October 2016 Railway Age by Railway Age

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October 2016 | www.railwayage.com

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On the Cover BNSF stack train on Montana Rail Link at Elliston, Mont. Photo: Bruce Kelly

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 217, No. 9. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHTÂŠ 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Intâ&#x20AC;&#x2122;l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, PO Box 3135, Northbrook, IL 60062-2620, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital). October 2016 Railway Age 1

From the Editor William C. Vantuono

Editorial and Executive Offices Simmons-Boardman Publishing Corp. 55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com

NJT, Hoboken, PTC and an MTEA

he scene, unfortunately, has become all-to-familiar in the Northeast: A passenger train wreck with casualties caused by an overspeed condition, failure to stop, etc. Speculation as to what may have caused the wreck—and the inevitable question posed by the media: “Would PTC have prevented this from happening?” PTC: The largely misunderstood technology that’s widely perceived as a magic bullet able to prevent all accidents, on all railroads, anywhere, at anytime. Well, that’s what some know-it-all politicians would like the public to believe. This time around, the railroad is New Jersey Transit. Here’s what happened: At approximately 8:45 a.m. on Sept. 29, NJ Transit train no.1614, a Pascack Valley Line departure from Spring Valley, N.Y., operating cab-car-first to Hoboken Terminal, crashed through the end-of-platform bumping block on Track 5 at an estimated 20 mph and ran into the train concourse. The single-level Comet V cab car came to a halt between the terminal’s indoor waiting area and the end of the platform. A metal and glass train shed collapsed. One person died and 108 were injured, some of them critically. Most of the injuries occurred in the lead car or to people struck by collapsing debris inside the station. Many people were trapped on the train or in the debris. The single fatality was a woman on the platform. The cab car remained intact. The wreck’s exact cause, which is under investigation by the Federal Railroad Administration and the National Transportation Safety Board, will be unknown for some time—which leads back to the inevitable question, “Would PTC have prevented this from happening?” I’ll leave it to David Schanoes, a retired high-level railroad operating officer (Chicago & North Western, Conrail, Metro-North), consultant, and frequent contributor to Railway Age, to intelligently answer this question: “In theory, yes. In reality, no. Why?

Railway Age

October 2016

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Because FRA allows railroads to apply for a Main Line Track Exclusion Addendum (MTEA). Meaning that in its PTC Implementation Plan (PTCIP), a railroad can designate a passenger terminal exception from PTC requirements for trackage used exclusively as yard or terminal tracks by or in support of regularly scheduled intercity or commuter passenger service, where the application for the MTEA relief describes in detail the physical boundaries of the trackage in question and its use and characteristics (including track and signal charts); the maximum authorized speed (MAS) for all train movements is not greater than 20 mph; the 20 mph MAS is enforced by PTC equipment active and installed on the trains within the yard or terminal, and such onboard equipment ‘reads’ non-PTC territory as a speed restriction not exceeding 20 mph; interlocking rules are in effect prohibiting reverse movements without signal indication or verbal permission; and no freight operations are permitted, or if permitted, no passengers will be aboard passenger trains within the defined limits.” FRA approved NJT’s PTCIP, which included application of an MTEA for Hoboken Terminal. PTC would have provided a zero-speed target for the end of the platform, and would have automatically made a penalty brake application if it calculated and determined that the train’s 20 mph-to-0 mph braking curve was insufficient to stop the train just short of the end-of-platform bumping block. ATC, in place throughout the NJT system, does not provide zerospeed targets. Nor does it calculate and enforce braking curves. So what could this mean? MTEAs being re-evaluated and revoked? PTC requirements, complexity and cost rising even further? Or is there a simpler solution?

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Industry Indicators SHORT LINE AND REGIONAL TRAFFIC INDEX

TRAFFIC ORIGINATED

CARLOADS FIVE WEEKS ENDING SEPTEMBER 3, 2016 MAJOR U.S. RAILROADS by Commodity Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron and Steel Scrap Motor Vehicles and Parts Crushed Stone, Sand, and Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads Total U.S. CarLoadS

AUG ’16 120,478 5,048 44,669 31,121 153,807 52,771 449,858 5,974 16,396 29,001 28,283 21,579 42,896 17,244 92,129 119,845 24,264 39,863 20,649 32,114 1,347,989

AUG ’15 96,621 4,796 47,030 30,484 152,108 70,421 536,496 7,838 17,161 31,270 29,374 19,922 47,582 17,512 90,440 128,758 23,430 43,010 16,467 32,610 1,443,330

% CHANGE 24.7% 5.3% -5.0% 2.1% 1.1% -25.1% -16.1% -23.8% -4.5% -7.3% -3.7% 8.3% -9.8% -1.5% 1.9% -6.9% 3.6% -7.3% 25.4% -1.5% -6.6%

357,639

371,887

-3.8%

1,705,628

1,815,217

-6.0%

CARLOADS

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

COMBINED U.S./CANADA RR

INTERMODAL FIVE WEEKS ENDING SEPTEMBER 3, 2016 MAJOR U.S. RAILROADS by Commodity TRAILERS CONTAINERS TOTAL UNITS

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

AUG ’15 143,892 1,250,271 1,394,163

% CHANGE -24.0% -2.6% -4.8%

5,000 307,812 312,812

7,575 308,897 316,472

-34.0% -0.4% -1.2%

Transportation (train and engine) 59,629 (-13.10%)

