November 2014 Railway Age

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COAL ON A COMEBACK TTC GOES LOW-FLOOR HHP SUMMIT REPORT

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RailwayAge

NOVEMBER 2014

visit us at www.railwayage.com Features Four paths to natural gas 21 Big-box bonanza

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Is coal on a comeback?

28

TTC goes low-floor

32

News/Columns From the Editor

2

Update

9

Watching Washington

14

Financial Edge

40

Departments 4

Industry Outlook

6

Market

8

People

35

100 Years Ago

35

Meetings

35

Products

36

Advertising Index

37

Professional Directory

38

Classified

39

24

SPECIAL ADVERTISING SECTION

Industry Indicators

OVERCOMING M/W CHALLENGES Successful Case Studies

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32 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

ON THE COVER A Norfolk Southern doublestack descends Horseshoe Curve, Altoona, Pa. Photo courtesy Norfolk Southern

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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. 215, No. 11.

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November 2014 RAILWAY AGE 1

RailwayAge

From the Editor WILLIAM C. VANTUONO

EDITORIAL AND EXECUTIVE OFFICES Simmons-Boardman Publishing Corp.

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William J. Ronan, 1913-2014

W

illiam J. Ronan, generally acknowledged as the architect of the New York Metropolitan Transportation Authority, and who served as its first chairman, died Oct. 15, 2014 at his home in West Palm Beach, Fla. He was 101.

A Ph.D. in Political Science described as “one of the most powerful officials in the modern history of New York State,” Ronan never held an elected office. Yet, as a trusted aide and advisor to New York Gov. Nelson A. Rockefeller, he masterminded many changes that shaped mass transportation in the New York Metropolitan Area into what we know today.

In 1966, following creation of the Metropolitan Commuter Transportation Authority, Ronan engineered the state’s purchase of the Long Island Rail Road from the ailing Pennsylvania Railroad.

Two years later, when the MCTA evolved into the New York MTA, Ronan—as newly installed chairman—outmaneuvered highways, bridges, and parks builder Robert Moses to incorporate the Triborough Bridge and Tunnel Authority (of which Moses was chairman) and the New York City Transit Authority into the MTA. Ronan laid the groundwork for the creation of MTA Metro-North Railroad by acquiring, from the Penn Central, the New Haven line in 1971 and the Harlem and Hudson lines in 1972.

Largely because of Ronan’s influence, and the power wielded by the MTA, critics at the time called the agency the “Wholly Ronan Empire.”

In March 1968, Railway Age editors Luther S. Miller and Joe Asher conducted an extensive interview with Ronan.

New York City on the first of that month “became the home of the world’s most powerful regional transportation agency,” Miller and Asher wrote in our March 4, 1968 issue. “Dr. Ronan unveiled the world’s biggest urban transport program, calling for $2.9 billion worth of rail transit

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RAILWAY AGE

November 2014

and commuter railroad improvements.

How will New York foot the bill? With money generated by history’s biggest bond issue, $2.5 billion.”

“We must plan not only for today’s needs—in some cases I’m afraid that what we are doing is trying to catch up with yesterday’s needs—but tomorrow’s as well,” Ronan said. “We forget that a great deal of the earlier provision of transportation was speculative, and fortunately for us it was, because in this way we built ahead of need. If it hadn’t been for speculative building, I hate to think of where the New York Metropolitan Area might be today… I would say very definitely that in Boston, New York, Chicago, Los Angeles, San Francisco, Washington, and other areas, rapid transit is not only desirable— it’s a must.”

Some of Ronan’s ambitious expansion plans are only today under way. These are the Second Avenue Subway and Long Island Rail Road East Side Access. A third project, New York City Transit’s 63rd Street Tunnel, was completed in 2001.

“We need a federal program really in the order of billions and not hundred millions,” Ronan told Railway Age, referring to President Lyndon Johnson’s request for $230 million in federal transit funds for Fiscal Year 1970, following creation of the U.S. Department of Transportation.

“We’ve got to see on the federal level what we have been seeing here in New York State: a recognition of mass transportation having an importance that is commensurate with highway transportation.”

Nearly a half-century later, as a nation we’re still struggling with that concept.

Perhaps what we need is a modern-day William J. Ronan at the federal level. No doubt, people with his vision are out there.

They’re just not on Capitol Hill.

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: Roy H. Blanchard, Lawrence H Kaufman, Bruce E. Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Creative Director: Wendy Williams Art Director: Sarah Vogwill Corporate Production Director: Mary Conyers Production Manager: Lily Man Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney WESTERN OFFICES 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Jennifer Nunez jnunez@sbpub.com 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.

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Industry Indicators TRAFFIC ORIGINATED CARLOADS

SHORT LINE AND REGIONAL TRAFFIC INDEX FOUR WEEKS ENDING SEPT. 27, 2014

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

SEPT. ’14 70,656 3,918 34,751 24,431 117,852 65,526 457,291 6,791 14,093 24,897 30,793 16,459 44,971 17,320 68,378 101,978 21,299 35,492 13,955 19,580 1,190,431

SEPT. ’13 67,905 3,446 33,600 25,567 116,787 51,151 465,400 6,324 13,375 24,456 30,696 15,236 42,040 16,570 69,269 90,555 21,715 33,499 14,746 17,257 1,159,594

% CHANGE 4.1% 13.7% 3.4% -4.4% 0.9% 28.1% -1.7% 7.4% 5.4% 1.8% 0.3% 8.0% 7.0% 4.5% -1.3% 12.6% -1.9% 5.9% -5.4% 13.5% 2.7%

334,580

336,339

-0.5%

1,525,011

1,495,933

1.9%

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

FOUR WEEKS ENDING SEPT. 27, 2014

INTERMODAL MAJOR U.S. RAILROADS

BY COMMODITY TRAILERS CONTAINERS TOTAL UNITS

SEPT. ’14 118,624 954,418 1,073,042

SEPT. ’13 117,023 910,216 1,027,239

% CHANGE 1.4% 4.9% 4.5%

7,124 234,360 241,484

6,759 219,760 226,519

5.4% 6.6% 6.6%

125,748 1,188,778 1,314,526

123,782 1,129,976 1,253,758

1.6% 5.2% 4.8%

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

Source: Monthly Railroad Traffic, Association of American Railroads

AVERAGE WEEKLY U.S. RAIL CARLOADS: ALL COMMODITIES (not seasonally adjusted)

% CHANGE 13.2% 6.5% 23.2% 2.3% 15.1% 4.1% 16.3% 50.1% 12.8% 12.8% 40.6% 4.3% 4.8% 18.7% 13.3% 10.6% 6.4%

SEPT. 2014 - 398,115 SEPT. 2013 - 355,900 320,000 330,000 340,000 350,000 360,000

370,000 380,000 390,000 400,000 410,000

Copyright © 2014 All rights reserved.

RAILROAD EMPLOYMENT, CLASS I LINEHAUL CARRIERS, SEPTEMBER 2014 (% CHANGE FROM SEPTEMBER 2013)

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

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

TOTAL CARLOADS, SEPTEMBER 2014 VS. 2013

CANADIAN RAILROADS ALL COMMODITIES

ORIGINATED SEPT. ’14 47,701 22,661 36,043 11,774 23,680 6,901 11,292 6,914 24,802 11,998 2,961 2,203 21,081 14,957 50,190 11,970 90,987

BY COMMODITY

Transportation (train and engine) 70,323 6.25%

Executives, Officials, and Staff Assistants 9,945 1.98%

Professional and Administrative 14,163 2.90%

TOTAL EMPLOYEES: 168,703 % CHANGE FROM SEPT. 2013: 3.35% Transportation (other than train & engine) 6,699 (-0.24%)

Maintenance of Equipment and Stores 30,291 2.69%

Maintenanceof-Way and Structures 37,282 (-0.11%)

Source: Surface Transportation Board

EMPLOYMENT UP FROM YEAR-AGO, PRIOR-MONTH PERIODS Figures released by the Surface Transportation Board show Class I total railroad employment rose 3.35% in mid-September 2014, measured against mid-September 2013, and was up 0.43% from mid-August 2014. Transportation (train and engine) again powered the year-overyear gain, up 6.25%, also rising 1.19% over mid-August levels. Others up from mid-August: Maintenance of equipment and stores, up 0.46%, and Transporation (other than train and engine), up 0.03% 4

RAILWAY AGE

Novermber 2014

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Industry Outlook Greenbrier: Don’t delay retrofits

Top Calif. court spurns HSR challenge California’s State Supreme Court last month rejected the latest challenge to the Golden State’s proposed 700-mile high speed rail project, clearing the way for initial construction.

Opponents sought to overturn a lower state court ruling allowing the California High-Speed Rail Authority (CHSRA) to proceed, arguing CHSRA was not complying with terms of the 2008 ballot measure, passed by state voters, providing state bonding authority to back the HSR project. An appellate court last August agreed that some legitimate concerns were being voiced, but declined to halt the project solely on that basis.

Landowners in the state’s Central Valley, site of the first and second stages of the project, assert the state hasn’t identified specific funding sources and has failed to answer environmental concerns, charges the Supreme Court rejected.

The Surface Transportation Board earlier ruled that CHSRA “is authorized to construct a 114-mile high-speed passenger rail line between Fresno and Bakersfield, Cal., subject to environmental mitigation conditions.”

FTA and MARTA launch LRT study

STB: Report on performance The Surface Transportation Board announced it is requiring all Class I railroads to publicly file weekly data reports regarding service performance “to promote industrywide transparency, accountability, and improved service.” The decision requiring the reporting of service performance data was issued in United States Rail Service Issues— Data Collection, Docket No. EP 724 (Sub-No. 3).

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November 2014

The Federal Transit Administration and Metropolitan Atlanta Rapid Transit Authority (MARTA) are advancing a study that could establish Atlanta’s first light rail transit (LRT) line along what’s called the Clifton Corridor, along a rail line owned by CSX Corp.

The proposed 8.8-mile route would link with MARTA’s existing Lindbergh Station through the Centers for Disease Control (CDC) headquarters and Emory University and Emory Hospital campuses to the Avondale MARTA station.

The route could succeed, supporters say, because the area it would cover is not served well by MARTA rapid transit or the city’s highway system. But area residents fear increased congestion.

FTA and MARTA have scheduled two public meetings next month to record public input on potential options.

The Greenbrier Cos. last month reiterated its support for the Pipelines and Hazardous Materials Safety Administration’s (PHMSA) proposed Option 2 design for new tank cars in flammable service built after Oct. 1, 2015, which will be designated the DOT-116. Greenbrier said it was the first to announce plans to design a tank car with these specifications, which it calls the “Tank Car of the Future,” and plans to double its production capacity for new tank cars over the next 12 months to meet surging demand.

Greenbrier said claims by other stakeholders in the tank car industry expressing that up to 10 years will be required to fully enhance tank car puncture resistance “are simply wrong.”

The Railway Supply Institute Committee on Tank Cars, of which Greenbrier is a member, has recommended to PHMSA that “all legacy (jacketed and non-jacketed) tank cars transporting Class 3 Packing Group I and II materials other than crude oil and ethanol be modified or removed from Class 3 PG I and II service by Dec. 31, 2025. This would require modification of approximately 14,300 non-jacketed tank cars and 5,400 jacketed tank cars in other flammable liquids service.”

