October 2014 Railway Age by Railway Age

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October 2014 | www.railwayage.com

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Equipment Finance: RAPID CHANGES in a Capital-Flush Market HrSR ENGINEERING CHALLENGES AMTRAK’S LONG-TERM EQUIPMENT PLANS SMART LOCOMOTIVES WIRED FOR DATA

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RailwayAge

OCTOBER 2014

visit us at www.railwayage.com Features HrSR: Searching for shared-use consensus Amtrak’s new wheels hit the rails Multi-purpose monitoring Cap screw clamping challenge

18 26 35 40

News/Columns From the Editor Update Watching Washington Short Line/Regional Perspective

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Departments Industry Indicators Industry Outlook Market People 100 Years Ago Meetings Products Advertising Index Professional Directory Classified

4 6 8 42 42 42 43 44 45 46

SUPPLEMENT

RailwayAge 2015 RAILROAD FINANCIAL DESK BOOK

Contents

DB1

A LOOMING SET OF CHANGES By David Nahass

DB10

Directory of FINANCIAL PLAYERS

ON THE COVER Railcar construction continues at a furious pace. Photo: William C. Vantuono

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. 10. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print or Digital only versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Foreign $239.00 (U.S. funds) per year/$397.00 for two years for Air mail delivery. When ordering Both Print and Digital: $150.00 per year/$227.00 for two years in the U.S., Canada, and Mexico; $208.00 per year/$296.00 for two years, foreign. Foreign $308.00 (U.S. funds) per year/$496.00 for two years for Air mail delivery. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2014 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 1172, Skokie, IL 60076-8172, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 00338826.

October 2014 RAILWAY AGE 1

RailwayAge

From the Editor WILLIAM C. VANTUONO

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One more (last) time, Senator?

ome people never know when to quit, especially those whose behavior borders on that of a schoolyard bully. Such is the saga of retiring Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.), who has spent much of his political career attempting to beat up on the railroads. Rockefeller’s latest—and last—attempt at legislated competition is S. 2777, the Surface Transportation Board Reauthorization Act of 2014 (co-sponsored by South Dakota Republican John Thune). S. 2777 would push the agency to move faster on 1) addressing the revenue adequacy standard, a metric used by the STB to rule on rate challenges; 2) imposing mandatory reciprocal switching; and 3) deciding whether contract bundling hampers shippers from bringing rate cases before the STB. This bill would also allow the STB to launch its own investigation before a complaint from a shipper or railroad was filed. Imagine that! That’s the “official” language of S. 2777. Want to know what’s really going on? For that, I’ll turn this column over to Contributing Editor Frank Wilner, our erstwhile Capitol Hill insider: “An Iraqi proverb reads, Show them death and they will accept a fever. Jay Rockefeller, whose foreign affairs knowledge trumps an inadequate understanding of economics, appears to have stumbled across the proverb and embraced it as the foundation of his strategy to enfeeble the purpose, wisdom, and consequences of the 1980 Staggers Rail Act. “Perennially having failed to muster peer support for steering Staggers-gutting legislation to the Senate floor on behalf of shippers seeking cut-rate prices for highend service, Rockefeller, in concert with Thune, has now taken aim at the railroads’ regulatory agency, the STB, crafting legislation to intimidate STB members into giving so-called captive shippers (those with limited or no effective transportation

RAILWAY AGE

October 2014

alternatives to rail) undue preference before the agency. “S. 2777 seeks to pack the threemember STB with two new members who would undoubtedly be Staggers-averse ringers eager to bully the agency into upsetting 34 years of federal-court-vetted regulatory precedent that restored to financial health a rail industry on the brink of nationalization. “S. 2777 also would give Congress greater sway over future STB budget requests by removing the STB from the administrative shelter of the Department of Transportation. The packing of the STB and an ability to hold its budgets hostage is the show of death intended to coerce the agency into accepting the fever—a return to the pre-Staggers Act dark days when railroads were regulated as if they were social welfare agencies, and their track, equipment, and service were as would be expected in a Third World nation. “That the Commerce Committee gave S. 2777 a favorable vote Sept. 17 sent a chill in Wall Street’s direction, but even Rockefeller confides the measure will not reach the Senate floor for a vote prior to adjournment of the 113th Congress. “Of course, a provision or two from S. 2777 could be slinked into another transportation bill as a midnight rider. More likely, S. 2777 will lurk below the surface when the 114th Congress convenes in 2015 as a somber reminder that politics can be a sinister art used to bully assumedindependent regulatory agencies.” Cynics say that Rockefeller’s crusade against this industry is his way of trying to come to grips with the questionable business practices of his great-grandfather, oil tycoon John D. Rockefeller. It’s OK, Senator. Don’t feel guilty. You can enjoy your wealth. We couldn’t care less how you acquired it. Just go home, and leave us alone.

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Industry Indicators TRAFFIC ORIGINATED CARLOADS

SHORT LINE AND REGIONAL TRAFFIC INDEX FOUR WEEKS ENDING AUG. 30, 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

AUG. ’14 77,302 3,540 35,500 24,709 121,663 65,257 462,113 6,301 14,986 25,182 32,109 16,423 44,706 18,154 68,414 102,407 23,012 35,558 14,003 20,948 1,212,287

AUG. ’13 66,647 3,395 35,059 25,688 121,329 52,130 482,560 5,941 13,359 26,123 25,092 14,629 41,976 18,864 67,886 89,584 21,463 35,305 14,796 16,663 1,178,449

% CHANGE 16.0% 4.3% 1.3% -3.8% 0.3% 25.2% -4.2% 6.1% 12.2% -3.6% 28.0% 12.2% 6.5% -3.8% 0.8% 14.4% 7.2% 0.7% -5.4% 25.7% 2.9%

327,559

315,330

3.9%

1,539,846

1,493,799

3.1%

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 AUG. 30, 2014

INTERMODAL MAJOR U.S. RAILROADS BY COMMODITY TRAILERS CONTAINERS TOTAL UNITS

AUG. ’14 118,598 957,090 1,045,880

AUG. ’13 118,002 913,166 1,031,168

% CHANGE 0.5% 4.8% 4.3%

7,201 238,721 245,922

6,399 216,375 222,774

12.5% 10.3% 10.4%

125,799 1,195,811 1,321,610

124,401 1,129,541 1,253,942

1.1% 5.9% 5.4%

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 7.4% 3.8% 12.1% -3.1% 22.8% -4.8% 5.6% 69.2% 0.4% 2.9% 52.2% -3.2% 1.7% 11.6% 2.1% -2.7% 5.5%

AUGUST 2014 - 400,471 AUGUST 2013 - 375,728 320,000 330,000 340,000 350,000 360,000

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

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

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED AUG. ’13 44,824 23,922 31,182 12,044 20,723 7,040 10,364 4,798 23,417 11,235 1,857 2,219 19,813 13,230 46,097 11,950 91,013

TOTAL CARLOADS, AUGUST 2014 VS. 2013

CANADIAN RAILROADS ALL COMMODITIES

ORIGINATED AUG. ’14 48,132 24,821 34,956 11,672 25,456 6,705 10,942 8,120 23,520 11,559 2,827 2,147 20,158 14,762 47,045 11,632 96,017

BY COMMODITY

Transportation (train and engine) 69,499 5.0%

Executives, Officials, and Staff Assistants 10,001 1.85%

Professional and Administrative 14,311 1.86%

TOTAL EMPLOYEES: 167,988 % CHANGE FROM AUG. 2013: 2.8% Transportation (other than train & engine) 6,697 (-1.18%)

Maintenance of Equipment and Stores 30,151 2.80%

Maintenanceof-Way and Structures 37,329 0.19%

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 2.8% in mid-August 2014, measured against mid-August 2013, and was up 0.51%, or 850 positions, from mid-July 2014. Transportation (train and engine) again led the yearover-year gain, up 5%; it also rose 1.12% over mid-July levels.Only Transportation (other than train and engine) declined from a year ago, down 1.18%. 4

RAILWAY AGE

October 2014

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Industry Outlook AAR: Senate STB bill is troublesome

Seattle chides BNSF on tunnel safety Seattle emergency officials last month urged BNSF Railway to improve safety procedures related to a tunnel within the city now used for an increasing amount of crude-by-rail (CBR) traffic. The city’s Office of Emergency Management and its Fire Department issued an eight-page letter calling for upgrades in BNSF’s communications and signaling, ventilation, and fire- and vapor-suppression capabilities. Seattle also asked BNSF to provide a foam-response vehicle for firefighting. The letter responded to a Seattle City Council request “that the Seattle Fire Department and Seattle Office of Emergency Management review and, if needed, update the City’s incident response plans for the increasing risk imposed by the transport of petroleum by rail with a report back to the relevant committees of the City Council.” The letter asserts that “the rail tunnel beneath the city is antiquated and more must be done to mitigate the risk of an oil incident.” The city already has a growing reputation for pressuring freight railroads on environmental matters, including CBR and coal movements by rail.

More support for Detroit streetcar

Workers’ vote ends Bombardier strike Workers at Bombardier Transportation’s Thunder Bay, Ontario facility voted to end an eight-week strike on Sept. 12 that had crippled the company’s delivery of light rail transit and subway vehicles, primarily to Toronto Transit Commission. Members of Unifor Local 1075 began the strike on July 14, after talks failed to bridge a gap that began with the expiration of the previous contract, which expired May 31. 6

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October 2014

Last month, Ford Motor Co. and DTE Energy joined Detroit-area companies committing funding and other support to the nascent M1 streetcar project, now under construction. Ford and DTE each announced $3 million in funding for the $140 million project at a ceremony that included Secretary of Transportation Anthony Foxx. The two companies get some perks for their involvement. Ford will get its name placed at the M1 Rail station at Amsterdam, near West Grand Boulevard, according to Jim Vella, head of Ford’s philanthropic fund and community services. “We may do some things around the stop like e-charging stations for electric vehicles,” Vella said, “but we haven’t worked that out yet.” DTE Energy President and CEO Matt Cullen said his company will be in effect a sponsor of the line, with designations noting it is “powered by DTE.”

Last month the Association of American Railroads (AAR) expressed concern over the Surface Transportation Board (STB) Reauthorization Bill (S.2777), passed by the Senate Commerce Committee on Sept. 17. AAR said if the legislation proceeds without alteration, it “would harm the nation’s railroads’ ability to move what the economy demands and deliver the service shippers expect. The railroad industry would not be able to continue to reinvest record amounts of private capital into the freight rail system if the STB Reauthorization Bill passes in its current form.” AAR President and CEO Edward R. Hamberger said railroads have several serious concerns with the bill, beginning with the legislation directing the STB to pursue regulations that could cap rates and require railroads to turn over traffic to competitors. “The rail industry believes this legislation will harm the ability of the nation’s railroads to invest in the network and improve service for shippers,” said Hamberger, who noted railroads have moved the most freight in their history during the past seven years and commodities such as grain have registered double-digit gains measured against prior-year levels. “These new restrictive regulations would be imposed on the nation’s railroads at a time when investments in capacity, new equipment and new hires are needed,” Hamberger said. AAR also stated: 1. The legislation would direct the STB to prevent railroads from using the approach commonly used by railroads and shippers alike in contract negotiations to “bundle” offers, but would allow shippers to continue to do so. The AAR says the STB has no authority over rail contracts and should not be directed to interfere in agreements that are arms-length transactions freely entered into by both parties. 2. The STB already has broad regulatory oversight over the railroads; however, the legislation would give the STB expanded authority to launch investigations of a railroad even where no complaint against the railroad has been lodged.

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Siemens lands San Francisco LRV contract San Francisco Municipal Transportation Agency (SFMTA) has awarded Siemens a $648 million contract for 175 S200-SF light rail vehicles for its Muni transit system. With an option for an additional 85 cars, this is one of the largest LRV orders ever placed in the U.S. Siemens will build the LRVs at its Sacramento, Calif., plant. The first cars are scheduled to be delivered at the end of 2016. Three carbody designs (pictured) have been proposed; one will be selected by SFMTA with input from the public. The S200-SF is a newly-developed high-floor (with street-level accessibility) LRV for San Francisco based on the Siemens Model S200. The car is described as “especially

energy-efficient thanks to a lightweight drive system with regenerative braking, and an LED lighting system that uses up to 40% less electricity than standard neon lighting.” The 75-foot (length over couplers), 11.5-foot-high (pantograph locked down), 104.3-inch-wide, 39.4-ton (empty weight) vehicle features a 50-mph maximum operating speed and capacity for 60 seated passengers (203 with standees), plus room for up to four bicycles or wheelchairs. Four traction motors generate 696 hp, drawing power for the LRV’s Siemens IGBT propulsion system from 600 v.d.c. catenary. Minimum turning radius is 42 feet, 7 inches; maximum operating grade is 9%.

North America

Worldwide

ALL ABOARD FLORIDA: Selected Siemens to provide both locomotive and passenger equipment for the company’s planned intrastate higherspeed rail (HrSR) service linking Florida’s east coast and Orlando.

INDONESIAN RAILWAYS: Placed an order with GE Transportation for 50 additional class CC206 diesel locomotives, which will be used on passenger and freight services on the narrow-gauge networks in Java and Sumatra.

OKLAHOMA CITY: Prepared to solicit bids from streetcar manufacturers to provide five dual-power vehicles for its proposed $130 million streetcar line. PORT AUTHORITY OF NEW YORK & NEW JERSEY: Approved redevelopment of Greenville Yard in Jersey City, N.J., to include a new ExpressRail facility that will support the adjacent Global Marine Terminal, and allow the terminal to ship and receive containerized cargo by rail. 8

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October 2014

NETHERLANDS RAILWAYS (NS): Began sending the first V250 Fyra high speed trainsets back to AnsaldoBreda’s Pistoria, Italy, plant, following a settlement reached between AnsaldoBreda and two customers, Netherlands Railways (NS) and Belgian National Railways (SNCB). SERBIAN RAILWAYS: Awarded a consortium of Alstom, Russian Railways subsidiary RZD International, and

Belgrade, Serbia-based Mikhaljo Pupin a contract to supply signaling systems to upgrade a section of the Serbian Railways line linking Belgrade and Vrsac, near the Romanian border, and including the city of Pančevo. STAGECOACH (ENGLAND): Ordered 30 five-car Desiro City electric multiple-unit (EMU) trains from Siemens Mobility and train lessor Angel Trains, intended for use by Angel Trains in South West Trains suburban commuter services to and from London Waterloo. TRANSPORT FOR GREATER MANCHESTER (ENGLAND): Placed a £34 million ($55.6 millon) order with a consortium of Bombardier and Vossloh Kiepe for 16 additional M5000 Flexity light rail vehicles.

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Update SUPPLY BRIEFS Brookville Equipment lands San Francisco PCC work Brookville Equipment Corp. and the San Francisco Municipal Transportation Agency (SFMTA) last month agreed to terms for the rebuild of 16 Presidents’ Conference Committee (PCC) streetcars, adding a minimum of 20 years of service life to the historic vehicles in a contract valued at nearly $34.5 million. SFMTA’s order followed its move to purchase 175 new LRVs from Siemens (see p. 8). San Francisco currently has the largest and most active fleet of rebuilt PCCs in regular service.