114,329 1,525,757 1,584,549

151,467 1,559,168 1,710,635

-24.5% -2.1 -4.1%

Total employees: 152,753 % change from AUGUST 2015: -9.61%

CANADIAN RAILROADS

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)

Average Weekly U.S. Rail Carloads: All Commodities 350,000 340,000 330,000 320,000 310,000 300,000 290,000 280,000 270,000 260,000 250,000 240,000 230,000 220,000

2014

2015

2016

Jan Feb Mar Apr May Jun

Railway Age

October 2016

Maintenance of Equipment and Stores 28,292 (-8.75%)

Professional and Administrative 13,658 (-6.19%)

Maintenanceof-Way and Structures 35,986 (-6.04%)

Source: Surface Transportation Board

2009

Jul Aug Sep Oct Nov Dec

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

Executives, Officials, and Staff Assistants 9,153 (-6.68%)

Transportation (other than train & engine) 6,035 (-10.06%)

2006 (peak year)

% CHANGE 6.1% 8.6% -18.7% -0.7% 13.1% 1.3% 10.1% 10.1% 2.2% 3.4% 5.0% 18.3% -3.9% 9.2% 9.9% -5.1% 1.0%

AUGUST 2016 - 365,325

AUG ’16 109,329 1,217,945 1,327,274

TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED AUGUST ’15 45,337 22,364 31,425 11,275 21,584 6,574 8,944 3,045 16,359 8,941 1,706 1,822 18,732 13,120 46,953 10,203 87,524

TOTAL CARLOADS, AUGUST 2016 vs. 2015

CANADIAN RAILROADS ALL Commodities

ORIGINATED AUGUST ’16 48,097 24,282 25,560 11,196 24,405 6,658 9,849 3,354 16,724 9,246 1,792 2,156 17,995 14,331 51,615 9,678 88,387

BY Commodity

class I employment dropS ON YEAR, BUT STEADY ON MONTH Figures released by the STB show Class I total railroad employment dropped 9.61% in August 2016, measured against August 2015. But total railroad employment stayed nearly even compared to July 2016, rising .02%. On the yearly comparison, Transportation (train and engine) dropped the most at 13.10%; followed by Transportation (other than train & engine), which dropped 10.06%, followed by Maintenance of Equipment and Stores, which dropped 8.75%.

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Industry Outlook California pushes Sustainable Freight Action Plan ahead

California caps and trades $374 million As California’s Cap and Trade program of greenhouse gas emissions advances, rail projects are receiving development grants: On Aug. 16, the California State Transportation Agency (CalSTA) announced 14 recipients for the 2016 Transit and Intercity Capital Program (TIRCP) grants. Of the $390 million available in competitive grants through the state’s Cap and Trade auction proceeds, nearly $374 million goes to rail projects. 41 applications for funding from around the state were submitted for consideration this year. The 14 projects selected, valued at more than $3.8

billion, will reduce more than 4.1 million tons of CO2 statewide, and 13 of the 14 recipient projects directly benefit disadvantaged communities. Looking ahead, through Senate Bill 9 (Beall, 2015) CalSTA will be adopting a five-year program of projects by July 1, 2018. The 5-year program calls for larger, more transformative projects to be funded. With that, the state anticipates being a long-term funding partner to see numerous regional/commuter rail, intercity rail, rapid transit, light rail and streetcar transformative projects come to fruition.

Evolving from an Executive Order issued last year by Governor Edmund G. Brown Jr., and a draft version issued in May 2016, California has now released its Sustainable Freight Action Plan, a blueprint for moving the state’s multi-billion-dollar freight transport system into a more environmentally cleaner direction. The revised document is similar to the draft version issued in May 2016, but reflects new input provided by industry, labor, regional and local government, and community and environmental group stakeholders, who submitted more than 85 comments on the draft plan. Developed in response to Governor Brown’s Executive Order B-32-15, which calls for a single integrated action plan for California, the Action Plan was prepared by the California State Transportation Agency, California Environmental Protection Agency, California Natural Resources Agency, California Air Resources Board, California Department of Transportation, California Energy Commission and the Governor’s Office of Business and Economic Development, with stakeholder input.

FTA guiding Buy America requirements from 60% to 70% The Federal Transit Administration (FTA) on Sept. 1, 2016 issued its final Buy America policy guidance advising transit agencies and transit vehicle manufacturers how to implement a phased increase in domestic content requirements for transit rolling stock procurements from 60% to more than 70% by the year 2020. The phased increase is required by the Fixing America’s Surface Transportation (FAST) Act and is the first increase since 1991. Under the FTA final policy guidance, the Buy America domestic content requirements for transit rolling stock procurements for railcars and buses 6

Railway Age

October 2016

will be based on the scheduled delivery date of the first production vehicle. The domestic content minimum for fiscal years 2016 and 2017 is more than 60%; for fiscal years 2018 and 2019, it is more than 65%; and for fiscal year 2020 and beyond, it is more than 70%. FTA is also providing a limited public interest waiver for solicitations and contracts that were under way when the FAST Act was enacted in 2015. FTA’s Buy America requirements apply to third-party procurements by FTA grant recipients. FTA generally defines rolling stock to include transit vehicles such as buses, vans, cars, railcars, locomotives, trolley cars and buses,

and ferryboats. Rolling stock also includes train control, communication, traction power equipment, and rolling stock prototypes. “Buy America provisions ensure that federally funded transportation projects are built with American-made products,” said U.S. Transportation Secretary Anthony Foxx. “As a result, DOT investments support an entire supply chain of American companies.” “The revised FTA Buy America policy addresses public transportation industry concerns and maintains the core goal of the program to preserve and create good-paying American jobs,” said FTA Acting Administrator Carolyn Flowers.