Greenbrier said its Tank Car of the Future “is designed for safer transportation of crude, ethanol, and other flammables in North America as well as use with other hazardous materials traffic. The car has advanced safety features that include a 9/16-inch-thick steel tank shell, more robust top and bottom outlet protection, jacketed shells with thermal protection, and full-height, half-inchthick headshields.

“These new design features combine to inhibit discharge of contents during a derailment, to reduce penetration of the tank shell and to slow pool fires that can result when hazardous contents of a tank car escape in a breach and are ignited.”

Market

China’s CNR Changchun lands first U.S. rail contract The Massachusetts Department of Transportation approved a $566.6 million contract for China’s CNR Changchun to supply 284 rapid transit cars for Boston’s “T” system, to replace Massachusetts Bay Transportation Authority (MBTA) Orange Line cars, averaging 32 years in age, and Red Line consists, operating for 44 years. MassDOT received six proposals for the contract, four of which met the minimum requirements for the bid. CNR submitted the lowest bid, MassDOT said. CNR Changchun, more formally known as Changchun Railway Vehicles, would be the first Chinese railcar manufacturer to land a major U.S. transit contract. The company would produce the fleet at a new facility in Springfield, Mass., that would double as its U.S. headquarters for seeking additional U.S. business.

North America AMTRAK: Awarded Siemens a contract to build a new Sitras SFC Plus static frequency converter for upgrading its Metuchen, N.J., traction power facility, including delivery, installation, commissioning, and integration of two 30-megawatt multilevel converters into the existing Amtrak 25-Hz traction power supply network, allowing parallel operation with existing converters.

FERROMEX : Selected RailComm to provide yard automation to 80-plus newly-installed switch machines, to be controlled via the RailComm Domain Operations Controller (DOC), in Torreon City, Mexico.

NUEVO LEON, MEXICO: Awarded Siemens a $32 million contract to equip Metro Line 3 in Monterrey with 8

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November 2014

telecommunications, signaling, and operations control systems.

NEW MEXICO BORDER AUTHORITY: Selected HNTB Corp. to study the feasibility of a new rail bypass and international rail border crossing near the Santa Teresa, N.Mex., Port of Entry into Mexico RIDEAU TRANSIT GROUP (OTTAWA): The design-build consortium overseeing the OC Transpo Confederation Line (Ottawa LRT Project) tapped London Trackwork Inc. to supply special trackwork, including No. 6, 8, and 12 geometry turnouts with single and double crossovers.

TRIMET: Unveiled the redesigned Siemens S70 “Type 5” MAX light rail vehicle at its maintenance facility in Gresham, Ore.

Worldwide PARIS TRANSPORT AUTHORITY (RAPT): Awarded Siemens a $57 million contract to supply communications-based train control (CBTC) for the 3.7-mile, four-station northern extension of metro Line 14.

PT KERETA API, INDONESIA: Signed a credit agreement worth $94.3 million with the U.S. Ex-Im Bank to finance the export of 50 GE Transportation locomotives to serve the nation’s national railway.

STRASBOURG TRANSPORT (FRANCE): Signed a framework contract with Alstom for 50 Citadis low-floor LRVs, with an initial $52 million order for 12 vehicles for Lines A and D, currently being extended to Mairie de Saint-Ouen.

Update SUPPLY BRIEFS Bombardier gets new NJ Transit RiverLINE contract

Final round of mergers postponed —for now

Bombardier Transportation last month signed a new contract to continue running New Jersey Transit’s RiverLINE, roughly paralleling the Delaware River between Camden, N.J., and the state capital, Trenton. The contract, valued at about $296 million, stretches for 15 years, with an option for five more years.

Effective March 14, 2015, the contract makes Bombardier responsible for train operations, dispatching, vehicle maintenance, maintenance for all right-of-way (shared in part with Conrail Shared Assets freight activity, facilities, and signaling infrastructure.)

NRE transitions to 100% employee-owned National Railway Equipment Co., headquartered in Mount Vernon, Ill., has completed transfer of the company to the newly formed NRE–Global Holdings Inc. (NRE), an Employee Stock Ownership Trust (ESOP). As part of an ongoing branding campaign, the company will simply be called NRE.

Wi-Tronix, InStep Software announce collaboration Wi-Tronix, LLC last month announced a new collaboration with InStep Software “allowing Wi-Tronix to utilize InStep’s PRiSM predictive asset analytics software in the company’s locomotive remote monitoring services.”

Wi-Tronix, a supplier of wireless monitoring products for the railroad industry, is adding a new train monitoring service called Wi-Nostix to its comprehensive portfolio. The Wi-Nostix service team will utilize InStep’s PRiSM predictive asset monitoring software for advanced analytics and diagnostics of locomotive performance, Wi-Tronix said.

Canadian Pacific CEO E. Hunter Harrison believes a Class I mega-merger could address capacity and service problems.

L

ast month, two Class I CEOs with considerable experience in mega-mergers expressed differing viewpoints on the merits of a final round of railroad mergers that would presumably create two gigantic east-west transcontinental carriers encompassing the U.S. and Canada.

Canadian Pacific’s E. Hunter Harrison (pictured, above), who within the recent past has courted CSX, maintains that mergers are the best solution for the tight capacity and service problems with which the railroads have been dealing this year.

Norfolk Southern’s Wick Moorman says that a large railroad merger would be “highly problematic” and would face “far too many regulatory hurdles.”

(CSX’s Michael Ward, while not specifically mentioning CP’s merger proposal, said he thought more mergers were “a bad idea.”)

Moorman—who played a key role in the late-1990s division of Conrail between NS and CSX—said such mergers are difficult to pull off, and in the past have created service problems that lasted “for some period of time.”

Though these mergers did create synergies, that would not happen today

because “there aren’t that many overlapping routes, and there aren’t that many redundant facilities. I just don’t think they make sense at this particular time.”

Moorman also said that regulators, namely the STB, “wouldn’t be too receptive to a major combination.

New rules require a rail merger to be pro-competitive. Those haven’t been tested, and they could be defined in ways that are very onerous.”

Harrison, who opened the door to the possibility of more mergers by initiating talks with CSX, held a special conference call on Oct. 21, reiterating his support for a final round of consolidation. Though he had abandoned talks with CSX and said he didn’t have another merger target, he said he was open to approaches from others. He also said he was against attempting a hostile takeover. Any transaction “would need to be with a cooperative partner [with whom] we see things exactly the same, and we don’t have infighting,” he said. “I can’t contemplate any kind of hostile activity between any carriers.”

Highly congested areas such as Chicago can be improved only by mergers, Harrison said, not by November 2014 RAILWAY AGE 9

Update acquiring additional locomotives or hiring more people staff. “Chicago is fragile at best; it’s not where it should be in terms of providing service,” he said. “It’s certainly a pinpoint that offers a lot of challenges.”

Contrary to early reports, Harrison said CP “was not rebuffed” by CSX. “We had some fascinating conversations about the potential, but it became evident that we saw the world a little differently, which is fine.” CP had “three to four” meetings geared toward “exploring opportunities” with CSX, but they “failed to provide enough momentum for a deal.” Merging with CSX “was a huge opportunity to enhance value for shareholders of both companies,” he said. Merging would have also allowed both railroads to improve service “and more directly impact Chicago and potential further problems there,” taking “a substantial amount” of traffic out of Chicago and rerouting it through Albany and Buffalo.

Will White, John Graham and James Frantz Form “White American Locomotive Sander Company, Inc”.

On the question of federally mandated open access, to which the industry is strongly opposed and which could be an STB-imposed condition of a mega-merger, the outspoken Harrison broke from his counterparts and the Association of American Railroads by stating that the STB would not have blocked a merger with CSX. Had the transaction been approved, CP “would have been ready to allow other railroads access to our network if one of our customers demanded it,” he said. “We would grant access to the markets. If an impacted shipper is affected, we would always give them the right to bring in Brand X. If we’re not providing the service, or if our price is not where it should be relative to the market, if they want to bring in another carrier, that would be perfectly fine.”

Harrison said that CSX or NS would be a “natural fit” for CP. He added he would not pursue KCS. “I don’t love the Mexico play,” he said.

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STB reacts to WCTL complaint The Western Coal Traffic League (WCTL) has petitioned the Surface Transportation Board to “require BNSF to submit to the Board a coal-specific service recovery plan, and for the Board to review, approve or revise, and enforce the recovery Plan.” WCTL said that BNSF “intends to remove approximately 60 coal train sets from service,” despite service problems.

STB said WCTL “argues that service disruptions have prevented its BNSF-served members from rebuilding coal stockpiles in preparation for the winter season, leaving many utilities with less coal in storage than they had at the end of last year.”

WCTL filed its petition to STB on Oct. 22 (Docket EP_724_0). STB sought a reply from BNSF no later than Nov. 3, 2014. Comments from other parties were due by the same date.

975 Air Dryer.

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Caltrain electrification plan gets go-ahead

California Gov. Edmund G. Brown, Jr. last month signed California Senate Bill (SB) 785, legislation that allows the Caltrain electrification project to proceed as a design/build procurement. The Peninsula Corridor Joint

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1995

Powers Board’s (PCJPB) authority to issue design/build contracts expires at the end of this year, but SB 785 extends the authorization until 2024. Officials said extension of design/build authority was necessary for the project to proceed as planned.

In September 2013, the PCJPB approved the use of the design/build contracting approach for designing and installing the electrification infrastructure. A Request for Qualifications (RFQ) has been issued to potential contractors. A Request for Proposals (RFP) will be issued January 2015. A contract award is expected in fall 2015.

Part of the Caltrain Modernization Program, the electrification project will transform the system from a diesel-locomotive-based service to an electrified system equipped with high-performance multiple-unit electric trains that operate off overhead

REMANSM Services Expanded.

catenary. “The electric trains will enhance capacity and allow the system to deliver cleaner, quieter, shorter trip times and, potentially, more frequent service for the corridor,” PCJPB said.

“After years of substantial ridership growth, Caltrain’s diesel system can no longer meet existing ridership demand,” the agency said.

“Electrification will support service levels that help accommodate regional job and population growth and will help prepare the corridor to eventually accommodate California’s planned high speed rail system. It will allow Caltrain to almost double the system’s forecasted daily ridership by 2040.

Greenhouse gas emissions will be reduced by 177,000 metric tons, automobile vehicle miles traveled will shrink by 619,000 miles daily, and billions of dollars in economic value will be created.”

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Update Class I third-quarter earnings set records

In line with steady U.S. economic growth, North American Class I railroads posted strong earnings results for the third quarter of 2014.

CSX Corp. on Oct. 14, 2014 announced “record third-quarter net earnings” of $509 million, or 51 cents per share, up from $455 million, or 45 cents per share, in the third quarter of 2013. Revenue of $3.2 billion was up 8% over the comparable 2013 quarter,

which CSX said was “evidence of CSX’s ability to leverage the continued economic momentum that is driving strength across nearly all markets CSX serves, coupled with secular growth trends in the intermodal and energy markets.” CSX’s operating ratio for the quarter was 69.7%.