Mexican railroads to buy EMD SD70ACe locomotives

HDR lands Columbia Pike streetcar contract Arlington County, Va., last month selected HDR Inc. for preliminary design and engineering work for its 7.4-mile Columbia Pike Streetcar Line, which will run 7.4 miles from the Skyline section of Fairfax County to Pentagon City and eventually to the Crystal City Metrorail station. The $26 million contract was approved by the Arlington County Board, which is sparring over the projected $330 million capital cost. 10

RAILWAY AGE October 2014

SMART-TD GO-001 rejects BNSF one-person train crew proposal

NSF Railway conductors and ground-service workers represented by General Committee GO-001 of the International Association of Sheet Metal, Air and Rail Transportation Workers (SMART, formerly the United Transportation Union) last month rejected a proposal to allow freight trains equipped with Positive Train Control (PTC) to operate as early as next year with a lone engineer in the cab and no conventional on-board conductor between specific territories in the Midwest and Pacific Northwest. The agreement, which would have applied to roughly 3,000 BNSF workers across several western states, would have provided improved pay and benefits plus full-blanket furlough protection to all affected ground service workers in exchange for an

amended crew consist agreement to be phased in over two years, beginning Jan. 1, 2015. It would also have permitted trains now requiring a brakeman or helper to be operated with a minimum of one on-board conductor or one yard foreman. For hybrid yard service, where the locomotive is operated by remote control beltpacks and on-board controls during the same tour of duty, the minimum crew would have been one foreman and one helper—one qualified to operate on-board locomotive controls. Through freights not having operational PTC or hauling hazardous materials would have continued to require a minimum of one conductor and an engineer. Ground service workers, in addition to conductors, include brakemen, helpers, switchmen,

William C. Vantuono

Ferrocarril Mexicano, S.A. de C.V. (Ferromex) and Ferrocarril del Sureste S.A. de C.V. (Ferrosur), which are owned by Grupo México, are acquiring 34 Electro-Motive Diesel (EMD) SD70ACe locomotives. Ferromex’s purchase of 19 units will bring its total of SD70ACes to 116. Ferrosur’s purchase of 15 units is its very first order of EMD locomotives; its SD70ACe locomotives will be specially outfitted and enhanced for tunnel operations. The newest locomotives will go into service in Mexico City by June 2015.

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Update Proposal for one-person crews is rejected (continued from previous page) and yardmen; all are subject to promotion to conductor. A message GO-001 officials sent on Sept. 10, 2014 to members informing them of the proposal’s failure said that detailed results would be available within the next few weeks, and that the committee would remain open to “informal conversation” with BNSF, suggesting that the idea was not completely moribund. BNSF clearly believes the offer would have benefitted both labor and the bottom line, and tried to make the proposed rules change as lucrative to the rank-and file as possible in order to secure the change (RA, Aug. 2014, p. 19). Extensive career income protection would have assured that “no protected ground service employee shall ever be subject to involuntary furlough.” Reserve status positions were to be created,

further assuring that those protected and unable to hold any position in ground, engine, dispatcher, or yardmaster service would have been provided 100% of their compensation and benefits. As well, ground service employees would have had an option of choosing voluntary reserve status, assuring them 75% of their wages when not working. Those in reserve status would not have been required to report to a railroad facility, but rather would have been required to remain qualified for duty while in reserve status and awaiting recall. The proposal also would have provided that downturns in business would not adversely affect protected ground service employees, who, rather than involuntarily furloughed, would have been assigned to a work retention board, with full pay and benefits, while awaiting recall.

But the proposal drew some scorn even from those not directly affected, including Ron Kaminkow, an Amtrak locomotive engineer who previously worked as an engineer for Norfolk Southern and Conrail, who criticized the concept in a note to Railway Age. Kaminkow, speaking on his own behalf, asserted, “There is no comparison between what the freight industry is proposing and currently existing passenger operations.” He added, “Because of the unscheduled nature of freight service, the myriad onand off-duty times, the long hours, the night work, the lack of regularly assigned days off, and the absence of anyone else anywhere on the train to assist, the proposed single-employee operations of freight trains on the BNSF has nothing in common with currently existing single-engineer passenger service operations.”

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New York Air Brake marks 125 years, eyes future September 2014 marked the start of a year-long New York Air Brake celebration “honoring 125 years of making freight railroads safer and more productive,” according to NYAB President Mike Hawthorne. The Watertown, N.Y.-based railway supplier was founded in 1890 and was among the first companies to manufacture air brake control valves for freight trains. “The company continues that tradition today with products that help the nation’s railroads move consumer goods, commodities, energy resources, and other freight safely and efficiently,” said Hawthorne. NYAB employs more than 800 skilled workers at production facilities in Watertown; China Grove, N.C.; West Chicago, Ill.; and Irving, Tex (the TDS, Train Dynamic Systems, business unit). The company manufactures

brake controls and air supply and bogie equipment, and provides rail services “while teams of designers continue their work to engineer products that outperform existing technology to make freight trains safer, more efficient, and more productive,” noted Hawthorne. NYAB’s earliest automatic brake valves (a vacuum-actuated design) replaced manual braking and made brakes more effective and trains safer, enabling railroads to operate longer and heavier freight trains. In 1902, the company moved its operations from Beebee Island in the center of Watertown to a location then on the outskirts of the city. (Its operations were converted from brake valves to munitions during both World War I and II.) Throughout the 20th century, NYAB grew through acquisitions and new

products, eventually merging with General Signal Corporation in 1967. The company temporarily faltered in 1983 as a result of a decrease in demand for its railroad freight products, but an expansion into equipment for the rail transit industry enabled the company’s return to prosperity. NYAB was acquired by the German brake company Knorr-Bremse in 1991. New York Air Brake’s customers include BNSF Railway, CN, Canadian Pacific, CSX Transportation, Kansas City Southern, Norfolk Southern, and Union Pacific. While a majority of the company’s business comes from North American customers, ever-increasing exports to freight rail customers in Europe, Australia, China, South Africa, and Brazil represent a growing part of the company’s portfolio.

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02.04.2014 09:05:42 October 2014 RAILWAY AGE 13

Update

Late last month, Seeing Machines Ltd. signed a strategic agreement with Electro-Motive Diesel, Inc. (EMD), a subsidiary of Progress Rail Services Corporation, a Caterpillar Co., related to in-cab operator fatigue and distraction monitoring systems for use in locomotives. The underlying Seeing Machines Driver Safety System (DSS) technology is based on patented eye-tracking and analytics that detects driver distraction and fatigue while on

the job, Canberra, Australia-based Seeing Machines said in announcing the move. Following a previously announced agreement with Caterpillar Global Mining, this exclusive agreement, with an initial term of three years, will allow Seeing Machines and LaGrange, Ill.-based EMD to develop and adapt technology for the rail industry, Seeing Machines said. “We are excited to be working with EMD,” said Seeing Machines CEO Ken Kroeger. “Our operator-facing cameras and accelerometer sensors provide key streams of data that are designed to help improve productivity and safety outcomes. I believe we are proving this in the challenging industrial applications of mining, and we expect to achieve the same positive results working with EMD in rail transport.” Progress Rail and EMD President and CEO Billy Ainsworth said, “There have been significant steps in recent years to enhance safety in the rail industry, and today’s announcement builds upon those advancements. Working with Seeing Machines, we can develop the on-board technology designed to deliver enhanced safety to our customers and their fleets by ensuring that operators remain alert while RAILWAYAGE V.pdf 1 03/03/14 16:30 controlling the locomotive.”

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RAILWAY AGE October 2014

Electro-Motive Diesel, Inc.

Seeing Machines and EMD sign strategic agreement

Spat puts San Francisco Transbay transit hub plans at risk Aggressive plans for San Francisco’s Transbay Transit Center, which include accommodations for improved Caltrain service and a terminus for California high speed rail, are in jeopardy as developers and city officials have reached an impasse. The new center, dubbed by some as the Grand Central Terminal of the West Coast and itself not in immediate harm’s way, was to be the focal point of a $2.6 billion Caltrain extension for San Francisco, to serve a host of new skyscrapers and other development. But local media reported that developers balked at the original agreement, crafted prior to the Great Recession, and may sue the city, even as the city Board of Supervisors affirmed original terms of the tax district, and after all parties had agreed to a rough outline of the deal, including some modifications over payment schedules. The Transbay Joint Powers Authority had planned to use economic development as a lever to issue up to $1.4 billion in bonds. About $200 million in funding is on hand to complete the Transbay Transit Center itself, slated to open in late 2017. But improved rail access could be thwarted if local matching funds aren’t in place to tap about $1.5 billion in federal and state contributions.

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October 2014 RAILWAY AGE 15

Update Lavell named NJ Transit VP, GM of Rail Operations New Jersey Transit’s Board of Directors last month appointed Robert Lavell as Vice President and General Manager of NJ Transit Rail Operations. Lavell (at right) has more than 40 years of industry experience, and has served as Acting Vice President and

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as Deputy General Manager of Equipment for NJ Transit, where he has provided leadership for all aspects of maintenance of equipment, including safety, budget, and planning of rail facilities and equipment modifications. Lavell previously served 30 years with Amtrak, including as regional vice president of equipment maintenance. As NJ Transit’s Deputy General Manager of Equipment from 2008 to 2013, Lavell established the agency’s first E-Learning program, which has enhanced the formal training programs for more than 1,400 employees. Lavell also implemented a component-based maintenance program, which has increased reliability of NJ Transit’s rolling stock by approximately 10%, a figure reflected in improved on-time performance. NJT last month also appointed Neil Yellin as Deputy Executive Director, essentially a new position within the corporation. Yellin previously served as Senior Vice President Administration and Chief Safety Officer for MTA Long Island Rail Road, and will help oversee policy administration and administrative functions, NJ Transit said. Last February, New Jersey Gov. Chris Christie named Veronica “Ronnie” Hakim to the post of Executive Director. Hakim, the former New Jersey Turnpike Authority Director and also a former executive with the New York Metropolitan Transportation Authority, succeeded James Weinstein, who stepped down following mounting criticism of NJ Transit’s performance during Superstorm Sandy in 2012.

Photo courtesy Gevon Knox, NJ Transit

General Manager of NJ Transit Rail Operations since last March. Lavell is a career railroad professional with broad experience in operations, equipment, infrastructure, and safety, the NJ Transit Board stated. For the past six years, Lavell served

Watching Washington FRANK N. WILNER

AAR: 80 candles and a trailblazer still

he 26 months following the December 1917 nationalization of America’s railroads—ordered by President Woodrow Wilson to improve transportation coordination and productivity during World War I—was second only to passenger train segregation as the industry’s most shaming event. “There were some things that the government can do that private management cannot,” Wilson said. “Only under government administration can an absolutely and unembarrassed common use be made of all tracks, terminals, terminal facilities and equipment of every kind.” For sure, the 1890 Sherman Antitrust Act chilled private-sector collusion. But despite a 1914 Clayton Act provision allowing the Interstate Commerce Commission authority to convey antitrust immunity for certain joint activities, railroads did not attempt extensive formal coordination owing to mutual distrust. Where limited joint action took place, it most frequently was out of immediate necessity than occasioned by a longer-range vision of improved efficiency. Lessons of the Civil War led to standardized track gauge; railroads led the conversion of 70 different time standards into four time zones; rail managers collaborated to write a standard code of operating practices; and bodies of master carbuilders, professional engineers, superintendents, freight agents, and accountants hastened the development of uniform standards for construction, interline payments, property valuation, and statistical methods. A Presidents’ Conference Committee produced joint cost studies and performed research; an Association of Railroad Executives became the point of contact with federal lawmakers and regulators; and an American Railway Association focused on operating practices.

No matter, duplication of effort and expense persisted with failed efforts by a CEO-led Railroads’ War Board to coordinate operations, lessen congestion, and reduce car shortages. As a last resort, President Wilson utilized his war powers to breach the fiefdoms and place all railroads under the guardianship of a U.S. Railroad Administration for the duration of the war.

A private-sector U.S. freight railroad industry might not exist without the AAR. The return of physically battered, government run railroads to their private owners in 1920 was accompanied by a regulatory attempt at master merger planning and a congressional mandate that more profitable carriers share their earnings with the less profitable, seeding a new source of suspicion. It remained for the Great Depression—when a third of the nation’s rail mileage was in bankruptcy, freight cars were in revenue service just 16% of their lives, and barge and truck competition was expanding—to elevate rail management recognition of the inherent economic advantages of a synchronized national rail network. The Emergency Railroad Transportation Act of 1933 encouraged coordinated activities. President Franklin D. Roosevelt, who had criticized “wasteful duplication,” appointed Interstate Commerce Commission Chairman Joseph Eastman as federal

coordinator of transportation. Said Eastman of his mandate: “The numerous separate owners and managers of individual parts of the single railroad system are in need of a more perfect union … Our national railroad system suffers from much wasted motion and unapplied or misapplied efforts [by] a small army of independent feudal chieftains who fight a good deal among themselves and ban together for the common good with considerable difficulty.” Anxious that Eastman intended permanent nationalization, railroad management, on Oct. 12, 1934, formed the Association of American Railroads (AAR), into which was incorporated most of the individual predecessor organizations. The infant AAR predicted “railroads could accomplish voluntarily and without government help the purpose which the Emergency Railroad Transportation Act was designed to accomplish with government help.” John Jeremiah Pelley, a personal friend of President Roosevelt, resigned the presidency of New York, New Haven & Hartford Railroad to become the AAR’s first president. He later was honored by President Harry S Truman for ensuring, through the AAR, that the nation’s railroads “entered World War II with a capacity for service that surprised the nation.” An antitrust lawsuit initiated in 1943, alleging a conspiracy to set rates and to retard the growth of competing modes, sought to dissolve the AAR, but Congress stepped in to confer more broad antitrust protection in 1948. It is unlikely a private-sector freight railroad industry would exist in America today were it not for the uncompromising energies, over the past 80 years, of the Association of American Railroads. Happy 80th birthday, AAR. October 2014 RAILWAY AGE 17

HIGHER-SPEED RAIL: Searching for SHARED-USE CONSENSUS Can we build a shared-use system? Yes. Can we justify a typical business By RYAN McWILLIAMS, Contributing Editor, and case around that system? No.