Market

Siemens unveils new SFMTA LRVs Siemens last month hosted San Francisco Mayor Ed Lee and the San Francisco Municipal Transportation Agency (SFMTA) for a behind-the-scenes look at the first of 215 California-built light rail vehicles currently in production at the Siemens rail manufacturing hub in Sacramento, Calif. The first SFMTA advanced technology S200 high-floor LRV is expected to arrive in San Francisco in December and will enter into final testing and commissioning prior to revenue service, scheduled for 2018.

North America The first of 300 Bombardier R179 cars ordered by the New York Metropolitan Transportation Authority for the MTA New York City Transit B Division was delivered last month to 207th Street Yard in Upper Manhattan. NRE, based in Mount Vernon, Ill., has been awarded an order to design and manufacture 45 3,600-gallon FRA 229.217-compliant crashworthy fuel tanks (AAR S-5506) and electrical control compartments. Deliveries commenced in October 2016. Canadian mining company KWG Resources signed a framework strategic cooperation agreement with China Railway First Survey and Design Institute Group (FSDI) to carry out a bankable feasibility study for a multiuser railway linking mines in northern Ontario’s Ring of Fire region to a junction with CN’s Winnipeg-Nakina-Sudbury main line at Exton.

Alstom won the system maintenance contract for the entire O-Train Confederation Line line for Rideau Transit Maintenance General Partnership (RTM), which is comprised of SNC Lavalin O&M, ACS and EllisDon. Brightline’s first Siemens Charger diesel-electric locomotive has successfully completed initial testing and operated for the first time, powered by its Cummins QSK95 diesel engine, on the quartermile test track at the Siemens manufacturing facility in Sacramento, Calif. A consortium of Ineco, Spain, its Mexican subsidiary Inecomex, Spain’s infrastructure manager Adif, and Cal y Mayor y Asociados, Mexico, has been awarded a contract to supervise the construction of an extension to Line 12 of the Mexico City metro. VHB has been named the local lead signal design consultant to work as part of the Ansaldo STS team on a Massachusetts Bay Transportation

Authority $338 million project to equip the Boston commuter rail network with Positive Train Control (PTC). Ansaldo STS is a Hitachi Group company. United Rail, Inc. announced that BBR Rail Automation has received a formal contract from Bombardier Transportation to supply the signaling and communications for the Edmonton Valley Line (Green Line) in Edmonton, Alberta.

Worldwide: The first of 42 driverless metro trains being supplied by Hitachi Rail Italy (HRI) for Lima metro Line 2 was loaded onto the MV Cerinthus at the port of Salerno on August 16 in readiness for its 29-day sea voyage to Peru. Amsterdam Municipal Transport (GVB) has chosen CAF as its preferred bidder for a contract to supply 63 lowfloor bi-directional light rail vehicles, with an option for another 60 vehicles. October 2016 Railway Age 7

Update Supply Briefs Cubic Transportation Systems (CTS) customer

STB issues ANPR on small rate disputes after shipper feedback

Chicago Transit Authority (CTA) received APTA’s 2016 Innovation Award for the Ventra Mobile App. “The product’s success is based on the collaborative effort of the CTA, suburban bus operator Pace and Metra,” CTS said. “The Ventra Mobile App provides one-stop convenience for transit riders, enabling them to plan, manage and pay for their journeys.”

received a U.S. Patent for a “two-step” borate pre-treatment dipping process and related equipment the company developed to increase the life of wood railroad crossties. Gross & Janes uses this two-step method in the production of its trademark Tuff-Tie™ borate pre-treated crossties at its facility in Camden, Ark. According to the Railway Tie Association, approximately 40% of the 23.5 million wood railroad ties made in North America last year were treated with borate. “Gross & Janes was an early proponent of using borate to enhance the life of crossties,” said Mike Pourney, President of Gross & Janes. “After years of monitoring borate in railroad crossties, we have succeeded in making the two-step application process more uniform and consistent. Receiving this patent validates decades of effort to incorporate borate as an additional component in treating a railroad tie.” The company says its two-step method is an environmentally friendly pre-treatment of “green” crossties prior to air drying. This helps protect the ties from insects, stack burn and decay. Following the air drying process, the ties are then treated with the traditional creosote or copper napthenate. 8