On Oct. 17, Kansas City Southern reported third-quarter revenue of $678 million, up 9% from the third

quarter of 2013. Carload volumes for the quarter were up 4% from the comparable quarter of a year ago, the company said. Both were at record levels, KCS said. KCS notched adjusted diluted earnings per share of $1.29 during the quarter, up 17% from the third quarter of 2013, on net income of $138 million, up from $119 million in 3Q2013. KCS’s operating ratio in the third quarter was 66.1%, a 1.7 point improvement from the ratio of a year ago.

KCS revenue growth included a 28% increase in Automotive and a 13% increase in Industrial & Consumer Products. Intermodal (up 11%) and Agriculture & Minerals (up 8%) were also strong. Energy revenue declined by 4%, primarily due to a decline in utility coal and frac sand shipments, KCS said.

Canadian Pacific Railway on Oct. 21 announced record third-quarter net

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income of C$400 million (US$356.4 million), or C$2.31 (US$2.06) per diluted share, up from C$324 million or C$1.84 per diluted share, in the third quarter of 2013, an increase of 26% year-over-year.

Revenue rose 9% to a record C$1.67 billion (US$1.49 billion), while CP’s operating ratio in the quarter fell to a record low 62.8%, an improvement of 310 basis points. Operating income rose 19% to C$621 million, also a record.

Rival CN also reported its thirdquarter results on Oct. 21, citing record financial and operating results for the third quarter, with net income at C$853 million (US$758 million), or C$1.04 (92 U.S. cents) per diluted share, compared with net income of C$705 million, or 94 Canadian cents per diluted share, a year-earlier.

The 3Q13 results included a C$19 million (2 Canadian cents per diluted share) income tax expense resulting from the enactment of higher

better.

provincial corporate income tax rates.

Excluding this expense, 3Q14 diluted EPS of C$1.04 increased 21% over last year’s adjusted diluted EPS of 86 Canadian cents. Operating income for third-quarter 2014 increased 19% to C$1.3 billion.

CN’s operating ratio for 3Q14 improved by one point to 58.8% from 59.8% for the year-earlier quarter.

Free cash flow for the first nine months of 2014 was C$2.05 billion, up from C$1.31 billion for the comparable 2013 period of 2013.

CN’s operating ratio for the quarter improved by one point to 58.8% from 59.8% for the year-earlier quarter.

Norfolk Southern on Oct. 22 reported net income of $559 million in the third quarter, up 16% from $482 million in the third quarter of 2013 and a quarterly record. Diluted earnings per share were $1.79, up 17% from the $1.53 reported in the comparable quarter of a year ago, NS said. Revenue

rose 7% to $3.0 billion in the quarter compared with a year ago. Norfolk Southern’s operating ratio improved 4% to 67.0%.

“Norfolk Southern reported another record-setting quarter, during which we achieved our best third-quarter results in revenues, operating income, net income, earnings per share, and operating ratio,” said CEO Wick Moorman.

Union Pacific on Oct. 23 said its third-quarter earnings rose 19% measured against the comparable quarter in 2013, to $1.37 billion, or $1.53 per share, from $1.15 billion, or $1.24 per share, a year ago. UP’s revenue rose 11% $6.18 billion from $5.57 billion in 2013’s third quarter.

Both earnings and revenue beat Wall Street analysts’ consensus expectations.

UP reported the highest growth in intermodal, industrial products, and agricultural goods. Coal volume was flat compared with year-ago levels, with revenue up 2%.

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Watching Washington FRANK N. WILNER

AAR, Amtrak, and a Supreme challenge

I

t has been called “a deal with the devil.”

Former Southern Railway attorney James Bistline said freight railroads made the “deal” out of “desperation” in “a rush to exit” passenger service.

Former Federal Railroad Administrator Robert Blanchette—later general counsel for the Association of American Railroads (AAR)— said the “deal” was “never intended in perpetuity.”

The “deal” began in 1970, when then financially strapped freight railroads, prohibited from annulling all moneylosing passenger service, convinced Congress to create Amtrak in exchange for permitting Amtrak passenger trains access to freight-railroad owned track.

In 1973, Congress amended the “deal,” giving Amtrak preference over freight traffic. There began a persistent squabble over who is at fault when delays occur, as 72% of Amtrak trains operate on freight-railroad owned track. The Department of Transportation’s (DOT) inspector general said in 2008 that Amtrak could have saved almost one-third of its annual operating budget (in terms of employee overtime, additional fuel, and lost revenue) had 85% of those passenger trains arrived on time.

Amtrak trains traveling fewer than 250 miles are considered on-time if arriving within 10 minutes of schedule; and for greater than 550 miles, within 30 minutes. On some routes, on-time arrivals are below 50%, and average 74% systemwide.

Thus, the 2008 Passenger Rail Investment and Improvement Act provided that if a host freight railroad failed to meet an 80% on-time performance standard for any Amtrak train in two consecutive quarters, and the Surface Transportation Board (STB) determined freight railroads were at fault, the STB could impose hefty 14

RAILWAY AGE

November 2014

fines, payable to Amtrak, and prescribe a remedy.

The congressionally ordered metrics and standards to determine performance and service quality were jointly developed by Amtrak and the Federal Railroad Administration, in consultation with the STB, but are on hold pending judicial finality.

An AAR court challenge to their use has reached the Supreme Court, where oral argument is scheduled for Dec. 8. Previously, a federal district court dismissed the AAR challenge, but a circuit court of appeals reversed that decision.

AAR argues Amtrak consumes a disproportionate share of freight railroads’ limited capacity.

The AAR says that making Amtrak an equal partner with the FRA and STB in regulating freight railroads is an unconstitutional delegation of congressional power. And permitting Amtrak—a financially interested party that would benefit from violations of rules it helped create—to participate in depriving freight railroads of their private property is a violation of the Constitution’s Due Process clause.

Additionally, the AAR argues in its pre oral-argument brief: • Amtrak consumes a disproportionate share of the freight railroads’ limited capacity (train slots) because passenger trains travel at higher speeds than freight trains, requiring slower

freight trains to yield track capacity.

• Rather than violate the Amtrak preference requirement, freight railroads have modified their own operating and maintenance schedules in an attempt to improve Amtrak’s on-time performance.

• The metrics and standards Amtrak helped develop rely on conductor provided reports that assign responsibility for delays, thus allowing Amtrak to create and supply its own evidence in determining violations.

DOT and the FRA (an agency of DOT), rather than Amtrak, are parties to the AAR challenge. In its brief, DOT argues: • Taken together, the involvement of the FRA in promulgating the metrics and standards, the role of the STB in their enforcement, and the federal government’s structural control over Amtrak more than suffice to avoid a constitutional violation.

• Even when metrics and standards have not been satisfied, a host railroad faces liability only if the STB determines that it failed to comply with the “long-standing statutory preference requirement, which is independent of the metrics and standards.”

Interestingly, the Association of Independent Passenger Rail Operators (AIPRO), in a friend of the court brief, complains that Amtrak, no longer a monopoly provider of intercity rail passenger service, has been given regulatory authority over its competitors.

AIPRO members, like Herzog, Keolis, and Veolia, are bidding to replace Amtrak in operating state-supported corridor routes fewer than 750 miles.

Curiously, no party has provided sensitivity analysis as to how the Amtrak delay rate might improve where scheduled arrival times increased by a few minutes. Perhaps Supreme Court justices will enquire.

SPECIAL ADVERTISING SECTION photo: Pitsanu Kraichana

OVERCOMING M/W CHALLENGES Successful Case Studies

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.

SPECIAL ADVERTISING SECTION

GEORGETOWN RAIL EQUIPMENT COMPANY SUCCESSFUL railroad technology solutions pay even further dividends when data streams are fully utilized.

This is especially the case with Georgetown Rail Equipment Company’s (GREX) Aurora wood tie inspection data.

In addition to gathering tie condition data, GREX is utilizing Aurora’s tieby-tie differential GPS and milepost location information to optimize the tie set out process performed by its Self-Powered Slot Machine (SPS) independent work platform.

Through a partnership with mobile App developer Atomic Axis based in Austin, Texas, GREX developed realtime tie set out optimization algorithms that utilize GPS and encoder data. The resulting app is installed on Androidbased tablets located in the SPS’s excavator. The commonality of the GPS and wheel encoder used by Aurora and the SPS train ensures reliable location information for ties to be set out precisely where Aurora identified defective ties.

The Aurora automated tie inspection system scans more than 35,000 miles of ties each year, accurately mapping the location of each tie to be replaced.

GREX’s Tie Maintenance Optimizer (TMO) App uses the location of defective ties and applies variables such as tie gang direction, consideration for special trackwork, locations of bridges/ crossings and max bundle size to place ties on the ground.

Throughout development, GREX gave special attention to the user interface and how the operator would manipulate the controls. An operator’s dexterities are taxed even under normal operating circumstances, so it was important that the interface was simple, fast and required no additional movements.

Much of this was achieved by adding a custom joystick in the excavator with special keys specifically designed to allow operator input without additional

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RAILWAY AGE

November 2014

1

2

3

4

The TMO app provides a graphical overview of the tie drop zones, tie drop amount and the ability for the operator to provide feedback while measuring location through GPS and an optical encoder for precise tie placement; the mapping interface provides real-time updates.

hand movements. A tablet mounted inside the excavator keeps the operator informed in real-time of the progress while letting the operator know the exact number of ties to drop off. The TMO App automatically updates and recalculates the unloading plan as ties are set out and the SPS moves down the track.

The end result is reduced handling and reduced operating costs for tie gangs.

Now, railroads can utilize the most comprehensive tie inspection system in the industry to define their tie replacement program and then execute that program with the tie set out service via GREX SPS with unmatched efficiency.

A well-placed tie lot increases a team’s productivity, boosting production in the same work window and with increased safety benefits.

Finally... a tie maintenance solution that really delivers.

Aurora® tie inspection and self-powered SlotMachine® (SPS®) efficiency are now integrated through a powerful app. GREX tie maintenance optimization starts by using our Aurora® track inspection system to target damaged ties for replacement. Then we feed that data into a specialized app to determine the best way to deliver new ties for your tie gangs. The app guides our SPS® self-powered work platform to precise locations so you can set out the right number of ties right where they’re needed using the onboard excavator. It’s an ultra-productive process that reduces operating costs and maximizes your track time.

Tie Maintenance Solution • Aurora® 3-D track inspection • Tie Maintenance Optimization (TMO) app • SPS® self-powered work platform Contact a GREX representative today to start making your tie inspection and delivery process far more efficient. © GREX® 2014

GREX tie maintenance solutions

512.869.1542 www.georgetownrail.com

SPECIAL ADVERTISING SECTION

HERZOG RAILROAD SERVICES, INC. CHALLENGE: A common challenge faced by railroads is finding track time for maintenance.

A reoccurring theme of concern is crew safety. In order to battle both of these factors, Herzog Railroad Services, Inc., has developed a new machine to aid in the safety of employees and speed up the rail-laying process in order to accommodate those tight windows of opportunity.

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November 2014

SOLUTION: The Herzog Automated Tie Down Car is operated by remote control, removing the manual labor aspect of unloading rail, thus increasing the safety of crews on the job. With the turn of a knob and flip of a switch, the rail clamp is opened; the rail is then pulled and the process starts over again. The slip, trip and fall concern is removed and the time spent unclamping is cut down

from several minutes to just seconds.

