age

November 2013

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

equIpmeNT sALe/LeAsING

Available For Lease

RecRuITmeNT

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

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

◆ Mill Gondolas - 65’ 6” interior length with 5’ sides and 52’6 interior length with 4’6” to 5’ sides. ◆ 4600, 4650 & 4750 cu. ft. covered hoppers – Trough hatches & gravity outlet gates. ◆ 3,600 cu. ft. Open Top Hoppers. 45 degree slopes for aggregate, coke, coal, etc. ◆ 4,240 cu. ft. tub bottom rotary gondolas Interior bracing still in place.

The new

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

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