Railway Age

October 2016

he Surface Transportation Board has released an Advance Notice of Proposed Rulemaking (ANPR) that considers “a new, streamlined procedure to resolve small rate disputes between shippers of all commodities and Class I railroads.” “The rules are an outgrowth of the Board’s effort to make its rate case procedures more fair and accessible to grain shippers, and the concerns expressed by the agricultural community have been instrumental in informing the Board of the need for a new approach,” STB said. “But the Board also recognizes that for small rate disputes, regardless of commodity, the litigation costs required to bring a case under the Board’s existing rate reasonableness methodologies can quickly exceed the value of the case.” Under the procedures outlined in the ANPR, the Board would design a “comparison group” of similar rail shipments against which to judge the reasonableness of the rate being challenged. “Having the Board design the comparison group, rather than the parties, would streamline this procedure as compared to the Board’s existing Three-Benchmark methodology,” STB said. “And, rather than receiving rebuttal submissions and closing briefs—as in some of the rate case procedures available now—the ANPR envisions a final

evidentiary hearing before Board staff (either in person or via conference call).” The new procedure may also include further streamlining measures such as mandatory initial disclosures by the parties, elimination of discovery or limits on discovery, and limits on the length of evidentiary submissions (for example, a maximum of 1,000 words). “These measures also would reduce litigation expenses and improve the pace of the rate challenge,” STB noted. The Board is considering a preliminary screening “to ensure that the challenged traffic meets threshold criteria for review, which could allow for more streamlined market dominance and rate reasonableness presentations than in other rate case methodologies,” STB said. “Also, due to the abbreviated nature of the process, the Board would limit the amount of relief available.” “The new approach described in [this] decision is intended to create a costeffective pathway to resolve small rate disputes,” said Chairman Daniel R. Elliott. “It has been a key objective of my tenure as Chairman to re-invent the rate case process, and today’s decision is a significant part of that effort. I would like to thank the agricultural community for focusing attention on this important issue, and also recognize the contributions of STB staff.”

Bruce E. Kelly

Gross & Janes Co. has

Road & Rail Services marks 30 years

Road & Rail Services

Longevity is common in the railway supply business, even though many companies have been through the merger and acquisitions process. Louisville, Ky.-based Road & Rail Services marks 30 years in this industry in 2016. Railway Age Editor-in-Chief William C. Vantuono asked Vice President Sales and Marketing Brian Koontz to talk about the company’s business strategy and growth prospects. Railway Age: You have three principal lines of business: Plant & Terminal Operations, Train Services (Industrial Switching, Short Line Operations, Unit Train Handling) and Product Handling (Automotive, Intermodal and Bulk Commodities). Can you share some business trends that affect you? Road & Rail Services: We have been very fortunate with each of our core business units this past year. The automotive handling portion has experienced steady and solid growth. The automotive segment has set industry sales records for the past couple of years and is currently enjoying seven consecutive years of increase. We have also experienced steady growth with our switching and train handling business. This is a key strength for us. We are successful in improving a customer’s overall operation by identifying distinct areas that will improve their operating velocity. Through this specialized process, our customers greatly enjoy the savings we bring to their business. Every customer we speak with always has key tasks at the top of its business “to-do” list, regardless of the commodity. First is always safety, followed by improving network velocity and helping identify network cost savings. Our day always begins and ends with safety in mind—for our operations that is a must. A current trend across all product lines is for customers to integrate their service providers into their business. We find that our customers are interested in meeting with the local Road & Rail Services team to help them solve

their issues. We thrive on the challenge of identifying opportunities and providing solutions for our customers. RA: Are there any plans to purchase and/or lease new power? R&RS: Our fleet is based upon our customers’ specific needs and situation. We take a “customized and all-inclusive” service provider approach. We ensure that the equipment will be able to deliver the promise of service. Leasing locomotives allows us to better focus on the service we deliver. We closely work with our leasing partners. They understand our needs, and that enables us to find exceptional units with great flexibility. We are excited that we have a current steady customer base and are foreshadowing growth within our locomotive fleet. We always balance the cost of ownership between purchase and lease. As always, we want to capture the operating characteristics of our locomotives that provide the balance between optimal track performance and fuel economy. RA: How has your technology evolved? R&RS: Systems and technology have

been one of the fascinating growth areas of our business. Everyone is looking for the better mousetrap: How can I best track my operations? As we all know, you can’t manage what you can’t track.

Our goal for our customers is to give them tools that will allow us to track, manage and improve our daily performance. Really, for Road & Rail Services we believe that systems and technology are a core strength that we possess and a service that we offer customers, which in turn provides them savings in their daily operations. The desire for better tracking leads to better analytics for our customers. Wireless devices have become a key part of our core business. Our technology is programmed to drive yard and network velocity. This improvement in our systems has helped preserve the condition of the cargo for our shippers. We offer hardware solutions to ensure data flow, enhanced communication of processes with both the railroads and shippers. Our system provides data warehousing that allows an enhanced trending of information. Our business intelligence tools allow our customers to extrapolate their information. As we celebrate 30 years as a service provider for multiple industries, we follow a basic strategy: • Recruit, train and retain exceptional people. • Provide industry-leading processes for operations and service delivery. • Deliver a services strategy that has a relentless focus on safety. • Be an information-based decisionmaking business. October 2016 Railway Age 9

Update Massachusetts transit car manufacturing: Next stop, China

As Massachusetts officials celebrated the “topping off ” ceremony of a $95 million new railcar manufacturing plant in Springfield, Mass., last month, the factory’s owner—China’s CCRC—explained hiring plans:

Production workers will be hired in October, and sent to China for advance training by February. Once completed, the factory will manufacture 284 rapid transit cars for the Massachusetts Bay Transportation

Authority: 132 for the Red Line, and 152 for the Orange Line. In 2014, CRRC received a $566 million contract to manufacture 284 subway cars for the MBTA. The 204,000-square-foot factory will employ 150 workers in Springfield, Mass. The first cars are scheduled to be delivered in 2018. “Topping off ” is the term used by ironworkers to indicate that the final piece of steel is being hoisted into place on a building, bridge or other large structure, and in this case the factory has now reached its maximum height. Construction of the factory is running ahead of schedule, with other projects, including a 2,240-foot dynamic test track, and staging/ storage area to be built. The project is projected to be completed in the fall of 2017.