An increase in efficiency is seen in the remote control operation of the clamps rather than manually removing and putting them back on. The clamps are operated by solar powered batteries with generator power for backup.

The Automated Tie Down Car use is recommended alongside the Herzog Rail Unloading Machine (R.U.M.), but can be used as a stand-alone unit.

SPECIAL ADVERTISING SECTION

TIMES HAVE CHANGED. HAVE YOU? We were the first to develop a safer and more efficient method of unloading rail in over 50 years.

Using our RUM and Automated Tie Down Car improves safety, saves valuable time, and increases the window of time to run revenue freight.

2005

RESULTS: The automation of the tie down car supports the railroad’s desire to reduce track and time needs and increase the window of time to run revenue freight, while getting the job done safer and more efficiently. The Automated Tie Down Car reduces ground personnel exposure to harm and increases safety of loading and unloading the rail through its innovative approach and state-of-the-art technology. Since founded in 1969, Herzog has strived to design equipment that provides our customers with safer alternatives to age-old problems. That was evident in the 70s with the Cartopper, in the 90s with the GPS trains, in the early 2000’s with the R.U.M. and, now, the Automated Tie Down Car.

1960

THE ADVANTAGES: — Reduces required work window — Remotely controlled — Increases the safety of unloading and loading rail — Reduces ground personnel exposure to harm — Rail clamps provide more holding power than standard manual tie down cars

Manual track unloading involved intensive manpower increasing peronnel to unneccessary risks and injury.

The Rail Unloading Machine (RUM) is introduced by HRSI. The RUM is designed to unload continuously welded rail from the rail train to both sides of the track. The RUM eliminates extensive manpower while reducing the risk of injury.

2012

The Safety and efficiency gains of the Automated Tie Down Car and R.U.M. will also lead to improvements in equipment utilization. Our ability to unload and load rail more efficiently will increase the amount of turns that can be made by a rail train and has the potential to allow the railroads to decrease the amount of rail trains and other rail unloading/loading equipment that they currently use.

HRSI debuts the Automated Tie Down Car. There is no longer a need to physically clamp and unclamp rails making this once manual process much safer. Clamps are remote control operated rather than manually removing and putting them back on.

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November 2014 RAILWAY AGE 19

SPECIAL ADVERTISING SECTION

NORDCO SE HAMMER: MAINTENANCE MADE SIMPLE The SE Hammer was engineered with field maintenance in mind. With incredible visibility and simplified components, the reliable SE Hammer is easy to maintain and incorporates new safety and comfort features developed with user workflow at the top of mind.

The SE Hammer was designed to work the way you do. Mechanics appreciate the piping layout that includes a common gallery, shorter hoses, highly-visible and simplified hose routings and less fittings.

User-friendly hydraulic and electrical system plaques clearly identify parts and their associated part numbers for easy replacement part ordering. The proportional mobile equipment valves, unlike industrial DO3 valves, are much smaller and have far fewer potential leak points.

The quick-change anvil ensures swift and simple anvil change outs in the field.

DESIGNED FOR SAFETY & COMFORT The SE Hammer was specifically designed with operator ergonomics in mind. A completely redesigned frame and component layout result in superb visibility. Operators appreciate the larger front windows, the raised operator seat and the clear sight lines across the top of the engine, hydraulic and electrical systems. Additionally, the air conditioning unit faces the operators, providing cooling comfort on hot days.

The raised operator seat and the table-style CANbus control system give the operator more access to operational controls from the seated position, making it easier and faster to not only perform initial setups, but to respond to environmental changes as they arise, such as curves or changes in rail height. New transducers in the up/down cylinders replace proximity switches for the easy adjustment of cylinder ready heights. For more information, please visit www.nordco.com.

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FOUR PATHS TO NATURAL GAS

LNG or CNG? At the High Horsepower Summit in New Orleans, four newer players in the natural gas-powered-locomotive field described their plans.

By WILLIAM C. VANTUONO, Editor-in-Chief

B

ased on the strong attendance at rail-related presentations at the 2014 High Horsepower Summit, hosted in New Orleans by Gladstein, Neandross & Associates, interest in LNG (liquefied natural gas) or CNG (compressed natural gas) as a cost-effective alternative to diesel fuel is high. While BNSF, Union Pacific, and CN pursue blended-fuel technology (LNG plus a small percentage of diesel to initiate compression ignition) with EMD and GE Transportation (RA, September, p. 28), others are pursuing somewhat different strategies.

At HHP Summit 2014, Norfolk Southern, CSX, Indiana Harbor Belt, and Farmrail revealed their plans for natural gas.

NS: CNG MOTHER-SLUG

“Natural gas is one of those things you can’t ignore,” said NS Manager-Locomotive Engineering Allen Rider. “Is a huge fuel cost savings possible, or is this just a flash in the pan? NS has opted for a CNG-powered mother-slug locomotive set, with a spark-ignited engine, and fuel storage on the slug. “This will be based on our successful GP40-2 and RP-E4C design,” said Rider. “The slug’s engine area is usually filled with ballast for weight, so it’s an ideal spot for CNG cylinders.”

The mother is an EMD GP38-2, NS no. 5053. “The gas lines are installed, and we’re working on wiring and electronics. Our expected completion is Dec. 1, 2014,” said Rider. The CNG engine is a roots-blower-equipped EMD 16-645E modified with an ECI (Energy Conversions Inc.) Spark Ignited Prechamber kit.

In the slug, eight type-1 steel CNG cylinders, 24 inches wide by 22 feet long, provides 1,025 DGE (Diesel Gallon

Above: Built on a GP-50 frame, Norfolk Southern’s slug, no. 700, is equipped with eight type-1 steel CNG cylinders, 24 inches wide by 22 feet long, providing 1,025 DGE storage @ 4,500PSI.

Equivalent) storage @ 4,500PSI. The slug, NS no. 799, is built on a GP50 frame, with NS’s new-design, crashworthy “Admiral Cab.” “Our first priority will be emissions testing at Altoona,” said Rider. “The FRA has seen the unit, and has provided a positive response. We’re about to start the formal request process for FRA testing approval. Initial operational testing will be in the Altoona region, followed by a metropolitan area, possibly Atlanta, Pittsburgh, or Chicago.”

NS, said Rider, “sees this concept as an alternative low-emissions solution. We have 50 new EMD 4,300-hp SD70ACes coming in the fourth quarter with dual-fuel natural gas provisioning. It’s likely that two will be fully equipped for DGB (Dynamic Gas Blending) in 2015. We’ve written a specification and issued a request-for-quotes for a prototype CNG tender and compressor system. We’re looking for 5,000 DGE minimum capacity, 90-minute fill time, and crashworthiness. With CNG, the tender and compressor technology need to be closely matched.”

Why CNG? Explained Rider: “CNG is about $0.50 to $1.00 lees per DGE than LNG. Our shorter corridors— Chicago–New Jersey, 875 miles; Chicago–Atlanta, 744 miles, Atlanta–New Jersey, 847 miles, or Chicago–Jacksonville, 1,095 miles—favor CNG. No glycol heating loop is needed. There are no concerns about storage time. CNG is not cryogenic, thus it may be perceived as safer, and can be odorized. CNG needs a November 2014 RAILWAY AGE 21

HIGH HORSEPOWER SUMMIT

large compressor system, rather than a liquefaction plant.

Railroad personnel can operate and maintain the compressors, and the infrastructure easier to build and scale up.”

“On the other hand,” Rider said, “truck to locomotive DTL (Direct to Locomotive) fueling is impractical. We will need to build CNG infrastructure right away. A larger-scale operation favors LNG. CNG fill times are longer, even with advanced technology, and interchangeability with other railroads may be a problem. We’re certainly not ruling out LNG, but CNG is an option worth seriously investigating.”

CSX: NUMEROUS CONSIDERATIONS

“Our initial estimate for the fuel cost differential, or savings, is about $400 million of our $1.6 billion annual fuel expense,” said CSX Director Locomotive Engineering John Rimer. “While this is substantial, a very sizable capital investment is required to capture the savings. We are working to understand the magnitude of the capital investment. Also, some experts believe that there is a risk that the spread between oil and natural gas could decrease, from either rising gas prices or lower oil prices. Therefore, we will be very focused on various mechanisms to decrease that risk.”

Rimer also noted that the potential exists to further reduce CSX’s environmental footprint through the use of natural gas.

Safety concerns “are being evaluated,” said Rimer. “The

properties of LNG do not present a deterrent to continued evaluation as a railroad fuel, but it does change CSX’s risk profile. LNG quickly evaporates and is colorless and odorless, so methane (gas) detection is needed to prevent asphyxiation and/or fire. Though LNG has outstanding safety record over past 50 years in ships and trucks, rail poses a very different operating environment with different challenges. We’re working with the AAR, FRA, and LNG safety experts to better understand the safety implications of transitioning to LNG, as there are still a lot of unknowns.”

Will the spread between natural gas and diesel justify the costs of a widespread conversion?, or make sense only in select locations? “The costs of converting are very high and rising,” said Rimer. “This includes tender cars and locomotive retrofits, retrofitting locomotive servicing facilities, and LNG fueling infrastructure. Operational transition—locomotive dispatch, fueling and repair—will be difficult. Availability of fuel, tender cars, and locomotives and/or retrofits will be vital.”

“We will continue to advance our partnership with GE on dual-fuel technologies,” said Rimer. “We are also investigating the availability and feasibility of other technologies evolving in the industry. LNG fuel Supply and equipment is likely to be available in 2017. This includes new fuel supply sources through existing facility expansions and new small- to midscale facilities. We expect to see multiple configurations of

W o r l d ’s L a r g e s t C r a n k s h a f t M a n u f a c t u r e r a n d R e - M a n u f a c t u r e r

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HIGH HORSEPOWER SUMMIT

dual-fuel locomotives and retrofit kits both for CNG and LNG applications. If we continue to more forward with natural gas, it will be in a measured fashion. Our focus will be on LNG for high-fuel-burn moves, on CNG and/or LNG for short closed-loop cycles and yard operations, and at locations in close proximity to fuel supplies and repair facilities.”

IHB: TOTAL FLEET CONVERSION

On the Indiana Harbor Belt, 31 of the railroad’s 46 locomotives are funded for conversion to natural gas. “IHB is committed to moving our entire fleet to CNG as the primary fuel source,” said Director of Purchasing and Project Manager Michael Nicoletti. “This is not a pilot project—it’s the first planned fleet-wide conversion to occur in the nation. Our program begins in 2015 and is projected to end in 2019. We believe we can reduce our annual PM (Particulate Matter) emissions by 97%, and cut greenhouse gas emissions by 50%.”

IHB’s program is funded through a CMAQ (Congestion Mitigation/Air Quality) grant subsidized by the Chicago Metropolitan Agency for Planning (CMAP), USDOT, US EPA, and the states of Indiana and Illinois.

“Railroad industry experience with CNG is very limited,” said Nicoletti, “so we’ve sought out natural gas experts from the energy field. We’re engaged with locomotive vendors for

creative solutions, which will not include a fuel tender car.

As well, FRA has been actively engaging us in this first-inthe-nation implementation.”