18 RAILWAY AGE October 2014

above 110 mph with common target speeds of 125 mph and 150 mph. The primary objective for high speed rail is providing an alternative to air travel through competion with short- to medium-distance regional flights. Hence, the faster we can move passenger trains, the larger the customer base and the more attractive an option train travel becomes when compared to air travel. This customer base is a primary financial factor when determining the viability of building or upgrading a high speed passenger network, since operating companies need customers to fill seats to offset costs. In Europe and Asia, dedicated passenger systems are now operating at speeds in excess of 230 mph on a regular basis but only on dedicated high speed infrastructure. Most European freight trains have a speed limit of 70 mph when

Bruce Kelly

he topic of shared use—operating high speed passenger trains on existing freight infrastructure— has been a longstanding subject of discussion in numerous political forums and engineering meetings around the world. The same holds true for running freight trains on passenger infrastructure, with minor variations in topic focus. While there are many factors to consider when discussing the viable (and not so viable) options available to the industry, we don’t appear to be close to consensus. Primary deliberations focus on the political quagmires, the technical requirements, and the associated costs that these two very different systems require. High speed passenger operations in North America are often classified as trains (or integrated trainsets) that travel

Principal, International Engineering/RailAdvisor

operating on their passenger-focused infrastructure and do specific network. The additional cost of tunnels, bridges, mainnot operate at all on the high speed lines dedicated to passen- tenance, and track geometry changes were the driving factor ger service in excess of 150 mph. By comparison, most when Germany decided to abandon the shared-use scenario. North American freight trains operate on Class 5 track with The conditions and parameters listed below are complex as a speed limit of 80 mph, while passenger trains observe a standalone topics and combined make for an intricate matrix speed limit of 90 mph on that same track. It is also relevant of parameters that all require high levels of design, impleto note that European freight cars are much lighter than mentation, and management. heavy-haul North American freight cars and therefore cause Track geometry is a primary concern for freight and lower overall stress on the infrastructure (20,000-pound passenger systems. Turnout speeds, superelevation/balance wheel load vs. 35,000-pound wheel load). speed, transitions/spirals, maximum curvature, and track The questions remain as to how high speed service might tolerance (cross level, gauge, profile, etc.) all limit the maxibe implemented in the U.S., and is a shared-use system— mum speed at which a train can travel over that track. It’s more accurately termed higher-speed rail, or HrSR—the not as simple as building a better rail vehicle to negotiate answer? Unfortunately, there is no rocket science to this larger deviations or building a better/smoother track. The issue, and the problem is usually distilled down to a simple physics behind the design only allow for a specific amount combination of system (vehicles of real-world variation in which and infrastructure) cost, engimost small incremental perforThe cost for higher-speed, shared-use mance increases come at neering tolerance/maintenance requirements (which comes at a tremendously escalated costs. systems has not been feasible, cost), and right-of-way availabilSuperelevation (cross level in in any circumstance, as of today. ity (which also comes at a cost). a curve) is a primary concern, There are many different ideas and the re-evaluation of such floating around the professional rail industry, and even more parameters quickly brings us to the tradeoff between curve “ideas” floating around the political agendas driving state and wear and the cost of that wear vs. the ability to negotiate federal high/higher-speed rail programs. such curves at high speed. Freight railroads have done some We are not going to get into the political complexities serious work and cost analysis to come to the conclusion of why high speed rail is an agenda item or why the state that lowering superelevation can reduce curve wear in many of Florida turned down federal funding for high speed rail cases. Since rail is most often the largest engineering monies. Instead, let’s just agree that the groups (past, presexpenditure for freight railroads, changing their practice to ent, and future) that look into these programs will eventually accommodate a higher-speed passenger train won’t be an come across some of the following technical issues, and will argument easily won unless that higher-speed passenger likely have to determine if the investment costs are worth operator is willing to heavily compensate for the imposed the financial return on that investment. financial burden. Further compensation in the converse is The simple division of a railway system is often drawn needed if heavy freight cars are going to be allowed to run on between vehicles and infrastructure. This division exists higher-speed passenger routes since the geometric tolerance today both technically and commercially in many cases, of higher-speed infrastructure must be kept to tighter tolereven though we have worked extremely hard as an industry ances. This is not a cheap endeavor when axle loads double to educate all involved about the technical and commercial with the introduction of heavy freight cars. Additional geompitfalls of dividing our railways in this manner. It should be etry concerns are as follows: stated again for the record that the railway works as a system • Excess curve elevation has severe cost consequences for (vehicle and track), and almost any attempt to deviate from freight operations due to increased rail wear. this configuration has and will result in a overall degraded • Low rail “crushing” from heavy freight vehicles is a system. Hence, there are many proven and re-proven cases primary concern for higher-speed passenger service perforaround the world that showcase a combination of equipment mance and safety. and infrastructure that can operate at impressively high • Gauge corner damage (such as RCF, rolling contact speeds if correctly structured. fatigue, or GCC, gauge corner cracking) can cause unsafe In all of those circumstances, the truly high speed systems conditions for all trains. are dedicated routes with dedicated equipment. Shared • Increased damage to track surface, ties/fasteners, and freight/passenger operations do not exist within that high subgrade is accelerated by heavy freight vehicles. speed network, primarily due to cost issues. This is not to say Safety of passengers as well as the safety of surrounding that it is impossible to operate a “true” high speed, shared-use communities is another area of primary concern. Grade system. However, it is stating quite clearly that the cost for crossing separation for higher-speed passenger trains is such systems has not been feasible, in any circumstance, as of extremely crucial and creates an obvious increase in overall today. A primary example of this situation is when Germany’s risk to human life as that speed increases. Train separation Deutsche Bahn attempted a shared-use system and soon realappliances and signal infrastructure must also be upgraded ized that it was more cost effective to run two independent when talking higher-speed passenger service. The answer to systems, one freight and one passenger, where each focused this problem is not quite as simple as implementing PTC, as on the individual engineering and business priorities of their some have recently suggested. (The current PTC program as October 2014 RAILWAY AGE 19

ENGINEERING HIGHER-SPEED RAIL

mandated by Congress is being criticized for technical and commercial reasons by many in the rail industry.) Right-of-way acquisition corresponds to track geometry due to the fact that the land must be available in a relatively straight line to limit the amount of track curvature and thus allow for higher-speed operations. One of the primary tradeoffs when designing rail vehicles is their ability to curve vs. their ability to travel at higher speeds. High speed stability is often at odds with the curving ability of a vehicle, which then requires different vehicle configuration needs. One option to the shared-use infrastructure is to use the same basic corridor but different tracks when the overall right-of-way conditions align (literally). This does create other issues whereby 26-foot track centers are the suggested minimum to ensure safety (more is better) and physical barriers are often preferred at an unattractive additional cost. Similar to our current predicament where most airports are miles from the city center and the “last-mile” connection is a chore at best, our overall transportation system would benefit from better connections that are strategically chosen. It is also widely recognized that different funding sources and different governing agencies can create more problems than solutions in this space. However, there is a tremendous value in bringing together the various (sometimes competing) entities while reminding them that the benefit to the total system will also benefit individual shareholders in the long term. 20 RAILWAY AGE October 2014

Long-term maintenance costs continue to be a point of disagreement when it comes to the actual numbers. However, there is little argument that passenger lines have historically calculated that freight services impart more damage to the infrastructure, at a rate of three to seven times the baseline cost, depending on how one does the math. The same holds true for freight systems that allow passenger operations, whereby increased track tolerance as required by the passenger service is a pricey endeavor. Taking the best case possible, let’s assume that the increase in maintenance cost due to shared-use is no more than double for each type of system. The issue of capacity then overtakes the maintenance cost argument and states that for a system to run most efficiently, it would have to run at capacity. Optimal system efficiency would not be possible if there are different operating speeds required for higherspeed passenger trains vs. freight train service. Therefore, the most cost effective operating and maintenance scenario gets thrown right out the window of that fast moving train in all shared-use circumstances. The primary function of infrastructure is that of an enabling and supporting role. As an entire system, the U.S. Interstate Highway system isn’t profitable, the global airline industry isn’t profitable, and even the most densely populated metro systems in the world aren’t profitable. So it all comes down to the financial investment and ongoing costs. There

Joseph M. Calisi

Amtrak’s Northeast Corridor succeeds in mixing high speed Acela Express consists with freight traffic.

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First introduced in 1978, the BOMBARDIER BiLevel car is the most popular double-deck commuter rail car in North America. Today, nearly 1,200 BiLevel cars are in operation at, or on order with, transit authorities in 14 cities across the United States and Canada. One of the keys to the success of the BiLevel car has been its ability to adapt to meet changing needs and requirements. The next step in that evolution is a BiLevel cab car equipped with a Crash Energy Management system, designed with an aerodynamic full-width cab that offers improved positioning and ergonomics for the engineer, and ready for the installation of PTC equipment. Upgrades to door and air-conditioning systems, increases in energy efficiency, and enhancements to passenger comfort are among other advancements making the BiLevel car better than ever.

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ENGINEERING HIGHER-SPEED RAIL

are hundreds of railway systems around the world and it is widely argued that no transit system on the planet makes a profit if you consider the transit operational income only. This is another subject of debate based on how income and expenses are calculated. Most systems that claim a profit do so based on other related interests, such as donated land in which the transit agency then builds and operates a separate business on that property. If there are subsidies available for shared-use infrastructure, most freight railroads worry that the spending of federal money on upgrading their tracks will prompt the Federal Railroad Administration (FRA) toward imposing tougher regulation. Congressional attempts at re-regulation have been made recently in response to rising freight rates, but shipments by rail are still noticeably cheaper than shipping by truck, so it would make sense to most pundits to allow the free market to regulate prices and not introduce another round of governmental ineptitude regarding a subject politicians have proven to know little or nothing about. The big picture is often missed, forgotten, or ignored during conversations regarding infrastructure projects, and rail-related projects are even more a casualty of near-sighted views. It is well known that the rail industry receives very little funding assistance and is an entire world away when compared to the subsidies allocated to the highway/trucking industry. Infrastructure is a support industry, and if the 22 RAILWAY AGE October 2014

traditional business case (as applied to rail, which is different than that usually applied to roadways) is the primary driving factor for moving HSR or HrSR forward in the U.S., we are doomed to spin our wheels discussing the impossible justification needed to advance the cause. However, if we could insert some serious leadership and vision along with a healthy dose of historical reality and knowledge, we may be able to come up with a solution that benefits all shareholders when directed by the technically relevant. The questions on the agenda today should be directed toward the technical/commercial balance and work toward a best-case scenario regarding our current starting position. Can we build a shared-use system? Yes. Can we justify a typical business case around that system? No. Do we need to re-calibrate our approach by educating and informing the general public, our politicians, and our industry colleagues? Absolutely. If we look at our freight and passenger rail systems as a means to support and grow the national economy by getting our colleagues to work in a cost effective manner, and if we value lower energy consumption and a lower-pollutiongenerating means of transporting goods across the country, and consider the improved quality of life and better road conditions by removing trucks from the highway system and the power of diversifying our infrastructure along with what that means for improved public safety and the nationâ&#x20AC;&#x2122;s core strength, this is a conversation worth having. RA

Joseph M. Calisi

Well-intentioned signage warns pedestrians and drivers, more accustomed to slower freight rail traffic, of Amtrak higher-speed rail (HrSR) operations in Michigan.

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ailway ge R A 2015 RAILROAD FINANCIAL DESK BOOK

Contents

DB1

A LOOMING SET OF CHANGES By David Nahass

DB10

Directory of FINANCIAL PLAYERS

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PREL_FULL page_fog_OCT 2014.indd 1

RAILROAD FINANCIAL DESK BOOK 2015

A looming set of changes

Pending new tank car regulations continue to grab the equipment By DAVID NAHASS, Financial Editor leasing and finance spotlight.

Cover and interior: William C. Vantuono

elcome to the 2015 Railroad Financial Desk Book. It feels like yesterday the cover closed on this computer and the 2014 Railroad Financial Desk Book was put to rest. The past twelve months have been a whirlwind; the next twelve months seem to be equally poised for rapid change in a rail market that continues to attract media attention and is flush with new investment capital. All the factors that were points of discussion in the past 12 months—the DOT-implemented regulatory changes to tank car design for flammable commodities, increasing valuation on existing railcars, huge new-car order backlogs, new entrants into the railcar lease and finance market, and a continued surge in demand for any assets that can be used to haul sand for hydraulic fracking or crude to market—continue to command the attention of people in the market who make their living investing in and leasing railcars. First, let’s tackle the obvious: By the time the loyal readership of Railway Age will be cracking the cover on this

year’s Desk Book, the Sept. 30, 2014 comment period on the DOT proposal for enhanced tank car standards will be complete. (Anyone who has not had a chance to peruse the document prepared by the DOT and PSHMA may do so here: http://www.gpo.gov/fdsys/pkg/FR-2014-08-01/ pdf/2014-17764.pdf.) Big questions about final approved design are likely to remain open and possibly be delayed before the final answer on the future of tank cars for flammables is finally reached. What seems inevitable is the elimination of the standard DOT 111A non-jacketed and non-insulated general purpose tank car from service carrying flammable commodities. This entire Desk Book could be devoted to this change alone. The proposed regulations and the process used to implement these changes are each divisive issues. While I’m not an expert on historical changes in car design, it seems the current proposal will be the most sweeping and most rapid implementation of a design change in the history of October 2014 RAILWAY AGE DB1

RAILROAD FINANCIAL DESK BOOK 2015

North American railroading. It will have broad economic impact across so many segments of the industry. Let’s summarize a few of the greatest challenges to the events that are unfolding for the DOT 111A tank car: • Deciding to modify or cut up existing cars requiring modification. • Addressing the timeframe for modification of non-compliant cars. • Managing limitations on modifications due to shop capacity. • Analyzing the potential erosion of rail network system efficiency as cars are removed en masse from service and train speeds are put under new caps. Whatever challenge to the industry one chooses to focus on in this looming set of changes, make no mistake: implementation in the initially suggested time frame (two years) will be virtually impossible. Take, for example, the potential for modification of existing cars to comply with the DOT 116A specification (the new car design will be designated the 116A to separate it from the castigated 111A). The number of cars that have the potential to be modified is still unknown. Some parties peg it as high as 70,000 and others as low as 45,000. Most parties seem to agree, however, that the capacity for shop space to modify tank cars is about 6,000 cars per year using current available shop capacity. While many parties will work to increase that capacity, conservative or aggressive, the two-year outlook seems untenable. DB2

RAILWAY AGE

October 2014

Is anyone in favor of the modifications? Certainly, those in the tank car shop and retrofit business and new car manufacturing seem poised to gain from the changes being proposed. The cutting up of existing cars combined with the massive retrofit needs of the industry should offer plenty of opportunities for profit for correctly positioned companies. As the shop network gets clogged and with manufacturing running at an annualized rate of more than 70,000 units, companies and end users may be willing to pay premium prices for any available capacity. Specifically to shop capacity, the retrofits required will impact the ongoing

One of the greatest challenges regarding the oldest DOT 111A tank cars is deciding whether to modify or scrap them. recertification requirements for tank cars (HM-216). There will also be a cascade effect as capacity for other tank and general freight car work will become stressed in areas of high concentration such as the Gulf of Mexico. Even now, finding capacity to perform a program to reline (paint) the

RAILROAD FINANCIAL DESK BOOK 2015

interior or exterior of a covered hopper fleet is a challenge. It is likely that this will only get worse. THREE VIEWS ON THE MARKET AND THE DOT

Getting information on how industry insiders see the current events of the day as they unfold is always important. The situation regarding the DOT regulations is so significant that, for the 2015 Railroad Financial Desk Book, I wanted to bring in the point of view of three different market segments: a component manufacturer, an analyst following the railroad industry and the manufacturers, and an end-user of equipment. I asked each of them a few questions about the current state of affairs and how they see the next few months and years shaping up. First up is WILLIAM P. O’DONNELL, Senior Vice PresidentSales and Marketing, Amsted Rail. DN: Is component supply a challenge for the WPO: Absolutely, it is a challenge. Without

industry today? putting fear in the marketplace, most people understand that this is a cyclical business that can build as many as 70,000 units per year and go as low as 12,000. Based upon current prognostication, component supply will be challenged for 2015 and 2016. Due to the large new car production numbers, we will have a “hand to mouth” environment. We will coordinate directly with builders to plan accordingly as

necessary; however, there is no replacement for enhanced communication between us and our customers. It is incumbent upon the builders to work directly with the component manufacturers to insure adequate supply. Failure to do so will increase component availability problems down the road. DN:

What are the challenges faced by the industry as it moves through this cyclical growth period? WPO: We are at the pinnacle of this current cycle. As an industry, we have been increasing capacity quickly to meet demand. In order to insure that capacity is available and to increase it, component suppliers must deliver a reasonable return on the capital being invested. When the industry contracts, it is far more difficult to make that return. Amsted has done a good job meeting that increasing industry-wide demand, but we need to maintain our need to receive a reasonable return. Maintaining the required quality level to meet the rigorous high speed and heavy haul demands of the North American rail marketplace requires big capex dollars. It takes thoughtful planning and design to do that effectively. DN: What

will the impact be of the changes being implemented by the DOT? WPO: No one can argue against increasing safety, as it is a core value of the industry. Changes to the tank car October 2014 RAILWAY AGE DB3

The 2015 Railroad Financial Desk Book is the first without Tony Kruglinskiâ&#x20AC;&#x2122;s byline. Tony, who died June 15, 2014, will always be an icon in rail equipment finance. As a tribute to him, here is his very first column for Railway Age, from our March 1989 issue. His take on the industry was rather prophetic, to say the least.â&#x20AC;&#x201D;William C. Vantuono