STB: Four Class I’s revenue-adequate in 2015 The Surface Transportation Board (STB) on last month announced its annual determination of revenue adequacy for U.S. Class I freight railroads for 2015. Of the “Big Seven” (five U.S. carriers and two U.S. subsidiaries of Canadian roads), four made the cut. Based on its determination of a 9.61%

cost of capital, the Board found that BNSF Railway Co., Grand Trunk Corp. (CN), Soo Line Corp. (CP), and Union Pacific Railroad Co. were revenueadequate for 2015. CSX, Kansas City Southern and Norfolk Southern did not make the list. A railroad is considered to be

revenue-adequate if it achieves a rate of return on net investment equal to at least the current cost of capital for the railroad industry, which for 2015 the Board determined to be 9.61%. Congress directed the Board to conduct such revenue adequacy determinations on an annual basis.

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Fort Worth launches Tex Rail construction Groundbreaking ceremonies were held in Fort Worth, North Richmond Hills, and Grapevine, Tex., recently to officially launch construction on the $996 million Tex Rail commuter rail project. The 27-mile line will connect Fort Worth city center with Grapevine and Dallas Fort Worth (DFW) International Airport Terminal B, serving 10 stations.

Commercial operations are due to begin in late 2018, and the line is projected to carry 8,000 passengers per day by the end of its first year of operation, increasing to nearly 14,000 passengers per day by 2035. Tex Rail services will be operated by a fleet of eight Stadler DMUs (diesel multiple-units).

Elliott to Congress: Revenue adequacy will have to wait In a Sept. 1, 2016 monthly progress report letter to the Senate Commerce Committee, House Transportation & Infrastructure Committee, Senate and House transportation appropriations committees and all relevant subcommittees, STB Chairman Dan Elliott said the Board’s pending rulemaking on railroad revenue adequacy will not see further action until June 2017. “With respect to EP 722, Revenue

Adequacy, the Board has modified its timing for the next milestone,” Elliott stated. “In light of the numerous rulemaking proposals the Board has issued and the stakeholder input required, we have targeted June 2017 for our next proposed action.” Friction at the Board between Democrat Elliott and fellow members Deb Miller, a Democrat, and Ann Begeman, a Republican, may be

contributing to the delay on a revenue adequacy rulemaking, as Railway Age Contributing Editor Frank Wilner noted in his September 2016 Watching Washington column, “STB dysfunction menaces revenue adequacy.” Elliott’s letter, which contained status reports on all STB actions specified under Public Law 114-110, the STB Reauthorization Act of 2015, can be downloaded from the STB website.

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Update “Fall Peak” changes for the rail industry, also

Surface Transportation Board Chairman Daniel R. Elliott III is discontinuing the practice of sending an annual letter to the railroad industry asking Class I and other railroads to comment on their end-of-year outlook for traffic volumes and operations. The Chairman’s decision “reflects changes that have occurred in the rail industry since mid-2000, and also the weekly reporting of service

performance data to the agency by Class I railroads,” STB said. The practice of sending an annual letter to the rail industry began in 2004. “The letters were motivated by severe capacity constraints and periodic service disruptions that plagued the rail industry during the past decade,” STB noted. “Thus, the Chairman sought written assurance from the industry as to its preparedness to handle the seasonal spike in agricultural, intermodal, and energyrelated traffic occurring each year. In recent years, however, railroad shipping patterns have changed. There is no longer a highly conspicuous peak season. And, in October 2014, the Board began collecting weekly service performance reports from the Class I railroads, providing a snapshot of the industry in near real-time. Thus, the need for the ‘Fall Peak letter’ has diminished.” “I appreciate the railroad industry’s

past responses to the Chairman’s annual end-of-year outlook letter,“ said Elliott. “Over the years, the responses have been very helpful to the agency in assessing the preparedness and resilience of the network. However, the industry has changed significantly over the past 12 years. With this in mind, it is appropriate to discontinue the practice, especially in light of service performance data that Class I railroads are providing on a weekly basis.” Chairman Elliott says that during his tenure, he “has sought to enhance the transparency of the agency and to facilitate a more open dialogue with STB stakeholders outside of formal proceedings.” In this regard, although Elliott has decided to discontinue the practice of requesting outlook letters, “he expects the railroad industry to be forthcoming to the agency in the event of unanticipated service disruptions,” STB said.