FARMRAIL: COMPREHENSIVE ASSESSMENT

Farmrail System Inc.’s Short Line Locomotive CNG Fueling Program “is meant to verify the freight operation reliability of CNG,” according to Alternative Fuels Specialist Leslie Olsen. “We’ll be evaluating locomotive and fuel availability, extended mean days between failure, and if power and maintenance are comparable with diesel. The Oklahoma DOT encourages natural gas for transportation fuel, and we’re an existing ODOT partner.

Farmrail’s program, which is focused on minimize diesel usage, will involve an assessment of economics, engine technology, fuel and employee safety, operation and maintenance rules, and public safety. The railroad is developing a guidebook for this purpose. Like IHB, Farmrail does not want to operate with a fuel tender, and as such is looking for onboard CNG storage. “We’re researching a spark ignition conversion of an existing EMD engine,” said Olsen. “There is one source for current-engine retention, ECI, with 10 years of proven safe operation on the Napa Valley Wine Train. ECI’s fuel storage design provides 600 DGE, and its EMD conversion technology is reliable over 25 year-period. RA

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New Construction | Rehabiliation | Inspection, Maintenance, Emergency Response | Signals & Crossings | MOW Services | Bridges North America’s leader in Track and Transit & Systems construction and maintenance services November 2014 RAILWAY AGE 23

Norfolk Southern (pictured) and BNSF are the two largest haulers of intermodal traffic.

BIG-BOX BONANZA

Railroads are searching for ways to keep intermodal moving, and growing, on a capacity-constrained network.

24 RAILWAY AGE November 2014

because the market is larger, less developed, and in the truck-competitive distance range.”

“To sustain current intermodal growth, the railroads need to invest $200 million to $350 million annually just in new terminal facilities,” says Kuehn. “The recent 4% growth rate suggests that carriers will likely need to construct at least two new terminals per year, based on growth of 700,000 units per year.

Supporting a growth rate of double the change in GDP (an estimated 7%), would require constructing three to four new terminals per year, at a cost of $360 million to $600 million annually, based on growth of 1.2 million units per year.”

The key to success in intermodal operations is velocity, and there’s more than one way to move a box. The corridor model of Norfolk Southern, the hub-and-spoke model of CSX, the Vancouver-Toronto-Montreal model of Canadian Pacific, or the Transcon model of BNSF, for example, allow these railroads to build operating plans around scheduled arrivals and departures between specific origins and destinations. Unit trains—grain, crude oil, frac sand, etc.—run in the time slots between the scheduled trains.

Norfolk Southern

I

ntermodal is the fastest-growing freight sector for railroad industry traffic and revenue growth. In 2013, the U.S. Class I roads originated 12.8 million units worth $16.5 billion in revenue, surpassing the record peak volumes of 2006, 12.3 million units and revenues of $8.8 billion.

The Association of American Railroads recently reported that intermodal surpassed coal in revenue dollars as a percent of the whole, 23% to 20%.

“Rail intermodal growth drivers are projected to include long-haul and medium-haul domestic traffic and short-haul international traffic,” says Jason Kuehn, vice presidentSurface Transportation at Oliver Wyman. “Intermodal volume growth is trending slightly higher than Gross Domestic Product, tracking in the low single-digits for the past three years (2010’s double-digit growth represented a one-off volume rebound following the most recent economic recession). For BNSF and Norfolk Southern, the two largest intermodal rail carriers, intermodal now represents nearly 50% of traffic volume. Rail intermodal has grown much faster recently in the eastern U.S. than in the western U.S.

By ROY H. BLANCHARD, Contributing Editor

All of this is dependent upon having strategically located terminals and enough line-of-road capacity.

Union Pacific’s new Santa Teresa Intermodal and Fueling Facility on the Sunset Corridor in New Mexico is a good example. UP opened Santa Teresa, a 2,200-acre site 13 miles west of El Paso and 760 miles east of Los Angeles, in May, one year ahead of schedule. In addition to serving through intermodal trains, this $400 million “inland port” lets UP transfer some of its fueling and maintenance operations out of the crowded El Paso-Ciudad Juarez metroplex.

One mile wide and 12 miles long, Santa Teresa can handle 250,000 lifts a year (currently, about 80,000 containers per year are crossing the nearby Mexican border), and sports a four-track fueling station for through trains. In short, the Santa Teresa facility gives containers a critical off-ramp someplace other than in the middle of a city and permits block-swapping among trains (meaning more O/D pairs for intermodal containers).

CSX officially opened its new Central Florida Intermodal Logistics Center (ILC) in Winter Haven on Oct. 16. The facility, which began operations earlier this year, provides a centralized hub for transportation, logistics, and distribution serving Orlando, Tampa, and other regional Florida markets.

The result of a collaboration of the City of Winter Haven, numerous state and local partners, and CSX, the 318-acre intermodal terminal has capacity to process up to 300,000 containers a year and is designed for scalable expansion as freight volumes continue to grow. The terminal incorporates advanced, environmentally friendly technology, including

three high-powered electric cranes, solar panels, and highmast exterior lighting to maximize energy efficiency. ILC is surrounded by 930 acres that are being developed in phases to build up to 7.9 million square feet of warehouse distribution centers and light industrial facilities. In July, Winter Haven Industrial Investors LLC purchased more than 500 acres of the adjoining property for phase one of the industrial development program.

CSX opened its $175 million, 200-acre Northwest Ohio Terminal in February 2011, in North Baltimore, Ohio, about 40 miles south of Toledo, near the junction of the former Baltimore & Ohio and New York Central main lines, both now CSX. The facility’s hub-and-spoke design connects with core CSX routes, and its easy access to I-75 has created more than 125 new intermodal lanes representing 20% of CSX’s total volume growth. More than 30 trains a day undergo block-swapping and container classification on about 124,000 feet of track, reducing yard holdouts and improving locomotive and crew turns and equipment cycle time.

Norfolk Southern’s 250-acre Rickenbacker Intermodal Terminal in Columbus, Ohio, located at the 1,300-acre Rickenbacker Global Logistics Park, provides shippers with access to Midwest markets, as well as increased terminal capacity and enhanced service, including direct intermodal rail services to/from Norfolk and the Chicago gateway for movement to/from the West Coast. The terminal also features an Automated Gate System to expedite draymen in and out of the facility and improve the equipment inspection process; increased parking capacity and a terminal layout that November 2014 RAILWAY AGE 25

INTERMODAL

improves equipment flow; and close proximity to shippers and receivers in one of the fastest growing distribution hubs in the U.S. Rickenbacker was the first new NS intermodal terminal on the Heartland Corridor.

“We know that roughly 80% of all intercity truckload

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percentage of that motor carrier volume. We know customers prefer using rail networks, and that’s what is behind our decisions to go into New England, the Ohio Valley, or even Mexico. That’s why we’re adding 34 new intermodal lanes, including 18 in and out of Mexico.”

Norfolk Southern

Another winter of discontent?

The severe cold and snow during the 2013-2014 winter created havoc with operating plans. Jim McClellan, the nowretired senior vice president for Planning at NS, accurately calls January-February 2014 “the winter of our discontent.”

For example, in January, CN’s system-wide average intermodal train speed dropped to 24 mph from 31 in November 2103. Dwell times at Winnipeg had reached as high as 76 hours. With temperatures well into negative double-digits, air brake propagation limitations led to shorter trains, more crews, and more locomotives to run the same number of carloads. Trains thus ran slower, leading to fewer car-miles per day, and missed yard connections. Congested yards led to trains being held out on the main lines, filling up passing sidings. Most of the CN in Western Canada is single-track, so yard holdouts take their toll on every kind of freight train, including intermodal, as well as passenger trains (such as VIA Rail’s premier long-distance train, the Canadian).

Last winter’s congestion, record grain harvests, the growth of crude oil traffic, and increased demand for intermodal services due in part to a severe truck driver shortage have combined to keep the railroads scrambling for capacity. And even though an operating plan can be crafted around scheduled intermodal and manifest trains, large numbers of oil, coal, and grain unit trains will impact even the best-laid plans.

Railroads are not naturally nimble networks, so creating and sustaining fluidity will require considerable outsidethe-box thinking, especially for managing another winter of discontent. RA

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As of Sept. 20, 2014, BNSF had moved 1.63 million coal loads year-to-date, an increase of 0.67% over 2013.

IS COAL ON A COMEBACK?

I

t seems like yesterday that railroads were crying the blues over sharp losses in one of their chief business sectors, coal. U.S. Class I railroads originated a record 7.71 million carloads of coal in 2008, but that figure dropped to 5.95 million carloads in 2013, the lowest level in 20 years. Much of this decline occurred as power plants switched from coal to natural gas—or shut down completely—in the wake of stricter federal air quality standards. After a decade in which America’s use of coal exceeded one billion tons annually, consumption dropped to less than 890 million tons in 2012, according to the U.S. Energy Information Administration.

But while coal usage was entering its downturn in the U.S., exports of U.S. coal made noticeable gains, rising from a mere 40 million tons in 2002 to an all-time record 126 million tons 28 RAILWAY AGE November 2014

exported in 2012. The majority of that export growth, says the EIA, was in thermal coal. China is still the world’s leading coal consumer. Europe is also increasing its demand, as a hedge against uncertainty with natural gas supplied by Russia, and as a means to phase out some of its nuclear power plants.

That strong global market, plus a more stabilized domestic market, became more apparent on U.S. railroads during 2014, with monthly coal carloads increasing by as much as 6% over the previous year. Several international trends are helping to drive that business. In 2009, China went from being the number three coal exporter to being a net importer, taking in 126 million metric tons that year, and more than 320 in 2013. So far, the U.S. has played a minor role in China’s coal imports compared to Australia and Indonesia. However, Asia is where most of the world’s new

Bruce E. Kelly

With utility losses stabilizing and global demand still strong,

By BRUCE E. KELLY, Contributing Editor carloads are edging upward.

COAL

demand for coal has appeared in recent years, and with coal now producing only 38% of the electricity in the U.S. but 81% in China, it’s no wonder mining companies and railroads in the U.S. are working to make their supply lines more competitive in the Pacific Rim. A decline in manufacturing has slowed China’s demand for metallurgical coal, while predictions for its need of thermal coal have been all over the chart. But some reports have suggested that China’s newfound campaign against air pollution is leading to investment there in renewable energies, which could result in less demand for coal. Beginning January 2015, the toughest of China’s new rules will apply to its coastal areas and northern cities, where coal must not exceed 16% ash and 1% sulfur content.

Bottom line: Anyone who has judged the viability of coal by its downward trajectory among some (but not all) American utility companies is not looking at the big picture.

Which brings us to the Powder River Basin. Having some of the lowest ash and sulfur content on the planet puts PRB coal in high demand for power generation at home and abroad. That includes China, where the new 1% limit on sulfur content can easily be satisfied by any of the PRB mines, whose sulfur content is mostly in the 0.3% to 0.5% range.

Getting PRB coal to China and the rest of the Asian market has been the challenge. The only coal export terminals currently operating on the West Coast are in California, but their throughput is miniscule compared to coal terminals on the Atlantic and Gulf coasts. Opening new coal terminals in Washington and Oregon was thought to be the simple solution, especially since both states already have unit train export or offloading facilities for grain and other bulk products. But efforts to develop coal ports in the Northwest have been hindered by opposition from environmental groups.