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RAILROAD FINANCIAL DESK BOOK 2015

specification will increase new car cost and the cost of maintaining the existing fleet. The modification/retrofit program needs to be properly coordinated or it will have a negative impact on the industry. It will stress the same component supply chain that is already at high capacity where demand is already outstripping supply. If the DOT wants to implement the retrofit in a short time frame, the demand for parts for the retrofits will impact component supply negatively. If the retrofit process is managed properly it can be integrated into the current demand cycle. Overall, the current projected changes will absolutely increase demand for components. DN:

Has the current rail cycle reached its peak or is demand still increasing? WPO: If you look at the past two to three years and look forward two to three years, it seems that we are at a peak in production and capacity. We expect it to slow down after 2016 and return to typical car build years. We, as an industry, have always managed our way through the cyclicality窶馬ot always without some struggles. Second is KRISTINE KUBACKI, Director-Industrials, Avondale Partners LLC. DN:

What are the most significant trends you see in rail today? KK: While only 4% of traffic today, crude by rail is definitely the topic of the decade. It has certainly transformed the equipment space, and is having important positive impacts on the railroads. The resurgence in the North American industrial economy has been predicated on our energy renaissance, and we are seeing strength across most major commodities the rails carry. Regulations and a stronger economy mean we have seen truckload capacity significantly tighten since the start of the year, and robust year-year over year growth (+5% YTD) in intermodal traffic. While the resurgence in traffic and shift in traffic patterns has negatively impacted rail service recently, the outcome has been good for equipment providers as most of the equipment parked in the severe recession has been deployed and railcar OEMs are witnessing a boom in equipment orders that has resulted in a backlog reaching a multi-decade high. DN:

What will be the impact of the DOT changes in tank car regulations? KK: Significant! We believe the impact will be significant to all parties involved including railcar builders, lessors, shippers, and railroads. We expect Transport Canada and the U.S. Department of Transportation to err on the side of safety given high media (and government) attention. We expect this will mean a significant portion of the crude and ethanol carrying fleet will be at risk of obsolescence, resulting in continued strong tank car demand for several years. We do see a major risk if rules prove to be so onerous

While only 4% of railroad traffic today, crude by rail has certainly transformed the equipment space. that the crude by rail proposition is no longer as economically attractive. We are also watching for the specifics from both U.S. and Canada, as a lack of harmonization in timelines and equipment specifications could mean major challenges for the industry as a whole. DN:

What are the challenges faced by the industry as it moves through this cyclical growth period? KK: There are certainly many challenges facing the industry that are unique to each party. Railcar OEMs (and the supply base) are struggling to keep up with demand and are dedicating tight manufacturing capacity to the most in-demand car types. Lessors are faced with strong car demand, but must worry about the impact of the regulations on existing tank car fleets and the increasing costs of new railcars. While we foresee a strong railcar market for several

U.S. Operating Lessor of Railcars & Intermodal Equipment Infinity is a private lessor of a variety of railcar rolling stock. Infinity prides itself on exceptional customer service and flexibility with regard to leases and railcar modifications to find the transaction and equipment to best serve our customers. Lease packages are tailored to meet customer needs, including a variety of short-term operating leases and long-term leveraged leases, as well as other assignment and deployment arrangements. Larry Smith Vice President Equipment Sales Office: 678-904-6306 Cellular: 678-296-9709 Email: lsmith@infinityrail.com

Lee Martini Vice President Sales & Marketing Office: 678-904-6315 Cellular: 404-290-9233 Email: lmartini@infinityrail.com

Corporate Offices 1355 Peachtree Street NE Suite 750 - South Tower Atlanta, GA 30309 www.infinityrail.com facebook.com/infinityrail twitter.com/infinity_rail A joint venture of IAM Affiliates and Perella Weinberg Partners

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RAILROAD FINANCIAL DESK BOOK 2015

years to come, the question in the back of everyone’s minds in this industry should be “when will the party stop and how bad the hangover will be?” The industry will over-build at some point, but that is why this has always been and will always be a cyclical industry! Our third participant is an equipment end-user who prefers to remain ANONYMOUS. DN: What

rail today?

are the biggest challenges to your company in

ANSWER: The

Long lead times on new car deliveries and resulting shortages could cause shippers to forgo new business opportunities.

RAILSOLUTIONS, INC. RAILSOLUTIONS Provides Quality Consulting and Advisory Services to Financial Institutions, Railroads, Leasing Companies and Shippers.

RAILSOLUTIONS, INC.

James D. Husband, President 1307 Jamestown Road, Suite 101; Williamsburg, VA 23185 (757) 903-4606 Fax: (757) 903-4705 jhusband@railsolutionsinc.com www.railsolutionsinc.com

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biggest challenges today are the escalating regulations and liabilities. These increase both the costs and the difficulties of shipping by rail. With regard to the shipping of non-crude oil and non-ethanol products, by anybody’s metrics, we have been shipping by rail safely for more than 100 years and have been extremely proactive in the pursuit of shipping by rail even more safely. Nonetheless we continue to see our business negatively impacted by companies inexperienced in rail shipping. These companies do not understand how to ship their products, how to protect their products during shipping, or how to respond to a product-related crisis event. As a result, our costs escalate due to regulations that don’t really address problems related to our actual products, to additional legal costs as the railroads move to shift more liabilities onto shippers (even though shippers do not control traffic on the rail), and to increases in the costs and expenses of expanding and repairing the infrastructure. This requires more resources to manage an ever-increasing set of regulations requiring more resources to manage records and reporting, etc. The net result is that we cannot serve some markets or business sectors as the total cost of transportation makes us uncompetitive. At some point, we feel forced to pursue certain markets via water. When that happens, everyone loses from a rail perspective.

DN:

What will the impact be of the changes being implemented by the DOT ? ANSWER: Based on the current proposals, we see three main results: One, there will be heavier cars. This results RailSolutions Offers: • Railroad Equipment Appraisal and Valuation Services • Portfolio Analysis and Lease Valuation Services • Equipment Remarketing • Railcar and Locomotive Inspections, and Technical Services • RailSolutions Publishes the Investors’ Guide to Railroad Freight Cars and Locomotives – A comprehensive reference manual covering market and valuation data on virtually all types of railcars and locomotives used in North American rail freight services.

RAILROAD FINANCIAL DESK BOOK 2015

in a loss of payload, which leads to more cars on the rails to support the same volume. This leads to more congestion, more infrastructure, more risk, and higher turn times. Two, there will be more congestion at shops due to the retrofit requirements and extensive car lining programs for cars in crude and ethanol service. Three, we expect extremely long lead times on new car deliveries, which may cause shippers to forego new business opportunities due to lack of available railcars. DN:

Has the current rail cycle reached its peak or is demand still increasing? ANSWER: Growth and demand will increase due to the pending regulatory changes. Significant caution is being expressed about the pace of change being contemplated by the DOT and the potential economic and industry-wide disruption that may occur as a result of those changes. Overall, the industry seems to be experiencing the euphoria and the inevitable worry that goes along with being at the top of cyclical market. Mix in the potential for uncertainty about the regulatory environment with growth in carloads trending ever upward and with new and used car values increasing, and you have an environment that has the potential to create a tremendous shift in the economics of railcar leasing. Many lessees have relied upon current lease market dynamics for years. As car

values continue to increase, there has to be a point at which lease rates move to stay in line with invested capital. Through the economic recovery in rail and rail equipment, low interest rates have shielded lessees of railcars from price increases in monthly lease costs that are usually present when the demand for cars outstrips supply. That road may be coming to an end. EQUIPMENT MARKET UPDATE

“And in other news . . . .” Sometimes one wonders if there is anything else to talk about in the rail market. Fear not! The rail market is alive and well and full of activity. Here is the update on almost all non-tank (or at least non-crude and non-ethanol) car related topics: SMALL-CUBE COVERED HOPPERS (SAND): “When will the madness end?” That’s what one industry source said to me after hearing that the small-cube covered hopper backlog was out into the third quarter of 2016. Combine that with street rumors on used car sales at almost new car prices. The sand market continues to be hot and is an industry focal point. One point of note: With supply and demand so out of balance, lease rates still seem relatively low. LARGE-CUBE COVERED HOPPERS (GRAIN): While not as attractive as sand cars right now, grain cars (partially as a result of demand for cars to haul sand bleeding into the 4,750-cubic-foot covered hopper market adding to the

Railonomics

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October 2014 RAILWAY AGE DB7

RAILROAD FINANCIAL DESK BOOK 2015

increasing rate pressure) continue to see rising rates, an increasing order book, and ongoing optimism. JUMBO COVERED HOPPERS (PLASTICS): In the new energy independent U.S., plastics production is increasing and growth is expected. Thousands of these cars have been ordered; look for additional orders and growth going forward. Don’t get caught at the turn: For those operators who have cars coming off five-and seven-year operating leases that commenced when the market and lease rates were softer, expect steep price increases. COAL CARS: Coal has lost the bloom of a contrarian rose, and asset prices for both rotary gondolas and rapid discharge hoppers have started to rise again. Lease rates are off trough lows and have developed some stability. Nonetheless, they remain well below the level that is necessary support new investment. Look for dwell times and velocity to find out how coal will fare in the next 12 months. Once the trains start rolling again, look for a pullback. Worried about coal concentration in your fleet? Sell why the selling is good as there are still plenty of buyers. MILL GONDOLAS: Not unlike coal, mill gon rents still do not support significant new car building, even though demand is reasonably strong. Recent secondary market sales blew the doors off in terms of sales price surprising even seasoned industry veterans. What’s behind it? A general feeling that the market for new cars will have continued

The right equipment. The right lease. The right people. Taking your product to market efficiently and reliably requires the right equipment. First Union Rail has just what you need: superior railcars, locomotives, and experienced professionals who can offer leasing terms and structures that make sense for your company. Let us help move your business forward with: Railcar operating/capital leases • High-quality, diverse fleet • Fleet management services Ready to learn more? Call today at 847-318-7575 • Firstunionrail.com © 2014 Wells Fargo & Company. All rights reserved. First Union Rail Corp. is associated with Wells Fargo & Company, a company that is not regulated as a financial institution, a bank holding company or an insurance holding company in Canada. WCS-1201452

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strength and more importantly that current (or close to current) new car pricing will be able to hold up for the next few years. TANK CARS: The tank railcar market is not limited to the flammables market. With demand for cars for hauling crude and ethanol continuing even as the industry plays the waiting game with the DOT, the rest of the tank car market remains under supply stress and price pressure across all segments. Expect the stress to continue as whatever the DOT regulatory changes are, continued strength in the tank car backlog will affect all tank cars, not just cars in flammables service. SECONDARY MARKET VALUES: When I started in the business of financing and leasing railcars, one thing that was amazing to see was the manner in which railcar and locomotive assets are able to hold their values. Watching railcars get sold between parties for a price that is higher than the original equipment cost is a head scratching phenomena that industry veterans get used to quickly. The past four to five years have seen significant increases in the prices of new cars. Still today, the mix of a railcar in the right service (say sand service), an executed lease agreement, and an optimistic future for a railcar can bring the same dynamics to equipment sales. The fair market value of certain car types may seem unbelievable to many investors who have seen railcar bull markets of year’s past

Ours is an industry of intelligent and thoughtful survivors who have weathered the cyclicality of this market through their decades of experience. The cyclicality favors continued high pricing over the next few years. turn into a bear market and paid the price for misplaced bull market enthusiasm. It’s best to rely on Yogi Berra and realize that “It’s tough to make predictions, especially about the future.” This is an industry of intelligent and thoughtful survivors who have weathered the cyclicality of this market through their decades of experience. The cyclicality favors continued high pricing over the next few years. If you want to run against the bulls, save up your capital for those lean bear years that may be ahead. Just be ready to wait and wait some more and—well, you get the idea. QUESTIONS? Set them free at dnahass@railfin.com. RA

EXPAND Our growing fleet of over 15,000 railcars serves various commodities and industries throughout the US, Canada, and Mexico. To learn more about our products and services, please call us.

1-888-4RAILCAR | smbcrail.com

October 2014 RAILWAY AGE DB9

2015 Directory FINANCE COMPANIES

CIT RAIL

30 South Wacker Drive, Suite 3000, Chicago, IL 60606; Tel.: 312-906-5700. CIT Rail leverages deep experience and one of the youngest, most diversified railcar and locomotive fleets in the industry. We have a longstanding commitment to providing attractive railcar leasing solutions to rail shippers and carriers. Our solutions free up capital for your growth priorities, increase efficiencies and reduce out-ofservice time.

COMPASS CAPITAL CORPORATION

An international asset finance and management company located in San Francisco and Chicago. The company’s major emphasis is arranging and acquiring lease investments, primarily in transportation equipment. We provide customized leasing services to finance railcars and locomotives, capital and/or operating leases, portfolio acquisition services. Peter Urban, Vice President–Rail Marketing, 200 S. Wacker Drive, Suite 3100, Chicago, IL 60607. Tel.: 312-674-4742; Fax: 312-421-2742; Email: purban@ compasscapitalcorp.com.

RAILROAD FINANCIAL CORPORATION

676 N. Michigan Avenue, Suite 2800, Chicago, IL 60611; Tel.: 312-222-1383; Fax: 312-222-1470; David G. Nahass, Senior Vice President, Email: dnahass@railfin.com; William J. Geiger, Vice President, Email: wgeiger@railfin. com. RFC represents domestic and international clients in the following areas: debt and lease financing of all railcar types including coal cars, tank cars and covered hopper cars for sand and plastics; railcar and locomotive fleet acquisitions and sales; lease brokerage; mergers and acquisitions; equity and debt financing of rail property acquisitions, fleet and lease restructurings and/or refinancing. RFC also provides continuing education for the industry. LESSORS

THE ANDERSONS RAIL GROUP

15173 North Road, Fenton, MI 48430; (810) 714-4626. Trent E. Marshall, VP & COO Maintenance of Way. The largest lessor of maintenance of way equipment in North America is a full-service leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 50 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. FCM develops leasing programs to cut equipment costs and provides leasing structures that are tailored to meet the rail industry’s specific and ever-changing needs. Visit us on the web at www.progressrail.com/leasing.

480 West Dussel Dr., P.O. Box 119, Maumee, OH 43537; Fax: 419-891-2749; Rasesh Shah, President Rail Group, 419-891-2958; Chuck Brown, Vice President Sales, Tel.: 419-891-6386; Email: Chuck_Brown@andersonsinc.com. Formed in 1989, The Andersons Rail Group has enjoyed steady growth in the number of cars leased and managed from Maumee, Ohio. Currently, our portfolio consists of approximately 22,000+ rail cars. To better serve our customers, The Andersons Rail Group operates a large fleet of mobile units, 20 repair facilities, and a steel fabrication facility to produce custom rail components; Randy Thomure, Vice President Repair Operations, Tel.: 419-8916687; Email: Randy_Thomure@andersonsinc.com. We understand the importance of having extensive knowledge about taxation, government regulations and railroad requirements. As a valued customer of The Andersons Rail Group, you can expect reliable equipment, flexible lease options and superior customer service. Please visit our website at: www. andersonsrail.com.

ARRANGERS

AMERICAN RAILCAR INDUSTRIES, INC.