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Watching Washington Frank n. wilner

Wick’s winter of discontent

or newly minted Amtrak President Charles Wickliffe (Wick) Moorman IV, a winter of discontent is nigh. Amtrak is unlike the polished and profitable Norfolk Southern from which this Mississippi-bred civil engineer and son of college professors retired as president, chairman and CEO. Indeed, Amtrak, on life support since its 1971 creation, is a poster child for legendary talk-show host David Letterman’s signature empathy, “I wouldn’t give those troubles to a monkey on a rock.” Neither U.S. presidential candidate shares President Obama’s passion for passenger rail spending; the electorate increasingly opposes higher taxes, more subsidies and bureaucracy; and Amtrak haters in Congress are a formidable force, successfully and progressively shifting financial responsibility for passenger trains to cash-strapped states. Amtrak’s statutory dispatch-preference over freight trains is under attack as neither absolute nor in perpetuity; a statutory provision allowing Amtrak to conspire with federal regulators to saddle freights with performance standards when hosting Amtrak trains was nullified by federal courts; and a Surface Transportation Board definition of “on-time” arrival of Amtrak trains on freight-rail track is ripe for court challenge. Internally, Amtrak is troubled. Its top cop is ensnarled in a fraud and conflict-of-interest investigation over a $2 million contract given an alleged paramour. Previously, a chief engineer favored a neighbor with a $2 million consulting contract. Acela Express was plagued by 9,000 design changes, production delays and breakdowns that spawned extensive and costly litigation. Deception has been alleged in Amtrak financial accounting. And former presidents Tom Downs and George Warrington disingenuously proclaimed

to Congress that Amtrak was on a “glide path to self-sufficiency.” Recently, Amtrak was outed in a failed effort to suffocate commuter-operator competition by limiting access to Washington Union Station; Joe Boardman relentlessly changed out senior executives, many in essential safety positions; and Boardman, after citing declining revenue to justify limits on new hiring plus cuts in retiree health-care, pension benefits and departmental budgets, puzzlingly hired as a consultant the wife of a union boss deeply involved in

Moorman has the opportunity to transform it into a Casablanca-movie moment. Amtrak labor issues. As for Amtrak’s inspector general, charged with sniffing out waste, fraud and abuse, he serves at the pleasure of the Amtrak board. While Amtrak’s White House-nominated and Senate-confirmed board of directors to which Moorman reports no longer is larded with political hacks, its oversight, given the above examples, is arguably weak. Moreover, it has passively allowed Amtrak senior management to ignore the loss of significant numbers of Northeast Corridor passengers to intercity bus operators offering more frequent departures and competitive trip times. Nor is there effort to partner with Uber—the world’s most valuable startup—to create a seamless “first” and “last” mile using an app to summon a car. This all should be enough to make a preacher cuss, but Moorman, with his

private-sector background, understands fully the tragedy of the commons— that when everybody owns something, nobody takes an ownership interest. Surely Moorman can encourage publicprivate partnerships injecting greater market-based disciplines. The Federal Railroad Administration is writing rules to implement a congressional urging that up to three Amtrak long-distance routes be privatized—a pilot program to transfer, for up to eight years, 90% of Amtrak’s existing subsidy for that route to a responsible applicant proposing equal or better service. Yes, it’s risky. Amtrak supporters fear that even limited privatization will further erode congressional support for a national interconnected rail passenger network. The reality is that Amtrak is an island of socialism in an American sea of capitalism, and the status quo cannot much longer endure. Privatization also may be a viable solution for the 450-mile Northeast Corridor, whose price tag for renewal of century-old infrastructure, capacity expansion and increased train speeds conservatively exceeds $50 billion. Only an irrational romantic assumes Congress, which starves highway and other critical domestic infrastructure projects, will appropriate the funds. The American Intercity Rail Network for the 21st Century (AIRNet-21), a public-private partnership prepared to invest $60 billion in NEC infrastructure renewal and expansion over 50 years, with zero from congressional appropriations, deserves Moorman’s attention, along with other responsible marketbased alternatives to the status quo. Moorman has opportunity to transform a winter of discontent into a Casablanca-movie moment: Wick, this could be the beginning of a beautiful friendship with Congress and the American people. October 2016 Railway Age 13

Can we bank

on intermodal?

The industry has done well with long-haul COFC and TOFC. Is it willing and able to go after short-haul traffic, to grow the top line?

oal is no longer king and will not return to the position it once held as the industry’s largest revenue stream. Crude oil might bounce back, a little. Motor vehicles are cyclical. Grain is profitable but seasonal. Truth be told, the industry has done a stellar job lowering operating ratios, but it has largely accomplished this this by cutting costs and improving efficiency and productivity. Wall Street loves this kind of activity, because too many Wall Street types can’t see beyond the next fiscal quarter or two. That’s the 14 Railway Age October 2016

nature of their business. But trimming only goes so far. One can’t keep hacking away at limbs until only the trunk remains. Yes, a tree has to be pruned, sometimes to get rid of the dead wood. But if the tree is to survive and thrive, it must grow. Where will top-line growth reside, once the economy rebounds and traffic starts flowing back onto the rails? Some experts say intermodal, and not necessarily long-haul. Are the experts right? Is the industry doing enough to capture truck traffic and provide the excellent service demanded by