Of the various port plans, the one that came closest to reality was Ambre Energy’s rail-to-barge terminal at Port of Morrow in Boardman, Ore. After offloading from unit trains at Boardman, coal would travel some 200 miles by barge down the Columbia River to an export terminal just beyond Portland. In February 2014, the Oregon DEQ approved Ambre’s permits for air and water quality. But in August 2014, Oregon’s Department of State Lands denied the Boardman project over concerns for tribal fisheries on the Columbia River. The region’s two remaining coal port projects, both in western Washington, currently hang in limbo, with all parties involved wondering “what next?”

One answer came on Aug. 21, when Canada’s Port Metro Vancouver approved a new $15 million rail-to-barge coal terminal on the Fraser River at Surrey Docks that is expected to begin receiving PRB coal via BNSF by late 2015. Barges will float coal to a ship-loading facility on Texada Island in Canada’s Straight of Georgia. Fraser is expected to handle two million metric tons of coal in the first year of operations, increasing to four million within two years.

BNSF and predecessor Burlington Northern have hauled export PRB coal through Canada for a quarter century. The

main terminal of choice has been at Roberts Bank, just outside Vancouver, which now ships well over 30 million tons of coal annually, more than 40% thermal, at an average rate of two trains per day.

During a spike in Asian demand in 2011-12, additional PRB coal was shipped through Prince Rupert, B.C. BNSF interchanged Prince Rupert-bound coal trains to CN at Thornton Yard, B.C.; and to Canadian Pacific at Sweetgrass, Mont./Coutts, Alta. From Coutts, CP forwarded PRB coal north to a CN connection at Edmonton.

MINE TO PORT EFFICIENCY

While coal producers and shippers have sought to develop new export terminals, BNSF and Montana Rail Link have looked for new ways to maximize efficiency in moving coal from mine to port. In Montana, variations in the number and placement of locomotives assigned as head-end and distributed power were tested, along with determining the right balance of manned helper power on steep grades over the Bozeman and Mullan passes. In Washington, BNSF took another look at its three route options for moving coal westward from Spokane.

The two shortest routes cross the Cascade Mountains using 2.2% grades on Stevens Pass and Stampede Pass, while the longest route—adding more than 280 miles to the trip— follows much easier grades along the southernmost edge of the state. BNSF tested loaded grain trains over both Cascade passes using a combination of head-end, DPU, and manned helper power during 2008-09, but concluded it was more practical to run high-tonnage unit trains the long way around with fewer locomotives (sidebar, p. 21).

With more coal, oil, and other traffic moving north of Seattle, BNSF plans to add at least four miles of siding or second main track between Bellingham and Blaine, Wash., on its line approaching the Canadian border. Those improvements are scheduled to begin in 2015, but in the meantime, BNSF has other track work under way on the Blaine route, and that has prompted the company to detour a number of its empty coal trains over a nearby secondary route that drops down from the Canadian border through Sumas, Wash.

BNSF is also working to alleviate concerns about coal dust being released during transit. Plans have been announced to build a coal re-spray center at Pasco, Wash.—a voluntary measure responsive to a request from Port Metro Vancouver as part of its permitting process for coal export facilities located in British Columbia. The center will be enclosed, and there will be no run-off. BNSF expects the center to be operational by late 2014.

The vast majority of coal from the PRB and other regions still moves east or south toward generating plants and export terminals elsewhere. As of Sept. 20, 2014, BNSF had moved 1.63 million coal loads year-to-date, an increase of 0.67% over 2013. UP had moved 1.25 million YTD, a 2% increase.

At Norfolk Southern’s annual Investor and Financial Analyst Conference in September, Vice President Coal David Lawson said, “We believe the largest known headwinds are behind us, November 2014 RAILWAY AGE 29

COAL

as we saw this past winter how quickly the market can turn in coal’s favor.” Lawson pointed out that powerplant closures since 2010 “have impacted our utility volume 12 million tons to-date,” but that the remaining impact by the end of 2015 will be a loss of only two million more tons. NS moved just under 50 million tons of utility coal in the first half of 2014, putting it on track to mirror 2013’s total of nearly 100 million tons. Lawson predicted that export coal appears headed for only a mild recovery in 2015, but that global supply and pricing should spur stronger growth in 2016.

“Over the next two years, we will be building 1,500 additional coal cars for replacement,” said NS Vice President Strategic Planning John Friedman. “As Southeastern utilities have increasingly turned to the Illinois Basin [ILB] as a costeffective fuel source, demand for our services out of the basin has increased. We’ve mostly seen that traffic coming eastward on our line out of St. Louis.” On a 20-mile segment of that line, Friedman said, “We identified three projects—a siding, a siding extension, and two radio-controlled switches leading to a major mine—that will produce the greatest bang for the buck.” NS CEO Wick Moorman said, “We have been talking about a shift to ILB coal sourcing for Southeast and Mid-Atlantic utilities for a number of years. And we got something of a head start as we have really seen that shift start to take hold in a meaningful way in the past 18 months.”

Indeed, ILB coal went from being 8% of NS’s coal business in 2010 to 20% in 2014. Appalachian mines still account for 64% of the coal moved on NS. Coal traffic for domestic power generation is performing admirably for CSX, which said it is seeing “robust growth spurred by a macro economy that continues to expand. For domestic coal specifically, after a brutally cold winter and a cooler than normal summer, we are seeing inventories just around normal or a bit higher. As a result of the stockpile drawdown, as we look into 2015, domestic coal demand will be predominately impacted by natural gas prices. Half of our portfolio is ILB and PRB coal, up from about 25% in 2010, and we expect that proportion to continue to grow. If natural gas is at or above $3.50, we’ll see those coals dispatched. ILB coal is growing both in tonnage and as a percentage of our portfolio, so we’re investing in a handling yard in Kentucky to stage and inspect unit trains. We saw 15% growth in domestic coal in the second quarter and expect to again see doubledigit growth here in the third quarter.” However, for export coal, CSX expects to ship somewhere in the mid-30-millionton range in 2014, down from 44 million tons in 2013.

There are mixed signals for coal’s future. But numbers for the tonnage moved by rail, consumed by utilities, and exported indicate there is stability and growth potential for a commodity that many thought was down for the count. RA

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COAL

BREDENBERG: WHY BNSF CHOSE THE LONG WAY AROUND THE MOUNTAINS With two shorter routes available over the Cascade Mountains to reach western Washington, why does BNSF choose to move export coal via a longer route that swings down along the state’s southern edge?

It’s more than just a matter of river running vs. mountain climbing, as Vice President Capacity Planning and Operations Research Rollin Bredenberg describes.

RA: If Montana Rail Link can move loaded coal and grain up the 2.2% grade of Mullan Pass in Montana, why does BNSF not do the same via the 2.2% grades over the Stevens or Stampede passes in Washington?

BREDENBERG: Stevens Pass is constrained by the capacity through the Cascade Tunnel. If we cut in helpers to get the coal loads west of the tunnel, we would have to run them all back east. Each of these eastbound light helper moves would take up capacity on the subdivision. Intermodal and merchandise trains scheduled over the Columbia River (Spokane-Wenatchee) and Scenic (Wenatchee-Seattle) subdivisions take priority. We then fill to capacity

with train volume consisting of empty coal and crude oil trains coming from the Bellingham subdivision.

RA: So by route structure, MRL has no choice but to move coal over its 2.2% grade, while west of Spokane, BNSF can choose to avoid 2.2%? And having a few more slow, heavy trains moving on the Stevens Pass route, with its tighter traffic capacity, would pose unacceptable interference against intermodal?

BREDENBERG: Exactly.

RA: Other factors are increased costs for locomotives, fuel, and helper crews to lift trains over the Cascades. But at the same time, running the longer circuit via Pasco, Wishram, and Vancouver, Wash., introduces added costs in the form of more crew districts. Do the savings in fuel and power utilization make those extra crews a non-issue?

BREDENBERG: Locomotives are a constraint. But, longer running time and increased crew and fuel costs wash out the locomotive advantage if all resources (line capacity and locomotives) are not constraints.

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TTC GOES LOW-FLOOR

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unday, Aug. 31, 2014 was an historic day for both Toronto and the Toronto Transit Commission (TTC), as the first two Bombardier-built Flexity five-section low-floor LRVs entered service on the Spadina Line.

A morning ceremony was held at the northern terminus of the route, Spadina Station, with TTC CEO Andy Byford presiding. Byford mentioned the many new features of the cars, including greater carrying capacity, air conditioning, and accessibility for physically challenged passengers. He also praised the “dedicated and resourceful Commission employees who had worked very hard to provide the cars for service.”

Representatives of the municipal, provincial, and federal governments, the TTC’s funding partners, were present.

The TTC ordered 204 of the cars in 2009. Bombardier Transportation and Siemens Mobility had been the two bidders, with Bombardier winning on the basis of price and a fully compliant bid.

It proved necessary to modify the cars’ design to meet TTC operating requirements for the system’s 11-route, 51-mile system, which carries 87 million people annually

32 RAILWAY AGE November 2014

(280,000 daily). The Toronto system is a mature traditional streetcar operation, featuring curves as sharp as 36-foot radius, with the average being 45-to-50 feet. Climbing ability was also a consideration, as there are grades as steep as 8% in certain locations.

Construction is taking place at the company’s plant in Thunder Bay, Ontario, some 700 miles northwest of Toronto.

Bombardier and its predecessor companies, among them Hawker-Siddeley Canada, have been the sole supplier of TTC subway cars and streetcars since the mid-1960s.

TTC is the first North American operator to buy the Flexity LRVs; they are also in service in Austria, Belgium, France, Germany, and Spain. Nearby Kitchener-Waterloo, Ontario, has ordered them for its LRT line, currently under construction. Metrolinx will operate the car on Toronto’s Eglinton Crosstown LRT line, scheduled for a 2020 opening.

The Waterloo and Crosstown vehicles will be double-ended; the TTC’s are single-ended, reflecting the availability of loops at line terminals. Multiple-unit operation is not provided for; the TTC last operated MU PCCs circa 1976.

Toronto Transit Commission

As debate continues over Toronto’s future focus on rail transit modes, Bombardier Flexity equipment begins giving city streets a new look.

By JOHN D. THOMPSON, Contributing Editor

TORONTO

The Flexity equipment will, by about 2018, completely replace the existing fleet of Canadian Light Rail Vehicles and Articulated Light Rail Vehicles (ALRVs). These cars, delivered in the late 1970s and 1980s, respectively, totaled 196 and 52.

The ALRVs will be the first to be retired.

At present the new cars draw traction power via trolley poles, but they come equipped with pantographs. After the overhead system is completely modified to accommodate them, the pantographs will come into 100% usage. These cars also employ modular wiring connectors (sidebar, p. 20).

The accessibility ramp is located at the second set of doors.

It is controlled internally by the vehicle operator at platform stops; externally, for on-street deployment. It may only be deployed when the door is closed. It was necessary to alter existing passenger boarding platforms, not only for the ramp, but also to accommodate the Flexity’s 90-foot length (compared to the existing ALRV’s 75-foot length). An enclosed cab has been provided for operators, for safety and security reasons.