PROGRESS RAIL EQUIPMENT LEASING

THE DAVID J. JOSEPH COMPANY

300 Pike Street, Cincinnati, Ohio 45202; Tel.: 513-4196200; Fax: 513-419-6221; Trey W. Savage, VP Rail Group; Ken Roseberry, Director Rail Equipment Group; Keith Kelsey, Ken Johnson, and Matt Siemer, Regional Sales Managers; Tom F. Pellington, Sr. Director Transportation Services; Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502-212-7365). The David J. Joseph Company’s Rail Equipment Group is a fullservice transportation company providing a broad range of services throughout North America. Single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchase and sale of portfolios, and private fleet management. Other services include railroad car dismantling for scrapping and parts reclamation. DB10

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100 Clark Street, St. Charles, MO 63301-2075. Tel.: 636.940.6020; Fax: 636.940.6100; Email: sales@americanrailcar.com; Website: www.americanrailcar.com. Agile, Responsive, Innovative. • Design • Manufacturing • Repair • Railcar Fleet Management • Railcar Leasing Contact us to find out how ARI can be your preferred railcar supplier.

RAILROAD FINANCIAL DESKBOOK 2015

C.K. INDUSTRIES, INC.

P.O. Box 1029, Lake Zurich, IL 60047-1029; Tel: 847-5501856; Fax: 847-550-1854; e-mail: rmeyers@ckrail.net; Richard E. Meyers, President. C.K. INDUSTRIES, a privately held corporation, began its U.S. leasing operations in 1980, and offers its services to shippers, short line, regional and Class I railroads in North America. New investment opportunities up to $10MM of both new and used types of freight cars will be considered. Our existing lease fleet offers a wide variety of car types to meet your lease requirements. We offer mid to long terms, either on a full service or triple net basis.

THE DAVID J. JOSEPH COMPANY

300 Pike Street, Cincinnati, Ohio 45202; Tel.: 513-4196200; Fax: 513-419-6221; Trey W. Savage, VP Rail Group; Ken Roseberry, Director Rail Equipment Group; Keith Kelsey, Ken Johnson, and Matt Siemer, Regional Sales Managers; Tom F. Pellington, Sr. Director Transportation Services; Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502-212-7365). The David J. Joseph Company’s Rail Equipment Group is a full-service transportation company providing a broad range of services throughout North America. Single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchase and sale of portfolios, and private fleet management. Other services include railroad car dismantling for scrapping and parts reclamation.

PROGRESS RAIL EQUIPMENT LEASING

FIRST UNION RAIL

One O’Hare Center, 6250 N River Road, Suite 5000, Rosemont, IL 60018; 847-318-7575; Fax: 847-318-7588; Rich Seymour, Vice President Sales and Marketing. First Union Rail, a Wells Fargo company, is one of the largest, most diverse railcar leasing companies in North America. We have a solid industry reputation for providing superior equipment and exceptional service. First Union Rail offers a variety of customized finance and operating lease structures, as well as marketing and transportation management services. Let First Union Rail’s team of professionals help find the right equipment to solve your transportation needs.

SMBC RAIL SERVICES LLC

300 South Riverside Plaza, Suite 1925, Chicago, IL 60606; 1-888-4RAILCAR. Gene Henneberry, President & CEO, (312) 559-4801; Tim Johnson, Senior Vice President Leasing, (312) 559-4805; Patrick McGrath, Vice President Leasing-Southeast, (312) 559-4821; Jeffrey Griffin, Vice President Leasing -Northwest, (312) 559-4820; Jeff Wilkison, Vice President Leasing – Southwest, (312) 559-4808; Mark DePaul, Vice President Leasing – Northeast, (312) 559-4822. SMBC Rail Services is a full service operating lessor, invested in all tank and freight car types, offering a broad selection of equipment leasing and financing products for the North American rail industry. SMBC Rail can structure a solution for all of your rail equipment needs, short and long term, full service or net leases, sale/leaseback, or portfolio acquisition. Visit us at www.smbcrail.com.

GATX CORPORATION

Thomas A. Ellman, President, Rail North America, GATX Corporation, 222 W. Adams Street, Chicago, IL 60606; Tel: 312-621-6200 Fax: 312-621-6546 GATX is a leader in the rail leasing industry with more than a century of experience, preeminent expertise in specialized railcars, and a growing international presence. GATX meets shipper and railroad needs with one of the largest lease fleets of tank and freight cars and locomotives in the world. We provide our customers with a unique mix of financial (global financing, valuation, structuring, leasebacks, joint ventures, partnerships) and mechanical (regulatory, maintenance, engineering, cleaning, inspection) services in North America. Contact via www.gatx.com or 1-800-428-8161.

GE CAPITAL, RAIL SERVICES

161 N. Clark Street, Chicago, IL 60601; Tel.: 800-4456126; Email:railinquiries@ge.com; Website: www. gecapitalrail.com. GE Capital, Rail Services offers specialty financing with deep rail industry experience and a highly diversified equipment portfolio. With over 100 years of experience, Rail Services offers locomotives and a variety of railcars to railroads and industrial companies which ship by rail across North America. A suite of repair and maintenance services, through the use of owned and authorized contractor shops, helps ensure quality and scheduling flexibility. Customers benefit from our deep technical and regulatory experience to make financial fleet decisions with confidence. Please visit our website at www.gecapitalrail.com or call us at 800-445-6126. LESSORS continued on following page

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RAILROAD FINANCIAL DESKBOOK 2015

LESSORS Cont.

GREENBRIER LEASING COMPANY

One Centerpointe Drive, Suite 400, Lake Oswego, Oregon 97035; 800-343-7188; Fax: 503-968-4383; Email: Marketing.Info@GBRX.com; Website: www.GBRX.com. Contacts: J.T Sharp, President; Larry Stanley, Vice President; Tom Jackson, Vice President, Marketing. Greenbrier Leasing Company provides a full range of operating and financial leases of railroad freight cars to shippers, short line, regional, and Class I railroads. In addition to owning a fleet of more than 10,000 cars, we develop financial structures customized to meet a multitude of customer requirements including; fullservice, net, and per diem leasing structures, with both short-term and long-term options, sale-leaseback and likekind exchanges as well as upgrade and modification programs. Our approach allows customers to meet current needs and position their business to capitalize on future opportunities. The Greenbrier Companies, Inc. manufactures a full range of freight cars designed for the carriage or intermodal containers, automotive products and vehicles, grain and agricultural products, forest and steel products, sand and cement, plastics and solid waste. We operate one of the largest repair and refurbishment networks with nearly 40 facilities strategically located facilities in North America, providing railcar repair, maintenance, refurbishment, wheel and axle services and railcar component parts. Greenbrier is also a leading provider of rail asset management services with a variety of proprietary software productivity tools and one of the most experienced teams in the industry.

HELM FINANCIAL CORPORATION

505 Sansome Street, Suite 1800, San Francisco, CA 94111; Tel: (415) 398-4510, Fax: (415) 398-4816; Brad Wind, Executive Vice President-Director of Marketing; Ed Garvey, Senior Vice President of Marketing & Acquisitions; Francois Bernard, Senior VP Mechanical Locomotives, Marty Giubardo, VP Equipment Sales; Full service rail equipment leasing company offering railcars and locomotives for lease and/or sale. For more than 30 years, Helm has offered operating leases of freight railcars and locomotives to railroads and shippers throughout North America. In addition, Helm Rail Equipment Services specializes in selling locomotive parts to the railroad industry. Helm’s diverse fleet of railcars and locomotives is available to meet all your rail equipment needs. Please call 415-398-4510 or visit our website at www.hlmx.com for additional information.

INFINITY RAIL, LLC

1355 Peachtree Street, NE, Suite 750, Atlanta, GA 30309; Website: www.infinityrail.com. Larry Smith, VP-Equipment Sales; Tel.: 678-296-9709; Email: lsmith@ infinityfunds.com; Lee Martini, AVP – Sales & Marketing; Tel.: 678-904-6315; Email: lmartini@infinityfunds.com. Infinity Rail, LLC, is an Operating Lessor with a fleet of over 7,000 freight cars. We offer our customers both DB12

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financial and operational flexibility. We offer Full Service, Net and Per Diem Leases to Shippers and all Class I, Regional and Short Line Railroads. A broad spectrum of general use and specially modified equipment is represented in the Infinity portfolio. Our fleet is comprised of covered hoppers, boxcars, gondolas, open top hoppers, flatcars and intermodal equipment. Our in-house mechanical expertise allows us to offer you equipment maintenance and modifications that keep your leased railcars working for you.

MACQUARIE RAIL INC.

1 North Wacker Drive, 9th Floor, Chicago, IL 60606; Tel.: 312-756-3880; Fax: 312-756-3847; Email: railinfo@ macquarie.com; Website www.macquarierail.com. Macquarie Rail Inc. is a freight car lessor serving the North American marketplace. Through combining an experienced team of rail veterans with the strength and expertise of the Macquarie Group, we are building a diverse portfolio of equipment to serve the varied needs of railroads and rail shippers.

MITSUI RAIL CAPITAL, LLC

71 South Wacker Drive, Suite 1800, Chicago, IL, 60606 Phone 312-803-8880: John O’Bryan, President; Dan Penovich, Vice President Sales and Marketing; David Kerr, Director of Marketing; Dana Koenig, Director Sales; Dan Linklater, Director Sales; Scott Carroll, Director Sales. A highly experienced management team, a fleet of more than 10,000 modern freight cars, and high-quality service combine to give Mitsui Rail Capital customers an edge when it comes to transportation. In addition to a diverse fleet of the latest rail equipment, Mitsui Rail Capital offers fleet management and maintenance services as well as On-Trax, our proprietary internet-based system for fleet tracking, maintenance, and component wear management. Mitsui Rail Capital, LLC offers both net and full service terms as well as customized, value-added financing options. Our goal is to exceed customer needs in an increasingly dynamic and challenging environment. Mitsui Rail Capital, LLC is an affiliate of Mitsui & Co. Ltd.

PROGRESS RAIL SERVICES

Progress Rail Services, a wholly owned subsidiary of Caterpillar Inc., is a leading supplier of a full range of locomotive, railcar and track products and services. Our service and repair facilities are strategically located around the globe – with a network of more than 130 locations across the United States, Canada, Mexico, Brazil, Italy, Germany, and the United Kingdom – and our mobile crews offer even greater service flexibility. Our extensive inventory of parts and components allows us to reduce down time and return units quickly to service. We also offer recycling and demolition services. Our diversity of products and services means more value for our customers. Through its acquisition of Electro-Motive Diesel, Progress Rail furthers its commitment our customers, providing

RAILROAD FINANCIAL DESKBOOK 2015

industry-leading products and services. Founded in 1922, Electro-Motive Diesel is an original equipment manufacturer of diesel-electric locomotives. Contact Progress Rail Services, P.O. Box 1037, Albertville, AL, 35950, (800) 476-8769. www.progressrail.com.

RELCO LOCOMOTIVES, INC.

P.O. Box 83282, Baton Rouge, LA 70884. Tel.: 815-4673030; Website:www.relcolocomotives.com. Relco, as one of North America’s leading locomotive rebuild, remanufacturing and leasing companies, can provide a full range of locomotive leasing and maintenance services. Since 1961, RELCO has developed a reputation for providing the finest motive power and custom maintenance packages to fit any need: • Full line of both switching and road power available. • Specifications ranging from qualified to completely custom remanufactured. • Aftermarket systems upgrades available, including radio remote controls, microprocessor control systems, fuelmanagement systems, etc. • Nationwide full-maintenance programs available. • Net, full-service, financial and sale/leaseback programs.

TRINITY INDUSTRIES LEASING CO.

2525 Stemmons Freeway, Dallas, TX 75207. 800-631-4420. www.gotilc.com. D. Stephen Menzies, Group President, steve.menzies@trin.net; Eric Marchetto, Executive V.P. & Chief Financial Officer, eric.marchetto@ trin.net; Mark VanCleave, Executive V.P., Industrial Sales & Leasing, mark.vancleave@trin.net; Jesse Crews, V.P. & Chief Investment Officer, jesse.crews@trin.net; Bob Hulick, Executive V.P. & Chief Mechanical Officer, bob.hulick@trin.net; John Guarino, V.P., Portfolio Management, john.guarino@trin.net. Trinity Industries Leasing Company, with a fleet of approximately 74,000 railcars, offers railcar leasing, comprehensive management and administrative services as well as maintenance services. Also available is access to the railcar manufacturing resources and additional railcar services provided by TrinityRail®. An overview of TrinityRail’s full portfolio of rail transportation products and services is available at www.trinityrail.com PROFESSIONAL SERVICES

AMERICAN RAILCAR INDUSTRIES, INC.

RAILROAD APPRAISAL ASSOCIATES

Division of The Occor Company; Management Consultants providing a variety of consulting services to the railroad and urban transportation industries; and the financial institutions and leasing companies which serve them. Railcar and Locomotive Appraisal & Inspection Services for New and Used Equipment, Rail Equipment Portfolio Reviews and Valuation, Market Studies, General Consulting. We have over 20 years of market experience and data. Patrick J. Mazzanti, President; Ronda Lemons, Assistant. Headquarters: 1914 Springdale Drive, Spring Grove, IL 60081, (815) 675-3300; E-mail: pat@railroadappraisals.com.

RAILSOLUTIONS, INC.

1307 Jamestown Road, Suite 101, Williamsburg, VA 23185, 757-903-4606; Fax: 757-903-4705; Email: jhusband@railsolutionsinc.com; Website: www.railsolutionsinc.com; James D. Husband, President. RailSolutions provides a broad variety of railroad equipment-related consulting, technical and advisory services to financial institutions, railroads, shippers and fleet owners with a primary focus on equipment valuation and appraisal services. Additional areas of expertise include railcar and locomotive inspections, equipment remarketing, equipment repair and overhaul cost analyses, and portfolio valuations. RailSolutions draws on over 40 years of railroad industry experience in railcar and locomotive equipment valuations supported by both a sound base of market data and advanced analytical techniques. RAILROAD ACQUISITION SPECIALIST

PROGRESS RAIL EQUIPMENT LEASING

100 Clark Street, St. Charles, MO 63301-2075. Tel.: 636.940.6020; Fax: 636.940.6100; Email: sales@americanrailcar.com; Website: www.americanrailcar.com. Agile, Responsive, Innovative. • Design • Railcar Fleet Management • Manufacturing • Railcar Leasing • Repair Contact us to find out how ARI can be your preferred railcar supplier. October 2014 RAILWAY AGE DB13

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:

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

FRA Part #

232 233 234 235 236 237 238 239 240 242

Last Update Effective:

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .5-14-13 . . . . . . . .6-25-12 . . . . . . . .7-13-12 . . . . . . . .6-25-12 . . . . . . . .1-28-14 . . . . . . . .1-28-14 . . . . . . . .6-25-12 . . . . . . . .6-25-12

DATES: (1) Written comments must be received by November 10, 2014. FRA anticipates being able to resolve this rulemaking without a public hearing.

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

BKHORN 222 BKRFRS 224 BKHS 228 BKLSS 229 BKSLI 230 BKSAS 231 BKBRIDGE 237 BKLER 240 BKCONDC 242 BKBSS

232

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 Use of Locomotive Horns Reflectorization of Rail Freight Rolling Stock Hours of Service Locomotive Safety Standards Steam Locomotive Inspection Railroad Safety Appliance Standards Bridge Safety Standards Qualification and Certification of Locomotive Engineers Conductor Certification 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

BKMFR

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

The Locomotive Safety Standards cover the laws governing inspections and tests, brake system, draft system, suspension, electrical, cabs and cab equipment plus more! Softcover. Spiral bound.

BKLSS

Locomotive Safety Standards

49 CFR 215. Prescribes the minimum safety standards for freight cars allowed by the FRA. Includes safety standards for freight car components, car bodies, draft system, restricted equipment and stenciling. Softcover, spiral.