All photos: Bruce E. Kelly

By WILLIAM C. VANTUONO, Editor-in-Chief, with Contributing Editor BRUCE E. KELLY

intermodal users? Can our success with long-haul service be translated into short-haul success? Is short-haul business worth chasing, and are the railroads flexible and open-minded enough to do what it takes to develop this business? The story of then-Santa Fe Railway executive Mike Haverty’s handshake deal with the late trucking magnate J. B. Hunt more than 30 years ago on a demonstration TOFC run out of Chicago is legendary. Today, much of Hunt’s long-haul container and trailer traffic is railed. Less known are the stories of other, far-less-visionary railroad managers railing against intermodal. Recalls one nowretired intermodal executive who did a lot during his career to grow business and improve service: “Intermodal sales began as a function of the intermodal departments because the carload guys hated our guts. When I ran intermodal operations for a Class I, a friend on the carload side over lunch told me that his boss, the Assistant Vice President of Sales, told all of his salespeople that he would fire any one of them who he caught selling intermodal.” Thank goodness those days are long-gone, and the dinosaurs opposed to working with—gasp—truckers, of all people, are mostly extinct. So where do we go from here? Conventional thinking says that short-haul intermodal doesn’t make money. Conventional thinkers, however, may be wrong. “Short-haul intermodal is one big untapped area for the railroads,” says this same former intermodal executive. “Most of what is needed currently exists. For short-haul markets, it cannot be in stacked containers. The terminals need to be lean and mean—no $100 million-plus stack terminals. No lift machines. If you are a “rich railroad,” pave the terminal, if you must. The equipment hauled needs to be trailers. The cars need to be side-loaded by the trailer owner’s delivery drivers on a ramp and positioned. Check-in and check-out needs to be very rapid—one of the few places to use rail labor in the terminal. The only other rail labor should be supervision and security.” Steve Ditmeyer, one of the industry’s visionaries and a frequent contributor to Railway Age articles and conferences, offers this analysis: “In my humble opinion, short-haul intermodal (250 to 700 miles) represents the only opportunity in the near future for railroads to increase their traffic. And they only need to capture just a small fraction of the total short-haul truck traffic to experience a substantial traffic gain. “Two things are needed to pull this off. The first is new rollon, roll-off equipment on the order of the CSX/New York Air Brake Iron Highway trainsets and CP Expressway trainsets, or the CN/Wabtec Intermodal Ramp Cars. The designs for this equipment already exist, and the carbuilders now find themselves with plenty of excess production capacity. “The second thing the railroads need is a train control system to enable them to run short-haul intermodal trains on precise schedules. Fortunately, their PTC systems will be coming on line in the next year or so. GPS plus digital communications will provide the continuous real-time information to enable them to execute tightly scheduled operations, should they elect to do so. “When I was at MK Rail and assembling the Iron Highway

trainsets for client CSX Intermodal in the mid-1990s, numerous trucking companies, a major parcel delivery service, and a major grocery chain literally pleaded with us to sell Iron Highway trainsets to them. That was without MK doing any marketing of the equipment; word had gotten out of our contract with CSXI. I had to refer these potential customers to CSX Intermodal, which had acquired the rights to Iron Highway from NYAB, and CSXI did not want others to have the technology. I was disappointed because I sensed a very strong interest from these trucking companies and shippers in using the equipment to cut the costs of their short-haul over-the-road trucking operations.” The Iron Highway began as a development by NYAB as part of the Association of Amer5ican Railroads’ High-Productivity Integral Train (H-PIT) program in the 1980s, “and it ended when McNeil Porter, president of CSX Intermodal, lost his fight with Pete Carpenter to keep CSXI independent of CSX Transportation in late 1995,” Ditmeyer recalls. Opines Railway Age Contributing Editor Roy Blanchard: “My thesis beyond coal: We’re in a 2%-growth economy where there is less stuff moving than in a 3-4% economy. Finished goods from cornpone to white goods are less in

Mike Haverty got it right: “Mr. Hunt, I have this train, and I’d like you to fill it.” demand, so you need less raw material to meet what demand there is. Lower demand for finished goods equals fewer goods moving to market, and what goods are moving are moving by truckloads, not carloads, in amounts more fitting for smaller inventory loads. So, yes, it’s a freight recession, and the bloom is off the Railroad Renaissance. “The bloom is off because with the Staggers Act, all kinds of new doors were opened. But now it’s all business as usual. The Staggers “Wow Factor”—credit Jim Blaze with that— of contract pricing and pricing to what the traffic will bear without the ICC looking over your shoulder has morphed into order-taking and pricing by computer model to maximize revenue and minimize cost. The essential purpose of any business—creating customers—may have been lost. “We’re not solving for what it’ll take to make the railroad product preferential to the truckload. Maybe the railroads need to get out of the carload selling business altogether and turn that over to third parties, as many did with intermodal eons ago. Mike Haverty got it right: ‘Mr. Hunt, I have this train and I’d like you to fill it.’ That can work, even in a 2% economy.” Adds Jim Blaze, a veteran railroader, economist and industry consultant: “Increased domestic truck competition with more short-term truck lead rate quotes plus a slower growth economy means that the pattern we saw in 2012-2014 of rail intermodal growth at two to three times the rate of GDP October 2016 Railway Age 15

INTERMODAL

growth is gone. Is that a response to rail pricing plus rail service plus truck short-term pricing plus short-term truck and driver supply capacity?” PNW to Texas, Direct