Given that much of the electrical and control equipment of the Flexity is located on the roof, special facilities are needed for maintenance. A new purpose-built carhouse is being constructed on Leslie Street, in Toronto’s east end, to service the new cars. This facility will have the ability to perform major overhauls, as the existing 90-year-old Harvey

TTC FLEXITY VITAL STATISTICS SEATING CAPACITY: 70 STANDING CAPACITY: 181 DOORS: four LENGTH: 30.20 meters (99 feet) WIDTH: 2.54 meters (8.2 feet) HEIGHT: 3.84 meters (12.6 feet) WEIGHT: 53.13 tons MAXIMUM SPEED: 70 kph (45 mph) MOTORS: AC, 105 KW continuous, one motor per axle, six per car CONTROLS: VVVF, air-cooled power converter TOTAL COST: $1.186 billion for 204 vehicles (overall project cost)

(formerly Hillcrest) shop essentially cannot accommodate them. It is expected that Leslie Carhouse will be ready to accept Flexity equipment by mid-2015. Meanwhile, the new cars are being operated from west end Roncesvalles Carhouse, also constructed in the 1920s. It has received a two-track addition to service them. RA

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TORONTO

BOMBARDIER FLEXITY FLEET TAPS HARTING CONNECTORS

Among its many supplier partners, Bombardier Transportation has turned to Elgin, Ill.-based Harting Inc. of North America for connector technology on the subway cars, light rail vehicles, and streetcars Bombardier’s Thunder Bay, Ontario, plant is producing for Toronto Transit Commission (TTC). Harting connector

technology is being built into TTC’s 204 streetcars and 182 LRVs. “With connectors, the power, signal and communications systems can be disconnected and reconnected in minutes,” says Harting North America Senior Product Manager, Industrial Products Division Cory Jenkins. “Railway and transit vehicles tend to get multiple end-to-end overhauls and system upgrades during their decades-long service life. Consequently, connectors are economical, cost less to install, and reduce over-wiring.

“That’s an important design consideration where large amounts of wire and cables must fit in tight spaces under floors, or between ceiling panels or sidewalls and as

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operators add more sophisticated safety and train control technology and passenger information systems on board,” Jenkins adds.

The Toronto LRT and streetcar fleet will use Han-Quintax and M12 crimp connectors, and also high intellectual property (IP), all-weather rugged connectors to carry signal power and communications. LRVs will incorporate the stainless steel Han-Inox and aluminum diecast connectors for internal and external vehicle applications.

“For Harting North America, the Toronto LRVs are a marquee order for Canada and a high water mark in building its relationship with Bombardier on this continent,” says Jenkins.

People

Meetings

HIGH PROFILE TÜV Rheinland AG, parent company of TÜV Rheinland North America, has appointed Dr.-Ing Michael Fübi Chairman of the Executive Board, effective Jan. 1, 2015.

After finishing his studies in Dortmund and Aachen and obtaining a doctorate in engineering, Dr. Fübi initially worked in important positions at Babcock Borsig AG and since 2002 at RWE, where his roles included managing climate protection at RWE Power for a four-year period.In January 2010 he was appointed to the management of RWE Technology, where he Fübi has been Chief Executive Officer since 2012. RWE Technology TÜV Rheinland is responsible for project development and power plant construction in the RWE Group.Dr. Fübi is currently also the chairman of the Board of Directors of VGB Power Tech (European technical association for power and heat generation). Cologne, Germany-based TÜV Rheinland AGemploys 17,200 people worldwide, generating annual revenue of approximately $2.04 billion in 2013.

November 9-11

CALIFORNIA HIGH-SPEED RAIL AUTHORITY—Melissa DuMond appointed Director of Planning and Integration.

reporting to company CEO Peter Urquhart. Zach Hansen named National Sales Representative. Dana Head named Project Manager.

KANSAS CITY SOUTHERN— Lora Cheatum appointed Senior Vice President Human Resources for KCS’ primary U.S. subsidiary, The Kansas City Southern Railway Company (KCSR). Cheatum reports to KCS President and CEO David L. Starling.

Sam Schwartz Engineering (SSE) appointed Ken Sides, P.E., a Project Manager and Senior Transportation Engineer in the Civil Design group of the company’s Tampa, Fla., office.

NEW JERSEY TRANSIT— Gardner Tabon appointed chief of the corporation’s recently established Office of System Safety.

STV/Ralph Whitehead Associates named Dave Wyatt a Special Projects Senior Manager in the Rail Division, Atlanta office.

100 YEARS AGO in SUPPLIERS HDR named Norma De La GarzaNavarro as its Central Texas transit lead, based in San Antonio.

Parsons Brinckerhoff named Randy Hubler Manager of Contract Performance. Peter Torres named Senior Supervising Structural Engineer.

Both are based in New York.

Railinc Corp. elected Michael J. Naatz, Senior Vice President Operations Support and Chief Information Officer at Kansas City Southern (KCS), to its Board of Directors.

Rocla Concrete Tie Inc. named Eliseo Bandala Executive Vice President,

ASLRRA Central Pacific Region Worthington Renaissance Hotel, Fort Worth, Tex. Email: jbourque@aslrra.org; Website: www.aslrra.org

November 17-19 National Industrial Transportation League Annual Meeting: “The Road Ahead” Greater Fort Lauderdale/Broward County Convention Center, Fort Lauderdale, Fla. Tel.: 703-524-5011; Email: info@nitl.org; Website: www.nitl. org/annual.htm

November 26-28 SmartRail Asia BITEC, Bangkok, Thailand.

Tel.: +44 (0)20 7045 0916; Email: Stephen.scott@ globaltransportforum.com; Website: www.SmartRail Expo-Asia.com

January 7-10, 2015 2015 NRC-REMSA Exhibition Westin Diplomat Resort & Spa, Hollywood, Fla. Tel.: 202-715-2920, -2921; Email: soucie@remsa.org, or cbaker@nrcma.org; Website: www.nrcma.org/form3.cfm

January 15-16, 2015

(NOVEMBER 1914) B&O CIRCULAR ON TOBACCO The Baltimore & Ohio, by a circular which has been issued to station and employees and others who come in contact with the public, calls attention to the inelegance of using tobacco during working hours. It is believed by the management that a man using tobacco while at work renders inferior service. In larger stations and behind ticket counters the employees are required to refrain from using tobacco, and the same is also true for passenger trainmen; but the circular is an appeal to personal pride rather than mandatory.

11th Annual Southwestern Rail Conference: “Trains — Driving the Texas Economy” Holiday Inn Park Cities/SMU, Dallas, Tex. Tel.: 214=522-5525; Website: http://tms.us/tra.html

February 18-20, 2015 International Railway Summit Co-sponsored by International Railway Journal and International Rail Infrastructure and Technology Summit (IRITS) Barcelona, Spain Tel: +44 1326 313945; Email: hello@irits.org; Website: www.railjournal.com November 2014 RAILWAY AGE 35

Products RECo SwitchMode Charger offers fivefold choice The Railway Equipment Co. (RECo) Switch Mode Charger (SMC) line, part of its Cragg Railcharger offerings, now comes in five models that differ in voltage and amperes.

By leveraging a switch mode power supply instead of a traditional method, the charger achieves up to 90% efficiency, resulting in lower operating cost. The unit is significantly smaller and lighter, accommodating space and ergonomic concerns. The chargers also include an SD card that logs current, temperature, and voltage, and is easy to install and maintain. By integrating remote monitoring capabilities provided by RRAMAC , railroads are able to monitor conditions in real time, resulting in greater system reliability. The charger currently is in service on three North American Class I railroads. All RECo products are manufactured in Baylord, Minn. For more information, call 763-972-2200, or visit www.rwy.com.

RECo chargers are available in five models. All are made in the U.S.

Oil Eater Original makes for quick cleaning work Eco-friendly Oil Eater Original is a cleaner/degreaser that is formulated to eliminate the need for multiple cleaning solutions and is ideal for equipment maintenance. The powerful, all-purpose cleaner quickly and safely removes grease, oil, and grime from engines, machinery, tools, concrete, asphalt,walls, and other areas and surfaces. The cleaner is water-based, non-flammable, biodegradable, and contains no acids, abrasives, or petroleum solvents.

It penetrates rapidly, rinses off easily, leaves no residue, and will not harm the skin. Available in 32 oz. spray and one-gallon bottles, 5-, 30-, and 55-gallon containers, and a 275-gallon tote. Sample available upon request. For information, 800-528-0334, or visit www.oileater.com.

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RAILWAY AGE

November 2014

Ad Index Company

Phone #

Fax

URL/Email address

Page #

Danella Rental Systems, Inc.

610-828-6200

610-828-2260

pbarents@danella.com

31

Ellwood Crankshaft & Machine

724-347-0250

724-347-0254

ecgsales@elwd.com

22

Georgetown Rail Equipment Co

512-869-1542 ext. 228

512-863-0405

karen@georgetownrail.com

16-17

Graham-White Manufacturing Co.

904-230-4525

904-230-4526

jkuhns@grahamwhite.com

10-11

Greenbrier Companies The

800-343-7188

503-684-7553

gbrx.info@gbrx.com

Herzog Railroad Services, Inc.

816-233-9002

816-233-7757

tfrancis@hrsi.com

Holland Co.

708-672-2300 ext.382

708-672-0119

gpodgorski@hollandco.com

Kelso Technologies

630-495-1151

630-396-9069

schwartz@kelsotech.com

LORAM

763-478-6014

763-478-2221

sales@loram.com

Midland Manufacturing

847-677-0333

847-677-0138

sales@midlandmfg.com

27

New York Air Brake

315-786-5431

315-786-5676

margaret.beck@nyab.com

C2

Nordco

414-766-2180

414-766-2379

info@nordco.com

20

Okonite Co.

201-825-0300

201-825-3524

info@okonite.com

3

ORX

814-684-8484

glenn@orxrail.com

C4

R&W Machine Division

708-458-4200

708-458-3299

jwarner@rwmachine.com

Railquip Inc

770-458-4157

770-458-5365

sales@railquip.com

33

Rails Co.

973-763-4320

973-763-2585

rails@railsco.com

31

Railway Educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

C3

RailWorks

866-905-7245

952-469-1926

jrhansen@railworks.com

23

Trackmobile LLC

706-884-6651 ext.229

706-884-0390

keithsellers@trackmobile.com

34

TTX Company

312-606-1450

felix.castillo@ttx.com

30

26 18-19 5 34 12-13

7

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 2014 RAILWAY AGE 37

PRODUCTS & SERVICES

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

EQUIPMENT SALE/LEASING

PROFESSIONAL DIRECTORY

Kansas City (913) 661-2424

www.rrtemps.com

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

TRAINING

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

Available For Lease ◆ Mill Gondolas – 52’ 6” interior length with 4’ 6” sides. ◆ 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 has been removed. ◆ Box Cars – 286K Gross Rail Load, 60’ 9” inside length, 12’ Plug doors.

For additional information and pricing, please contact John Goodwin PHONE (605) 582-8318 FAX (605) 582-8304 www.carmathinc.com

WAREHOUSE / RR TRACK SPACE

WARREN, OH - 200k sq. ft. fenced warehouse, with security. Will subdivide.

Site is on NS delivery location with 8,000 RR track feet (150-car storage capacity) available. Call 304-545-3123.