46.00

BKSTC

Signal and Trainâ&#x20AC;&#x2C6;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

$11.00

Order 50 or more and pay only $9.90 each

Part 215: Freight Car Safety Standards

Each

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

$27.95

Part 229: Locomotive Safety Standards

13.50

BKPSS

Ph: (402)346-4300 â&#x20AC;˘ Fax: (402)346-1783 Email: orders@transalert.com

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

25 or more

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

1809 Capitol Ave, Omaha, NE 68102

Mechanical Department Regulations

9.90

BKTM

The Railway Educational Bureau

FRA proposes amendments to the brake system safety standards for freight and other non-passenger trains and equipment to strengthen the requirements relating to the securement of unattended equipment. Specifically, FRA would codify many of the requirements already included in its Emergency Order 28, Establishing Additional Requirements for Attendance and Securement of Certain Freight Trains a nd Vehicles on Mainline Track or Mainline Siding Outside of a Yard or Terminal. Among the items proposed is a requirement that all locomotives left unattended outside of a yard to be equipped with an operative exterior locking mechanism.

BKFSS

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

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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. 10/14

AMTRAK’S NEW WHEELS HIT THE RAILS

“S

hovel-ready projects” were the buzzwords in 2009, when a new presidential administration suggested it valued Amtrak’s worth to the nation highly. But even as such support has trickled through in capital dollars, and more-than-zero operating budget proposals, the

26 RAILWAY AGE October 2014

literal nuts and bolts of the nation’s passenger railroad, its rolling stock, seemed mired in antiquity, with no quick-fix, “shovel-ready” solution at hand. That’s finally beginning to change this year, as Amtrak began entering new locomotives and new passenger rolling stock into service in measurable and visible (if still modest)

Joseph M. Calisi

New locomotives and rolling stock have finally begun to arrive on the property. Suppliers and other Amtrak supporters say more is needed.

By DOUGLAS JOHN BOWEN, Managing Editor, and WILLIAM C. VANTUONO, Editor-in-Chief

The ACS-64 (“American Cities Sprinter) from Siemens is the Northeast Corridor’s new electric workhorse, replacing locomotives that have provided millions of miles of service.

quantities. Financed by its congressional overseers, by a Midwest compact of states (aided by California), and even by Amtrak itself (through borrowing power), a range of gear is bound to first supplement, and eventually supplant, equipment that in many cases precedes Amtrak’s 1971 birthdate, sometimes by more than a decade.

VIEWLINER ORDER MIX ADJUSTED

Amtrak’s 130 Viewliner II cars are slowly appearing on the company’s network, mostly in the Northeast, as autumn began, as CAF USA continues producing the cars at its Elmira Heights, N.Y., facility. Most cars will be deployed on eastern long-distance routes, such as the Lake Shore Limited, October 2014 RAILWAY AGE 27

Cummins-powered Siemens diesel-electric locomotives are on tap for the Midwest, Pacific Northwest, and California.

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Silver Star, and Silver Meteor, but the baggage cars will be used across the country, Amtrak says. The order also originally identified 25 sleeping cars, 25 dining cars, 25 baggage/dormitory cars, and 55 baggage cars; all will first supplement, then replace, existing Heritage Fleet rolling stock that has earned its euphemistic name: Amtrak inherited its equipment pool in 1971 that included, and still includes, rolling stock produced during the 1950s. In late August, however, Amtrak acknowledged it had adjusted its Viewliner II order “to address business needs,” reducing the number of baggage-dorm cars from 25 to 10, while increasing baggage car production from 55 to 70. CAF is expected to deliver all 130 Viewliner II cars by late 2015. “Capable of moving at speeds of up to 125 mph, the Viewliner II cars will be interoperable with the Viewliner I, Amfleet II (long-distance), Horizon, and remaining Heritage cars, as well as all Amtrak electric and diesel-electric road locomotives,” Amtrak emphasizes. The sleeping cars include 11 roomettes, two bedrooms, and one accessible bedroom in accordance with Americans with Disabilities Act (ADA) requirements. Interior components, installed in a modular system, are being manufactured separately by RailPlan, Amtrak says. Unlike the Viewliner I design (and predecessor Slumbercoach accommodations), the roomettes do not

All About Railroading by Railway Age Editor William C. Vantuono

All About Railroading-Second Edition is the perfect way to introduce your newly hired employees to the many careers in and basic concepts of railroading. All About Railroading presents—in 112 beautifully illustrated pages containing nearly 200 color photographs and diagrams—every aspect of the North American railway industry: freight operations, freight locomotives, freight cars, intercity and commuter rail, light rail, rapid transit, engineering, and signaling & communications. Plus, there’s a glossary of railroad terms and an information resource directory listing dozens of web sites. Softcover. $33.95 All About Railroading BKAARR

1-800-228-9670 or www.transalert.com The Railway Educational Bureau

1809 Capitol Ave., Omaha, NE 68102 Fax: (402) 346-1783 E-mail: orders@transalert.com 1098 Venetia Road • Eighty-Four, PA 15330 Tel. 888.872.4612 or 724.942.1473 sales@signalcc.com

28 RAILWAY AGE October 2014

Please add $9.80 for ground delivery on a single copy in US/Canada. All other countries, pre-payment is required. Company invoicing is welcome, shipping will be added. Contact us for S&H on orders for more than 1 copy. Please FAX orders to: 402-346-1783. Appropriate Air Rate charges added. US funds only. Allow 15 days for delivery. Nebraska residents add 5.5% tax.

Siemens

AMTRAK LOCOMOTIVES AND ROLLING STOCK

GE’s software speaks Train Optimization. Variables like train size, track conditions and driver variation are enemies of efficiency. Trip Optimizer system – part of the RailConnectTM 360 product line from GE – functions as an intelligent cruise control for trains, repeatedly adjusting its speed based on information such as network traffic, weather and track grade to optimize fuel usage. Because when GE’s software talks to machines, everything works the way it was intended. gesoftware.com/predictivity/rail

include toilets; passengers will share two restrooms and a shower at one end of the car, Amtrak says. Dining cars seat 46 and include full-service galley kitchens, while carts that roll on and off the cars allow for easier stocking via a side door. More such equipment still is needed, observes Railway Supply Institute (RSI) President Tom Simpson. But from the

rail supplier’s perspective, “The uncertainty and unevenness of investment in rail passenger equipment poses problems not just for Amtrak, but for its suppliers as well,” says Simpson, an ardent Amtrak supporter. Simpson points to the combative congressional appropriations process as a major factor, noting Amtrak can’t plan

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

H e r m i t a g e , PA U S A 1 6 1 4 8 Te l e p h o n e 1 - 7 2 4 - 3 4 7 - 0 2 5 0 w w w . E l l w o o d C r a n k s h a f t G r o u p . c o m 30 RAILWAY AGE October 2014

Amtrak

AMTRAK LOCOMOTIVES AND ROLLING STOCK

AMTRAK LOCOMOTIVES AND ROLLING STOCK Opposite page: Viewliner II cars under construction at CAF USA’s Elmira, N.Y. production facility.

adequately for longterm investment based on annual funds that may or may not exist. As “for the [Obama] Administration, intercity passenger rail was a big deal several years ago. I don’t think they’ve lost interest, but I don’t think they’ve followed through.”

MIDWEST PUZZLE PIECES

New Amtrak equipment of any kind for the U.S. Midwest will rely in large measure on Midwest states themselves, joined by a very non-Midwest powerhouse, California, which will fund up to 175 bilevel passenger coaches for existing and future intercity routes linked by the Chicago Hub. California and three Midwest states now plan to acquire an additional 45 bilevel cars from Nippon Sharyo. The states had ordered 130 cars that are being assembled in Rochelle, Ill. That contract provided add-on options at a slightly increased cost, depending upon car type. The order will now include 122 Midwest corridor cars and 175 California cars. The first of these cars are expected to enter service by 2016. Says Midwest High Speed Rail Association (MHSRA) Executive Director and CEO Richard Harnish, “It’s exciting that there’s a new factory in Rochelle, assembling its own carshells with American steel.” He also notes that last month

the state of Michigan resumed its pursuit for two sets of Talgo tilt-train equipment, with an eye toward Amtrak HrSR operations between Chicago and Detroit—in essence, pursuing a course that nearby Wisconsin Gov. Scott Walker scuttled. Says Harnish, “The governor of Wisconsin ran [his campaign] on killing Milwaukee-to-Madison rail service. Surprisingly, he’s now interested in boosting existing Amtrak service between Milwaukee and Chicago,” though the equipment that would protect such service has yet to be identified. In part that’s because Illinois, leading the Midwest passenger rail charge, is looking to add frequencies to Amtrak’s skeletal existing route network, such as Chicago to Detroit, while adding more routes, notably “moving forward with getting Amtrak service to Rockford [Ill.] and eventually into Iowa.” Host freight railroads are an important consideration, however; Harnish notes any Amtrak service west “from Rockford to Dubuque,” Iowa, still requires a trackage rights agreement with CN. The Midwest also will benefit to a degree from Amtrak’s Viewliner order, he notes, primarily through the Lake Shore Limited. NEW POWER IN PLAY

Amtrak’s most pressing motive power requirements are on the Northeast Corridor, where its Acela Express high speed trainsets—which were plagued with early technical

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AMTRAK LOCOMOTIVES AND ROLLING STOCK

problems—are approaching 20 years old, and its electric locomotive fleet (with the possible exception of the Acela’s companion “motor,” the HHP8) has performed well beyond expectations, and far longer than originally thought. The NEC’s time-honored old workhorses, the AEM-7s, affectionately called “toasters” or “Swedish meatballs” (owing to their Scandanavian origin), are being put out to pasture and replaced with a new thoroughbred, the Siemens-built ACS-64. Seventy of these new-generation locomotives are entering revenue service; they’ll eventually become the mainstay of NEC motive power. The ACS-64 can accelerate 18 Amfleet coaches with a Head End Power (HEP) load of 1,000kW to 125 mph in just over eight minutes. It features an integral monocoque widebody, double-cab suited for push-pull operation, and designed to allow compression forces of 800,000 pounds of buff load. Instead of a “conventional” mechanical safety concept in accordance with American Crash Standard AAR S-580 with collision and corner posts, the ACS-64 features a front end Crash Energy Management (CEM) system that provides better safety to crews while offering the advantage of lower weight and better reparability. Since the NEC has three different a.c. catenary voltages, the ACS-64 is designed for 25kV 60Hz, 12.5 kV 60 Hz, and 12 kV 25Hz. Traction and locomotive control is performed

Experience in Passenger Rolling Stock of all types.

by the Siemens SIBAS® 32 control system. The ACS-64 contains a 100% redundant HEP and AUX inverter system. It can operate at full speed at 100% traction power with one failed HEP inverter, or with a potential delay with one or two traction inverter or traction motor failures. Regenerative braking up to 100% rated power is possible, depending on the actual receptiveness of the grid. Main line electric locomotives typically spend approximately 8% of operational time in electrical brake mode, and given today’s average electrical energy cost, this, combined with efficient electrical components, can add up to considerable energy savings. Each identical operator’s cab is equipped with three interchangeable 10-inch displays. A primary and a secondary screen are mounted in front of the operator, and one is mounted in front of the assistant. The ergonomically designed operator’s console is an adaptation of the European Vectron design for North American requirements. On July 2, Amtrak issued an RFP for up to 28 next-generation high speed trainsets to replace its Acela Express equipment. The RFP followed a decision by Amtrak and the California High-Speed Rail Authority not to seek a joint order of HSR equipment. Current manufacturers of HSR equipment, defined as “manufacturers with equipment in commercial operation at speeds of at least 160 mph,” have submitted bids, which were due Oct. 1.

2015 Annual Conference in conjunction with

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Communications & Signals Engineering Services Maintenance Passenger & Transit Structures Track

Submission Deadline: Dec. 15 Please visit www.arema.org for more information and to submit your paper online. 32 RAILWAY AGE October 2014

AMTRAK LOCOMOTIVES AND ROLLING STOCK

The performance-based specification for these trainsets states that they must be capable of meeting or exceeding current Acela Express trip times on the existing NEC infrastructure and offer 40% more seats. Despite its technical problems, Acela Express service has proven exceedingly popular with passengers and has handled steadily increasing demand. Ridership is up 7% from a year ago, and trains are often sold out, especially during peak periods. While the new electric equipment for the NEC may be Amtrak’s most glamorous, two new diesel-electric locomotive models are being built for services in California, the Midwest, Pacific Northwest, and other areas by EMD (using a parent company Caterpillar prime-mover) and Siemens (with a Cummins powerplant). EMD is supplying up to 20 F125 EPA Tier 4-compliant “Spirit” series locomotives to the Southern California Regional Rail Authority for operation on Metrolink. The F125 (125 mph) uses a turbocharged, 20-cylinder, fourstroke Cat® C-175-20 diesel engine, and includes an SCR (selective catalytic reduction)-only aftertreatment system to meet Tier 4 standards. The Siemens “Charger™” passenger locomotive, scheduled to debut in 2016, is the company’s first North American diesel-electric locomotive. An initial 32 units have been ordered for Amtrak operations in the states of Illinois, California, Michigan, Missouri, and Washington. The Charger™ is powered by a Cummins 4,400 hp (3,281 kW)-rated 16-cylinder Tier 4-compliant QSK95 and is capable of a top speed of 125 mph. The order is worth $225 million and includes options for another 225 locomotives—75 for use in regional services and another 150 for intercity services. The initial 32 locomotives will be manufactured at the Siemens plant in Sacramento, Calif. Both of these higher-speed locomotives are compliant with PRIIA 305-005 Next Generation Locomotive specifications. RA

MIDWEST SUPPORT FOR CHSRA, NEC Many Midwest passenger rail advocates for decades have scorned the attention and funding captured by Amtrak’s Northeast Corridor, and feign disdain over California’s high speed rail program. Not Rick Harnish, who hails both projects as leading indicators and precursors to bolstering Midwest high speed hopes even as the region pushes for incremental higher-speed rail (HrSR) gains.

No Nonsense Just Economics

Indeed, Harnish’s Midwest High Speed Rail Association (MHSRA) consistently releases supportive statements and press releases touting either or both coastal rail efforts. “We need a nationwide network of fast dependable trains, and the Northeast Corridor gets a piddling amount of money; it’s insane,” Harnish says. Reminded that fellow Midwesterners often resent the NEC’s very existence, Harnish replies, “Who presses elected officials to make sure they have representatives on the Amtrak board? The Northeast Corridor people do. You can complain endlessly, or you can say, ‘Know what? I gotta get my congressman to make such a move.’” MHSRA’s goal is aided if and when U.S. HSR succeeds somewhere in the 50 states, even if it’s not in the Midwest first, Harnish insists. “The only way to prove what HSR can do is to build one, even if it’s not in the Midwest,” he says. “A transformative effect” is needed, and the best candidate so far, “the one that’s farthest along, is California.”

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VIA Rail Canada ‘s goal is to reduce human error by installing its GPS Train Safety System, which utilizes Wi-Tronix’s Attention Assist, on all locomotives.

MULTI-PURPOSE MONITORING TECHNOLOGY

Locomotives are valuable mechanical assets. Here’s how four railroads, working with an innovative supplier, are getting the most out of these complex machines. By WILLIAM C. VANTUONO, Editor-in-Chief

William C. Vantuono

athering data, interpreting it, and applying it to improve efficiency and safety is an increasingly important function in contemporary railroading. “Intelligent” locomotives that generate data related to fuel consumption, health status, and even engineer compliance with train operation protocols and safety procedures are now commonplace. All of this is possible with integrated remote monitoring technology. Development and application of this multi-purpose technology has grown to the point where many railroads are finding it almost indispensable. One of its leading suppliers is Wi-Tronix LLC, of Bolingbrook, Ill. Railway Age was recently provided the opportunity to learn how several major railroads are applying this technology. The heart of Wi-Tronix’s technology is the Wi-PU (Wireless Processing Unit), described as “a highly capable mobile computer that can be customized to fit specific requirements.” Wi-Tronix’s first Wi-PU installation occurred on May 27, 2005, on BNSF locomotive number 9932. Several months later, Florida East Coast received its first WPU. CN received its first Wi-PU in 2006. Today, CN, BNSF, Kansas City Southern/KCS de México have Wi-Tronix technology installed on their entire locomotive fleets. Amtrak’s new Siemens-built ACS-64 Northeast Corridor electric locomotives have Wi-PUs as an OEM installation. Seventy VIA Rail Canada locomotives have been retrofitted. One-hundred twenty-five installations are under way on CP, and CIT Rail’s entire locomotive lease fleet is being equipped. Among the newest installations are the 18 Sumitomo diesel multipleunits being delivered to Toronto’s Metrolinx for the new Union Pearson Express. Fuel costs are the second-largest railroad expense, after labor. Monitoring and alert-providing technology such as what Wi-Tronix supplies can go a long way toward reducing that expense. But as railroads like VIA Rail Canada, BNSF, Indiana Rail Road, and Florida East Coast related at the company’s annual User’s Conference, this technology has many other uses.

VIA Rail Canada

VIA Rail Canada, according to Director of Corporate Architecture and Emerging technology François Blouin, is implementing GPS Train Safety System, a train safety and locomotive security system that utilizes the Wi-Tronix Attention Assist product. “The system will fill a gap until PTC comes, however at present there is no regulatory plan,” Blouin said. “PTC is highly complex, and will be difficult to implement consistently across the railroads that VIA uses. Our engineer base is getting older. There is a new generation of engineers coming up that are more used to technology, rather than memory-based safety. In Canada, there is limited use of information technology for train safety. Our goal is to reduce human error.” GPS train, which Blouin referred to as “passive PTC,” displays route characteristics, works on any railroad, signalized or dark, and displays and updates train location in real-time. The program has four phases; VIA Rail is currently on Phase 2. The system October 2014 RAILWAY AGE 35

ASSET TRACKING

provides alerts on approaching speed restrictions with a real-time display and a map of critical infrastructure control elements. It is expected to improve operational safety in low visibility conditions. A proof of concept is expected in 2015. Phase 3 will add an interactive display in 2016. Phase 4 will have the system integrated with rail traffic control in 2017. The first live test of GPS Train was on Sept. 8. Another new technology called V2V (“Vehicle to Vehicle”) is in the exploratory stage. This technology is a railway crossing safety system that involves a warning signal being sent to a highway vehicle as it approaches a crossing. Transport Canada is currently developing communication standards for this technology. BNSF

BNSF, according to Senior Manager Operating Practices Alex Dalton, is using Wi-Tronix technology for a wide variety of operations and transportation functions. The data gathered by each locomotive Wi-PU is sent directly to BNSF’s Metwork Operations Center in Fort Worth Tex. Currently, there are 4,622 Wi-PUs installed across BNSF’s locomotive fleet. Use of the technology has evolved “from humble beginnings with a handful of locomotives” to a BNSF-hosted data center server processing a tremendous amount of information. BNSF’s use of Wi-Tronix technology is applied across three basic platforms: Fuel Monitoring, which provides fuel tank level, excessive idle, and fuel burn calculations; Locomotive Health, with data obtained through cameras, event recorders, and fuel sensors; and Remote Auditing. The latter is tied in with BNSF’s Autoscan system, which is used for monitoring training crew locations, and for compiling the railroad’s Engineer Scorecard, which is largely based on train handling; and Energy Management, for compliance and fuel usage. Autoscan is similar to the Wi-Tronix exception-handling function, for at-risk and non-at-risk exceptions. Dalton says that BNSF processes more 36

RAILWAY AGE

October 2014

than 3,500 event recorder downloads per day on 1,000 train starts. It detects exceptions and their GPS-based locations (control points, switches, crossovers) for trains and locomotives. The system can take an audit window from 48 hours to real-time. The data can be offloaded and preserved and can generate automated still images. Eventually, it will be tied in with BNSF’s PTC rollout. Indiana Rail Road

On the Indiana Rail Road, Wi-PUs are installed on all of the railroad’s 22 locomotives. The data is used by the Mechanical, Operations, and Engineering departments, according to the railroad’s Cleveland Elliott. The Mechanical department obtains GPS-based location data, whether a locomotive is operating on its home territory or on a foreign road. This ease of location determination is helpful for Mechanical people doing line-of-road repairs. The fuel monitoring function detects low fuel levels, unexpected rapid fuel level drops (for example, if someone is attempting to steal diesel fuel by siphoning it out of a fuel tank), and fuel overconsumption. Daily fuel summaries are generated to estimate when the next refueling should occur; this assists the railroad with managing its monthly fuel inventory. Low water temperature alerts help prevent freezing damage to a diesel engine block. Other fault detection functions help provide the Mechanical department with the correct repair parts to take to a line-ofroad repair location. INRD’s Engineering department uses Wi-PU data to check for “harmonic rock,” an indicator of a potential track issue. Elliott says INRD has been able to avoid 20 to 30 derailments in the past year with this technology. Emergency brake applications are monitored to inspect the rail for damage that can occur when a train goes into emergency. INRD’s Operations department uses this technology to monitor its engineers for such issues as hard couplings, overspeed conditions, power braking

episodes, stretch braking, excessive throttle modulation, and emergency braking (most INRD trains are operated with one person in the cab). “Our engineers are much more mindful of how they are operating the train,” says Elliott. The technology is also useful for training new engineers. It assists them with learning the proper procedures for throttle modulation, stretch braking, excessive train run-in (slack control), excessive slack take-up, hard couplings, and speed control. It is also used to ensure horsepower per ton (HPT) compliance as well as compliance with rules regarding cell phone use. Florida East Coast

On the FEC, according to Manager of Energy and Process Improvement Tom Dutrieux, data generated by Wi-PUs tracks total engine hours, idle time, and fleet utilization. Combined with gallons per hour data, the system generates a daily fuel report, low fuel alerts, and system health alerts. It also produces a train trip summary, asset details, fueling history for a particular locomotive, and train handling exceptions (such as excessive idle time). Dutrieux says that in the past year the railroad has lowered its fuel costs by approximately $2 million. Total engine hours have been reduced by 7.1%, and total idle hours have been reduced by 4.6%, for example. This technology, according to Wi-Tronix, has many other uses. For example, it can track and generate reports for daily utilization of AESS (auto engine start-stop) systems and APUs (auxiliary power units). It can help stop main line fuel run-outs through low fuel level detection, and interface with OEM and non-OEM interfaces that support control system fault detection (for example, traction motor flashovers). Safer operations are possible by leveraging train handling alerts that monitor rule compliance (overspeed, hard couplings, severe weather). In terms of sustainability, the technology can be used to verify that a locomotive is in compliance with local noise pollution ordinances, as well as monitor engine emissions.

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ASSET TRACKING From basement to boardroom

Wi-Tronix, which started in the basement of President Larry Jordan’s home 10 years ago, now occupies a 21,000-square-foot facility in Bolingbrook, Ill. Its customers include BNSF, CN, KCS/KCSM, Canadian Pacific, Florida East Coast, Watco Companies, Genesee & Wyoming, Amtrak, VIA Rail Canada, Sun Rail (Florida), Rail Runner (New Mexico), Caltrans, and many others. As of last month, Wi-Tronix had an installed base of 7,718 monitored assets. The company’s goal is to reach 20,000 by 2020. A recent addition is an expanded Integration Lab that allows Wi-Tronix engineers to improve quality, and speed development and deployment of new products. The HALT (Highly Accelerated Life Testing) process (currently outsourced) creates environments from -50°C to +80°C, to quickly expose equipment to temperature and vibration stresses that simulate

the entire service life of a device. Among the company’s newer technologies are Wi-Nostics, a predictive diagnostics product that requires no additional onboard equipment or sensors. The Mobile Phone Detection System, installed within the Wi-PU and coordinated with DVR and inward facing locomotive cameras, detects cell phone use in a locomotive cab. Yet another new technology is Attention Assist, which features onboard audio alerts as well as a visual display, and provides the locomotive engineer with interactive networked data communications on current location, speed, speed limit, approaching speed limits and locations, distance to approaching signals, automated audio alerts, and other timely information. The system is designed to minimize the risks associated with operator error and ensure that he or she is aware of approaching signals, a change in speed limit because of track conditions, and/

The Wi-PU (Wireless Processing Unit) is the heart of all Wi-Tronix technologies.

or other environmental changes that affect safe train operation. Attention Assist features include a graphical speedometer with current and approaching speed limits; a graphical track diagram of the route ahead displaying speed limit, mile/kilometer posts and signals, and the distance to go; in-cab audio alerts; and locomotive engineer interaction. Physical characteristics included in the track diagram

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ASSET TRACKING

show signals, switches, sightings, whistle posts, wayside detectors, mile/ kilometer posts, stations, yards, and quiet zones. “This visual aid helps the locomotive engineer manage the amount of information he or she is processing to maximize safe train operations,” the company says. While Attention Assist does not provide enforcement, as PTC does, it can be integrated with PTC. Wi-Tronix’s newest technology is its Mobile Phone Detection System, which is integrated into the Wi-PU to detect devices in the locomotive cab that transmit or receive over mobile phone frequency bands. This technology employs algorithms to differentiate a signal originating from within the cab of a locomotive from the background radio frequency signals coming from other sources. Upon detection, customizable rules are applied to determine if a safety violation has

occurred. If a violation has occurred, the Wi-PU generates a log and sends a notification to specified individuals or distribution lists. The benefits of this technology are, according to the company, “decreased incidents by a locomotive engineer caused by distracted operation, customizable real-time alerting on possible violations of mobile phone policies, risk reduction to the public and to railroad personnel, and historical tracking for compliance.” The Mobile Phone Detection System offers North American detection frequencies for PCS (1850 to 1910 MHz), CDMA (824 to 849 MHz), GSM (896 to 901 MHz), and LTE (700, 750, 800, 850, 1900 MHz). Future hardware releases will support 2100 MHz (AWS) and 2600 MHz. The system’s dynamic range is 60 dB; its sensitivity is -80 dBm. Mobile phone usage monitoring includes duration, a visual map, and a geo-fence zone. An

optional feature is automatic LDVR (Locomotive Digital Video Recorder), which triggers inward-facing crew cameras that produce still images and video. The system can detect mobile phones that are powered and transmitting, receiving an inbound call, placing an outbound call, and being used as a mobile phone-based Wi-Fi hotspot or for data transmission (e-mails, browsing the Internet, etc.). Inbound/outbound phone usage can be recorded while the locomotive is moving. A business-tobusiness integration function can identify crew members who may be violating cell phone policies. Wi-Tronix technology is currently capable of generating 216 unique alerts; new alerts are constantly under development. There are currently 98 alerts for transportation functions, 68 for mechanical, 28 for fuel efficiency, 17 for claims and risk management, three for dispatching, and two for engineering. RA

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Overhead Contact Systems Traction Power Systems Signaling and Train Control Communications and Control Centers

October 2014 RAILWAY AGE 39

CAP SCREW CLAMPING CHALLENGE

By WILLIAM C. VANTUONO, Editor-in-Chief

Sometimes, a new railroad product that’s a bit different from “business as usual” will encounter resistance. Here’s how one supplier stayed the course and earned acceptance.

oller bearing failures are the third-largest cause of derailments on U.S. railways, following only broken rails and track irregularities. According to a 2012 University of Illinois study, bearing failures caused 257 U.S. derailments between 2001 and 2010, with more than 1,700 cars coming off the rails. “This leads to millions of dollars in Loss & Damage claims and cleanup and track repair costs, plus the cost of repairing and replacing wheelsets and other running gear—not to mention the injuries or loss of life that sometimes result from a derailment,” according to Stage 8 Locking Fasteners Inc. Director and Executive Vice President Robert J. Ahern. Such derailments frequently happen because roller bearing end-cap screws, which maintain proper compression in the bearing, vibrate loose after tens of thousands of miles of service. Stage 8 Locking Fasteners, a major supplier of fastening systems to the aerospace (NASA), automotive/motorsports, and heavy equipment industries as well as the U.S. military, offers what it believes is a 100% effective solution to this

40 RAILWAY AGE October 2014

problem: the Cap Screw Locking System, which is designed to prevent freight car roller bearing end-cap screws from vibrating loose. “Lab and field tests have proven that our system is 100% effective in preventing roller bearing end-cap screws from coming loose, helping to prevent derailments caused by these types of failures,” says Ahern. “Our technology more than pays for itself for a simple economic reason: It’s far less expensive to install our Cap Screw Locking System on each wheelset of a railcar than to pay for the cost of wheelset replacement after the screws vibrate loose,” says Ahern. “In 2010, the railroad industry spent $223 million to repair and replace wheelsets and roller bearings that experienced failures caused by end-cap screw loosening. Our analysis indicates that if our product were installed on every new freight car in the U.S. over a sevenyear rollout period, the rail industry would save nearly $1.1 billion from bearing failures that won’t occur.” Stage 8 has obtained conditional approval from the

CAP SCREW CLAMPING

Association of American Railroads for the Cap Screw Locking System. Approval followed “a lengthy and frequently problematic evaluation” by the AAR Wheels, Axles, Bearings, & Lubrication (WABL) Committee, according to Ahern. “Our technology offers the twin benefits of enhanced railway safety and cost-reduction. The rail industry has been well aware of the problem of end-cap screws vibrating loose. The best locking system the industry has been able to devise still allows a failure rate of 23%, meaning nearly one out of every four wheel repairs is caused by loosening screws and loss of clamp. This is unacceptable.” Typically, says Ahern, “the roller bearings themselves were blamed. Conventional wisdom said that the material inside the bearings was breaking down, causing end-cap screws to lose their clamp and vibrate loose. This type of thinking did not address what we know is the true root cause of many bearing-related wheelset failures—loose end-cap screws. That’s why we devised a better system in 2009.” All new products marketed to the nation’s freight railroads must receive approval from the AAR and its specialized technical committees. “We wound up having to overcome a very high technical hurdle,” Vibrations can loosen roller bearing Ahern notes. “This was lengthy field test of our end-cap screws, with failure sometimes resulting in derailments. Cap Screw Locking

System. We’re pleased to report that, during 150,000 miles of revenue service testing, our locking system experienced no failures—not one end-cap screw loosened. The test was a complete success.” While Stage 8 is pleased that the AAR has granted conditional approval, it believes the approval process was far too lengthy. Such experiences in the long run “could discourage other innovative new parts suppliers from introducing new products that could improve safety,” says Ahern. “As such, legislative help may be needed.” “The U.S. Congress should consider adopting legislation that would enable the Federal Railroad Administration to more-effectively vet new or improved technology—even if it comes from suppliers who are new to the industry and, like us, encounter some resistance—that would prevent bearing failures, decouplings, and other accidents,” says Ahern. “This would enable railroads to adopt any technology that meets performance standards and improves system safety. Not only would persistent problems that have long-dogged the railroad industry be significantly reduced or even eliminated, safety would improve, the cost of derailment-related repairs and cleanup following a derailment would be reduced, and the railroad industry would benefit from its trains operating more efficiently. “This is what I would call common-sense legislation.” RA

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People

Meetings

HIGH PROFILE Jerome Wallut has been appointed President of Alstom Transportation Inc. and Senior VicePresident of Alstom’s North American rail transportation business. He will lead strategy, business development, customer relations, sales and project execution in the region. He will be in charge of more than 1,500 employees throughout the continent. Previously, Wallut was Managing Director of Alstom Transport France from 2010 to 2014, where he managed high speed rail, tramway, metro, signaling, and Wallut services contracts and led the “Next Generation” high speed Alstom trains project in collaboration with the French government. He joined Alstom Transport in 2000 as Director of Project Management Methods. “Alstom’s businesses in the U.S. and Canada including the century old Hornell, N.Y., manufacturing plant have continuously served the U.S. and Canadian rail industry for more than 100 years and we look forward to pursuing collaborating with our customers to provide them the next generation of rail transportation solutions tailored to their needs,” Wallut said.