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RAILWAY AGE

November 2014

Available for Lease 3600 cu ft Open Top Hopper Cars 100 ton Automated/Manual Ballast Cars 4480 cu ft Aluminum Rotary Open Top Gons Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

EQUIPMENT SALE/LEASING

EMPLOYMENT

LOCOMOTIVE BATTERY “AMERICAN INGENUITY FOR A MODERN WORLD”

OR TOLL FREE 888.901.9987

AM ER IC AN

WWW.STARTPAC.COM

Plasser American Corporation Sales Representative

M AD E

• MAINTENANCE FREE • ONLY 795 LBS • • PATENTED TECHNOLOGY • • 64V, 1600 CCA • BUILT IN CHARGER •

Transportation Technology Center, Inc. provides our customers with effective and efficient railway research, consulting, testing, inspections, training and technical support. We have two immediate openings for a Wheel Expert and a Rail Expert.

These positions are responsible for conducting testing and analysis for commercial clients, the AAR, AAR member railroads, the FRA, and other government customers in support of railway engineering related projects. Will provide senior technical leadership for on-site and off-site projects both in North America and overseas, and plays a leading role in the research and testing of railway wheels or rail steels. Will assist engineering and project management for staff coordination, budgetary and technical issues.

Minimum qualifications include Bachelor of Science degree in Engineering or Physical Science with a minimum of 10 years of experience applying engineering principles or an equivalent combination of experience and experience. Must have knowledge of metallurgy with respect to steel physical and mechanical properties; must have experience in contact mechanics of wheel/rail systems; must be familiar with North American railway wheel and axle, or rail standards and their analysis methods; must have good understanding of solid and fracture mechanics; must be familiar with advanced FEM proficiency in 2D and 3D analysis. Excellent communication skills, both verbal and written, are a must, along with demonstrable analytical capabilities. Apply on the Career Opportunities page at: www.aar.com TTCI is an Equal Opportunity/Affirmative Action employer. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, disability, or protected Veteran status.

SEE THE FULL JOB POSTING AT RAILWAYAGE.COM JOB BOARD

GLOBAL RAIL TENDERS

AGM64RR (3.375in x 5in).indd 1

22/09/2014 10:03

Get up-to-the-minute business intelligence by subscribing to GlobalRailTenders.com

TURNING OPPORTUNITIES INTO NEW BUSINESS

Powered by

November 2014 RAILWAY AGE 39

Financial edge DAVID NAHASS

What makes TTX so successful?

P

otentially lost in the tidal wave of captivating news about oil and sand, tank, and covered hopper railcars was a noteworthy news item.

On Oct. 1, 2014, the Surface Transportation Board (STB) extended pooling authority for TTX for a variety of flatcars. including autorack cars, centerbeam flatcars (lumber), tie down flatcars (heavy equipment), and standard intermodal flatcars. STB granted a 15-year extension to the pooling authority after previously approving two decade-long periods dating back to 1994.

Why is this noteworthy? For years, prior to the boom in shale gas and oil, growth in the intermodal business was considered the great hope of North American rail. The term “Rail Renaissance,” coined by Rail Equipment Finance Conference (REF) (www.railequipmentfinance.com) veteran speaker Tony Hatch in the mid-1990s, was inspired by then (1990s) current and potential future (today and beyond) growth in intermodal loadings. This growth had the potential to allow the railroads to begin to earn a return equal to the cost of their capital for the first time since the Staggers Rail Act in 1980.

TTX Co. is the fulcrum of the intermodal business that has been leading the renaissance. Owned by its member railroads (the Class I railroads in North America), TTX provides railcars (mostly intermodal flatcars) to its members via the pooling arrangement recently recertified by the STB. Why is this successful? TTX allows the railroads to share assets (intermodal flatcars for example), optimize usage, and decrease the cost of ownership. As shippers of non-pooled assets will tell you, a pool solves potential utilization issues present in almost all other commodity types: the back-hauling of empty equipment at the expense of railroad efficiency (moving an empty car) and at the

40

RAILWAY AGE

November 2014

monetary expense of the shipper (paying a higher rate of transportation). Pooling generally can be more efficient than an “A to B” and “B to A” transportation cycle.

TTX owns or finances its equipment, which is used by the member railroads that, in turn, may share it with their customers (such as the auto manufacturers). The pooling arrangement allows the customer (railroads) to return or park excess TTX equipment on short notice (within 120 hours), allowing capital to be freed up from leasing and devoted to infrastructure projects.

That clearly benefits the members.

TTX Co. is the fulcrum of the intermodal business that has been leading a renaissance.

TTX’s business presence is not limited to flatcars. TTX has a presence in the boxcar market and the mill gondola market (mill gons primarily carry scrap steel). One knock against TTX has been that pooling is anti-competitive.

Historically, TTX is a long-term buyer of its rail assets and rarely a short term lessee. As TTX presents a stronger presence in certain markets (e.g., boxcars), owners of those cars may see the leasing markets soften.

Another objection is the exclusion of private lessors from TTX-operated pools. TTX can create a railcar pool and exclude private cars. Depending on fleet utilization and fleet composition, this

may decrease a private car owner’s revenue for cars in the general system.

Private car owners objected in 2009 when the matter was opened to comment. Their objections, rejected at the time, were one of the only obstacles to a reconfirmation of pooling authority of TTX in 2014.

I asked Tony Hatch and longstanding REF participant and intermodal expert Ron Sucik (RSE Consulting): How key is intermodal growth to railroad industry success and profitability, and how integral is pooling?

Said Hatch, “Innovation in intermodal service continues to drive growth and expansion. The focus for the railroads continues to be improving service and increasing growth in return on investment (ROI) through increasing rates.

Without some form of equipment pooling or free flowing assets, intermodal cannot provide the service necessary to deliver an acceptable ROI.” Sucik said, “Railroad investment in dedicated intermodal corridors (such as Norfolk Southern’s Crescent Corridor) has provided a service boost and makes intermodal a growth avenue for years to come. Pooling is a key component of that long-term strategy. Even though shipping petroleum is more profitable, intermodal is a huge percentage of total railroad revenue. Intermodal will continue to grow and take market share from motor carriers.”

A long-term secular growth story that maintains its relevance prior to the emergence of shale oil and gas is unusual.

The revenue consistency, potential for growth, and overall contribution to the railroad industry is stunning in its scope and scale. Driven by the pooling authority and a multitude of growth opportunities, railroad investors can expect to see the trend continue.

Questions? Set them free at dnahass@ railfin.com.

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

Reb Says...

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

Last Update Effective:

FRA Part #

Last Update Effective:

FRA Part #

Last Update Effective:

40 . . . . . . . . .10-3-12 209 . . . . . . . .2-12-13 210 . . . . . . . .8-14-89 211 . . . . . . . .7-20-09 213 A-F . . . . .3-25-14 213 G . . . . . .7-11-13 214 . . . . . . . . .7-1-14 215 . . . . . . . .6-25-12 216 . . . . . . . .6-25-12 217 . . . . . . . .6-25-12 218 . . . . . . . .6-25-12

219 220 221 222 223 224 225 228 229 230 231

. . . . . . . . .5-6-13 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . . .1-1-14 . . . . . . . .6-25-12 . . . . . . .12-19-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12

232 233 234 235 236 237 238 239 240 242

. . . . . . . .6-25-12 . . . . . . . . .9-2-14 . . . . . . .10-21-14 . . . . . . .10-21-14 . . . . . . .10-21-14 . . . . . . . .6-25-12 . . . . . . . .1-28-14 . . . . . . . .1-28-14 . . . . . . . .6-25-12 . . . . . . . .6-25-12

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

Item FRA 50 or Code Part # Each more

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

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

232

Brake System Safety Standards

27.50

9.95 8.55 9.50 7.25 9.50

8.95 7.85 8.55 6.55 8.55

5.50 5.00

4.95 4.50

13.25 6.25

11.95 5.60

10.50 11.00 22.95 9.35 6.25 12.75

8.50 5.60 11.50

11.00

9.90

Each

14.75

25 or more

13.50 Each

Technical Manual for Signal and Train Control Rules.

Includes Part 233, 234, 235, 236 - Spiral Bound Order 25 or more and pay only $39.10 each

BKPSS

Passenger Safety Standards 22.80 Part 238, 239 - Order 25 or more and pay only $20.50 each

BKSTC

Signal and Train Control Systems Includes Part 233, 234, 235, 236 Order 25 or more and pay only $17.55 each

19.50

BKCAD

Drug and Alcohol Regulations in the Workplace Part 40 & 219

36.00

BKINFRA

Track and Rail and Infrastructure Integrity Compliance 33.00 Manual - Volume II, Track Safety Standards Update 1-1-14 Order 25 or more and pay only $30.00 each

1809 Capitol Ave, Omaha, NE 68102

Ph: (402)346-4300 • Fax: (402)346-1783 Email: orders@transalert.com

Mechanical Department Regulations A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound.

Part Title 210 Railroad Noise Emission Compliance Regulations 215 Freight Car Safety Standards 216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment 217 Railroad Operating Rules 218 Railroad Operating Practices - Blue Flag Rule 221 Rear End Marking Device-passenger, commuter/freight trains 223 Safety Glazing Standards 225 Railroad Accidents/Incidents 229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

BKMFR

Mech. Dept. Regs.

Order 25 or more and pay only $24.50 each

$27.95

9.90

BKTM

The Railway Educational Bureau

49 CFR Part 223, Safety Glazing Standards: FRA proposes to revise and clarify existing regulations related to the use of glazing materials in the windows of locomotives, passenger cars, and cabooses. This proposed rule would reduce paperwork and other economic burdens on the rail industry by removing a stenciling requirement for locomotives, passenger cars, and cabooses that are required to be equipped with glazing. This proposed rule would also clarify the application of the regulations to antiquated equipment and to the end locations of all equipment to provide more certainty to the rail industry and more narrowly address FRA's safety concerns. FRA is also proposing to clarify the definition of passenger car and separately to update the rule by removing certain compliance dates that are no longer necessary.

Dates: (1) Written comments must be received by November 25, 2014.

46.00

Part 240–Qualification and Certification of Locomotive Engineers

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

BKLER

Order Now!

Qual. and Certif. of Loco. Engineers Order 50 or more and pay only $11.50 each

$12.75

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

www.transalert.com

Add Shipping & Handling if your merchandise subtotal is: U.S.A. CAN U.S.A. CAN UP TO $10.00 $4.10 $8.55 25.01 - 50.00 9.80 15.70 10.01 - 25.00 7.20 11.80 50.01 - 75.00 10.90 19.80

Orders over $75, call for shipping

*Prices subject to change. Revision dates subject to change in accordance with laws published by the FRA. 11/14

He’ll tell you that he simply saved the best for last.

Lee Barrington’s past thirteen years with ORX may pale in comparison to a lifetime of professional excellence and personal growth. But he’d say different.

There’s over a half-century of metallurgical experience driving this car – thirty years of which have been spent as a Quality Assurance expert seeing to it the exacting specifications of customers meet and exceed industry certification standards. For every one of those years and more, she’s been by his side – since 1957, in fact. That’s five states, two professional degrees, four children, twelve grandchildren and ten great grandchildren, if you’re keeping score.

ORXpertise

Lee Barrington Quality Assurance Director

www.ORXrail.com | 814.684.8484