October 12-14 ASLRRA Southern Region Meeting Naples, Fla. Tel.: 202-628-4500; Email: jbourque@aslrra.org; Website: www.aslrra.org

October 12-15 APTA Expo 2014 George R. Brown Convenstion Center, Houston, Tex. Website: www.aptaexpo.com

October 14-16 North American Freight Rail Planning Conference J.W. Marriott Grande Lakes Resort, Orlando, Fla. Wendy Emerman, Email: Wendy. Emerman@OliverWyman.com; Website: http://bit.ly/1q2Klwu

KANSAS CITY SOUTHERN— Shawn K. Vecellio promoted to Assistant Vice President Production and Standards for the engineering department. L.E. “Eddie” Jameson promoted to Assistant Vice President Safety and Standardization.

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Thales Group appointed Pierre Schaeffer Senior Vice President, Chief Marketing Officer.

October 28-29 Railway Age Passenger

NEW JERSEY TRANSIT—Neil S. Yellin named Deputy Executive Director. Robert M. Lavell named Vice President and General Manager, NJ Transit Rail Operations.

UNITRAC Railroad Materials, Inc. named Scott Arnold Vice President of Operations, based in the company’s Knoxville, Tenn., headquarters.

Trains on Freight Railroads Washington, D.C. Michelle Zolkos, Email: mzolkos@ sbpub.com; Website: www.railwayage.com.

UNION PACIFIC— Kenneth Hunt named Vice President of Transportation succeeding Randy Blackburn, who will retire. Shane Keller named Vice President of Network Operations and Harriman Dispatching Center. Richard Castagna named Regional Vice President of Transportation for the Western Region. Rodney Doerr named assistant Vice President of Safety. Roger Lambeth named General Superintendent of Transportation Services for the Los Angeles Service Unit. Jamal Chappell named Superintendent of Transportation Services for the Livonia Service Unit. Phillip Danner named Assistant Vice President of Engineering-Track programs. Neal Hathaway named Assistant Vice President of Engineering-Signal. Grant Janke has been named Assistant Vice President of Network and Capital Planning. 42

RAILWAY AGE

October 2014

CTLGroup named Hamlin Jennings, Ph.D, an affiliated consultant.

100 YEARS AGO in

(OCTOBER 1914) WOOD PRESERVING INDUSTRY MAY SUFFER FROM WAR The present European situation has had a very serious effect upon the wood preservation industry in this country . . . and a very serious shortage is imminent. It would seem possible for the United States to be wholly independent of Europe for its wood preservatives, and not be necessary to shut down a single treating plant, or to reduce the amount of timber now being treated because of the threatened creosote shortage. Many preservatives have been tested by the Forest Products Laboratory, and the results of these experiments will be published as a bulletin of the Department of Agriculture.

October 29-30 SmartRail USA Charlotte Convention Center, Charlotte, N.C. Stephen Scott, Tel.: +44 (0)20 7045 0916; Email: Stephen. scott@globaltransportforum.com; Website: www.SmartRailExpoUSA.com

November 4-6 2014 CBTC World Congress Park Plaza Victoria London, England Tel.: +44 (0) 207 045 0900; Website: www. CBTCWorldCongress.com

November 9-11 ASLRRA Central Pacific Region Worthington Renaissance Hotel, Fort Worth, Tex. Email: jbourque@aslrra.org; Website: www.aslrra.org

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Holland Grate Lock Track for vehicle restraint Holland’s Grate Lock Track (GLT) is a new key component of its vehicle restraint product offerings. This addition enables Holland to offer a Complete Vehicle Restraint System that includes the GLT, VRS Grate Chock and Door Edge Protection (DEP). The construction and galvanizing of the GLT ensures excellent durability in the demanding autorack environment.The VRS Grate Chock works seamlessly with the GLT, eliminating jumped chocks, while the DEP protects vehicle exteriors from damage caused by contact with the autorack carbody. This complete system offers customers a one-stop-shop for autorack components. For more information, visit www.hollandco.com.

• Testing and Troubleshooting 26-Type Locomotive Air Brake Systems • Locomotive Periodic Inspection and FRA Rules Compliance • Locomotive Electrical Maintenance and Troubleshooting • Locomotive Air Brake Maintenance and Troubleshooting • Distributed Power Maintenance and Troubleshooting • Distributed Power Operations, Training, and Operating Rules

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October 2014 RAILWAY AGE 43

Ad Index Company

Phone #

Fax

URL/Email address

Alcatel Lucent

+02079611152

Alstom Transport SA

+0033157069491

+0033141668843

elaine.west@transport.alstom.com

AREMA

301-459-3200

301-459-8077

marketing@arema.org

Bombardier Transportation

215-441-1864

215-639-3724

Maryanne.roberts@us.transport.bombardier.com 21

Brookville Equipment Corp

814-849-2000 ext.226

814-849-2010

e_mckillip@brookvilleequipment.com

CAF Power & Automation

+34 9433 13 363

Antonia@suscreativos.com

CIT

212-461-5713

212-461-5694

abby.cohn@cit.com

David J Joseph Company The

513-419-6200

513-419-6221

txs@djj.com

Ellwood Crankshaft & Machine

724-347-0250

724-347-0254

ecgsales@elwd.com

First Union Leasing Corp

847-384-5392

847-318-7588

richard.seymour@wachovia.com

FreightCar America

312-928-0850

312-928-0890

tbaun@freightcar.net

GE Transportation

814-875-2099

513-786-2540

chris.banocy@ge.com

Georgetown Rail Equipment Co.

512-869-1542 ext. 228

512-863-0405

karen@georgetownrail.com

Halfen USA Inc.

800-423-9140

877-874-7923

gprendergast@hallfenuse.com

Herzog Railroad Services, Inc.

816-233-9002

816-233-7757

tfrancis@hrsi.com

Infinity Rail

678-904-6300

678-904-6310

info@infinityrail.com

Kelso Technologies

630-495-1151

630-396-9069

schwartz@kelsotech.com

Knoxville Locomotive Works

865-525-9400

865-546-3717

goklw.com/contactus

LTK Engineering Services

215-641-8826

215-542-7676

tfurmaniak@ltk.com

MAC Products

973-344-0700

973-344-5891

edward.gollob@macproducts.net

Mass Electric Construction Co.

972-505-4700

972-505-4701

www.masselec.com

MTU

248 560 8484

248 560 8485

bryan.mangum@tognum.com

New York Air Brake Corp.

315-786-5431

315-786-5676

janice.pheile@nyab.com

NRE

618-241-9270

618-242-8519

sales@nre.com

Phoenix Contact

800-888-7388

717-948-3475

info@phoenixcon.com

Progress Rail Services

256-505-6402

256-505-6051

info@progressrail.com

Progress Rail Services PRL

256-505-6402

256-505-6051

info@progressrail.com

DBC2

Rail Solutions

773-779-2400

773-779-0231

railsol@aol.com

Railquip Inc

770-458-4157

770-458-5365

sales@railquip.com

Rails Co.

973-763-4320

973-763-2585

rails@railsco.com

Railway Educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

S & C Distribution Co.

708-396-1755

708-396-1754

info@sandcco.com

Siemens-Rail Automation

502-244-7400

502-253-3760

bob.coffman@invensys.com

SMBC Rail Services LLC

312-559-4800

888-4RAILCAR

sales@smbcrail.com

DB9

Soft Rail

888-872-4612

sales@signalcc.com

Transcore

214-461-6443

800-923-4824

www.transcore.com

TrinityRail

800-631-4420

214-589-8623

info@trinityrail.com

Wi-Tronix LLC

630-679-9927 x307

630-679-9954

fcozzi@wi-tronix.com

RAILWAY AGE

October 2014

caterina.reed@zenithoptimedia.com

Page # C4 5 32

DB7 DBC4 30 DB8

DB5 39 7

DB6

25, 28, 43

EQUIPMENT SALE/LEASING

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EQUIPMENT SALE/LEASING Available for Lease 3600 cu ft Open Top Hopper Cars 100 ton Automated/Manual Ballast Cars 4480 cu ft Aluminum Rotary Open Top Gons

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EQUIPMENT SALE/LEASING

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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. 10:03 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.

EMPLOYMENT Locomotive Electrician - Locomotive Repair facility in Kansas City, Missouri, is looking for an experienced electrician with repairing and troubleshooting diesel locomotive high and low voltage wiring, must be able to read electrical schmatics, relocation expenses paid, supervisor position available. Call 816-483-5329.

Director, North American Sales Loram Maintenance of Way, Inc.

See the full job posting and apply today at http://jobs.loram.com

NATIONAL STEEL CAR is a progressive industry leader dedicated to the manufacturing of railway rolling stock. Our dedication to customer satisfaction, the competitive spirit of our people and our commitment to excellence in everything we do have earned us our distinguished reputation: Currently seeking a qualified individual for the following position:

REGIONAL MANAGER OF MARKETING AND SALES SOUTHWESTERN USA Reporting to the Regional Vice President of Marketing and Sales the successful candidate will be responsible for: • The presentation and sale of freight cars, freight car products/parts or freight car services to current and potential customers. • To investigate, research and identify new customer prospects through industry contacts, online sources or published media. • Follow up on new leads and referrals resulting from research or field activities • Prepare and/or review presentations, proposals and sales contracts. The ideal candidate will have the following qualifications: • Successfully attained a Bachelor’s or College Degree with a focus on Marketing or Commerce with a minimum of 5 years field experience. • Extremely self motivated, influential, a gifted relationship builder with outstanding communication skills, including, effective written and oral presentation skills. • PC literate, driven to win, flexible, with the ability to think on your feet. • Knowledge of railcar type, parts and features an asset Please respond in confidence to: Human Resources P.O. Box 2450 Hamilton, ON L8N 3J4 Fax: (905) 544-1633 Email: brucknerh@steelcar.com

AN EQUAL OPPORTUNITY CANADIAN EMPLOYER www.steelcar.com

October 2014 RAILWAY AGE 47

Perspective: Short Line & Regional KEITH HARTWELL

For consideration: Ads for tax credit

ince first enacted in 2004, the Short Line Rehabilitation Tax Credit (45G) has always been one of the last bills approved before Congress left town. This year will be no different. Despite overwhelming bipartisan support, the tax credit will be held captive in a much larger tax bill, the so-called “extenders package,” which will not be voted on until Congress returns in a lame duck session after the November election. Between now and Election Day, candidates will have spent hundreds of millions of dollars on 30-second television spots telling the voters how they will create jobs, grow the economy, preserve domestic manufacturing, and rebuild infrastructure. These messages will be long on goals but short on specifics. But supporting the short line rehabilitation tax credit allows a Congressional candidate to speak very specifically about those goals. Of the 251 House and 51 Senate co-sponsors of the tax credit extension legislation (H.R. 721 and S. 411), the majority are running for re-election. I know candidates and staff are incredibly busy and harried at this point in the campaign, so I thought it would be helpful to prepare four 30-second TV spots that speak specifically to the economic issues that are on the minds of the voters. I make here some modest suggestions as to the stagecraft of these spots. No doubt some will note this may not be my forte. But as far as the message goes, the rehabilitation tax credit is so sensible that the text of the spots practically writes itself. SPOT 1: Creating jobs (Camera pans across railroad track workers installing new welded rail.) NARRATOR: Rehabilitating railroad track is a labor intensive effort and short line railroads must hire outside contractors to do this work. The short line rehabilitation tax credit generates over 6.8 million track worker-hours each year.

RAILWAY AGE

October 2014

Added to these are the thousands of jobs in the companies that manufacture track materials and build the heavy equipment needed to install those materials. Candidate Sitting on Spike Machine: I know that real jobs are created when companies reinvest their earnings in their plant and equipment and maximizing investment is what the tax credit is all about. It’s why I’m a proud sponsor of this legislation. (Camera shows track workers singing “I’ve Been Working on the Railroad.”)

Supporting the 45G tax credit gives candidates an election edge. SPOT 2: Growing the economy (Video footage of a short line train loading grain from a local elevator.) GRAIN ELEVATOR MANAGER: Our short line is our lifeline to the national grain market. It helps our business grow and prosper. We are fortunate to have a Congressman who gets that. CANDIDATE: This grain elevator serves over 500 family farmers in a 50-mile radius and the short line keeps those farmers connected to the national transportation system. It dramatically expands their market reach so they can sell more grain and grow their own businesses. The short line rehabilitation tax credit allows the railroad to make the investment necessary to provide efficient transportation to those businesses. It’s good public policy and I’ll continue my fight to keep it going. (Picture of Tony the Tiger driving the train into Kellogg’s Battle Creek facility.)

SPOT 3: Strengthening U.S. business (Cartoon picture of railroad track ending at the ocean’s edge.) NARRATOR: Washington politicians loudly proclaim the need to keep business investment in the United States. Talk is cheap, but our Congressman is actually doing something about it. CANDIDATE: I didn’t go to Washington to complain; I went to get things done and that’s why I am working hard to get the short line tax credit passed. It allows these small railroads to buy more track materials. Railroads are businesses that can never be moved overseas and virtually all the ties and rail they buy are manufactured in America. (Fade out with instrumental version of “America the Beautiful.”) SPOT 4: Rebuilding infrastructure (Picture of track before and after rehabilitation.) CANDIDATE: I am working hard to extend a short line tax credit that lets these small businesses keep more of what they earn to increase investment in their infrastructure. Since the credit was enacted in 2004 the real world results have been dramatic. SPOKESMAN for Railway Tie Association: Our annual data show the short line tax credit has resulted in short line purchases of between 500,000 and 1.2 million ties annually over and above normal orders. Considering the average tie life is 40 years, the tax credit is helping improve infrastructure for decades to come. (Picture of Paul Bunyan dragging logs into the saw mill.) OK, maybe I shouldn’t quit my day job for a creative media career. But the short line tax credit accomplishes the very goals that Congressmen have spent the entire year talking about. When the election is over, Congress will have one last chance to act on a bill that does so much to reach the very goals on which they all seem to agree.

Safer Operations – For Everyone. Federal Railroad Administration Emergency Order No. 26 – Emergency order to restrict on-duty use of cellular telephones and other distracting electronic and electrical devices. Preventable incidents are exactly that—preventable. Incidents resulting from distracted driving happen too often and can be avoided. Reducing distracted driving makes your operations safer for crews, passengers, and the public. Wi-Tronix Mobile Phone Detection System improves safety by detecting in cab mobile phone usage and measures compliance to Emergency Order 26.

Benefits • • • •

Monitor your compliance with mobile phone detection Decrease incidents caused by distracted operation Improve safety for your railroad personnel and the public Real-time alerting on possible mobile device usage

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Is your train on the right track? For a Rail Operator, right track means greener, safer and smarter. This requires a converged IP and ultra-broadband communication network alongside your rail infrastructure. It’s the path to reliable voice and data for train control, multimedia collaboration, video protection everywhere, passenger connectivity and much more. Alcatel-Lucent helps you migrate, renew or build your communication network to stay on track for operational excellence. Learn more, visit www.alcatel-lucent.com/railways and meet us at APTA EXPO 2014 in Hall B – booth 2603.