Long-haul intermodal, of course, will continue to be a growth engine. One example is BNSF’s new Pacific Northwest-Texas intermodal lane, up and running last month. Contributing Editor Bruce E. Kelly reports: The first run of BNSF train Q-PTLALT, which introduced direct intermodal service between the Pacific Northwest and Texas, got off to such a good start that it was nearly eight hours ahead of schedule by the time it exited Washington State shortly before 10:00 p.m. on Sept. 13. It originated earlier the same day in Portland, Ore., picked up additional cars in South Seattle, Wash., then made a straight dash east through Billings, Mont., then south through Denver to ultimately reach BNSF’s Alliance Terminal outside Fort Worth, Tex. Together with counterpart Q-ALTPTL (which departed Alliance the same day), this new intermodal lane will see trains departing five days per week in both directions. BNSF says shippers in the Portland/Seattle region can now cut two days from the transit time to Texas compared to other existing rail options, and feels this new service will be “comparable in speed to single-driver, over-the-road options.” Eastbound Q-PTLALT is scheduled to reach Alliance by the morning of the fifth transit day, while westbound Q-ALTPTL is supposed to reach Portland by the sixth transit day. According to BNSF’s automated online Intermodal Advisor, a refrigerated trailer or container traveling from Portland to Alliance is estimated to save a shipper 9%, or $322, using this new service. BNSF predecessor Burlington Northern began running intermodal trains between the Pacific Northwest and Houston back in 1985, but that service ended in the mid-1990s. The recent decline in coal traffic out of the Powder River Basin of southeastern Montana and eastern Wyoming has freed up space that makes PNW-Texas intermodal feasible once again. As BNSF puts it, the railroad is “leveraging underutilized capacity in the central section of BNSF’s network.” 16 Railway Age October 2016

That sentiment is shared by Montana Rail Link President Tom Walsh, whose main line carries many of BNSF’s trains across southern Montana. Walsh says, “With the decrease in coal volume over the past couple of years, capacity has opened up on the MRL and BNSF coal route. This new intermodal service offering is a great example of MRL and BNSF’s ability to adjust and grow our business while putting back to work underutilized infrastructure.” Between Missoula and Paradise, Mont., MRL will make discretionary use of two separate routes to handle BNSF’s new trains on a day-by-day basis: the 10th Subdivision via Ravalli (unsignaled, 2.2% grades, light traffic) or the 4th Subdivision via St. Regis (signaled, minimal grades, heavier traffic). Jim Lewis, Chief Sales/Marketing and Information Officer for MRL, says, “Having the option to run the 4th or 10th Subdivision allows us flexibility with the new traffic to utilize the route that produces the best velocity for BNSF and its valued customers.” Lewis further points out, “There are no plans to pick up or set out local intermodal traffic at this time, although this could be an option in the future.” A key commodity group being targeted by BNSF’s PortlandAlliance service is perishables. BNSF says, “Faster, more direct routing means agricultural producers can move apples and other produce to Southern markets at the peak of freshness.” Some of the Northwest’s largest growing areas, including central Washington’s apple country, are located near intermodal facilities in Wenatchee and Quincy, which BNSF served in the past. Amy Casas, Director-Corporate Communications for BNSF, says, “Currently we are offering the movement of containers and trailers from Portland, so customers with perishables that move in trailers will need to get them to Portland for transport. Perishables that move in temperaturecontrolled containers will also have Seattle as a transportation option. We are currently only offering the movement of containers out of Seattle.” Zak Andersen, BNSF Vice President Corporate Relations, tells Railway Age, “Route-miles, Portland-Seattle-Texas, are 2,565. It’s our second-longest service offering, with Stockton, Calif., to Fairburn (Atlanta), Ga., being our longest at 2,787 miles.” RA

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Turning on the intermodal tap

in Portland, Maine By Ben Vient, Managing Editor

bout 800 million gallons of water flow through Maine aquifers for the Poland Spring company each year. Since January 2016, containers full of that water flow south from Maine by rail. It began as Portland, Me., renewed its once prosperous port, “and new rail development became part of this renewal,” says John Henshaw, Executive Director of the Maine Port Authority. “We can attract more business to our port, if we have more shipping options.” “We were trying intermodal years ago, and it didn’t go as well as we’d like,” says David Bernhardt, a 33-year veteran of Maine’s Department of Transportation, and currently Commissioner. “But we believe the different players are cooperating better now, and this new Poland Spring project is a good example to illustrate intermodal opportunities.” Eimskip, an Icelandic shipping company, began carrying containerized cargo between Portland and Europe in 2013. The Maine Department of Transportation had prioritized $40 million in state, federal and private funds to upgrade the International Marine Terminal (IMT), including the

18 Railway Age October 2016

addition of 1,500 feet of track to connect with an existing Pan Am Railways main line nearby. Poland Spring, one of Maine’s most iconic businesses, became the first to use the port’s intermodal rail option, including renting Eimskip containers. “The rail option fit with our company’s interest in our environment,” says Christopher Haynes, Northeast Logistics Director for Nestle Waters North America, owner of Poland Spring. Commercialized since 1859 from the actual fresh water spring bearing the company’s name, Poland Spring exists in a water-rich area known since the times of Native Americans. The company maintains three bottling plants in Maine: Poland Spring, Kingfield and Hollis, which is the largest bottled water facility in North America and second-biggest in the world. “Getting all of our water west, south and north from Maine requires a lot of transportation,” says Haynes, who notes since the bottled water craze took off in the U.S. in the late 1990s, an increased number of trucks brought the

product to market. Reading about the development of Portland’s IMT, Haynes inquired about trial rail runs. “Poland Spring’s initiative, Haynes’ especially, really got this going, really opened our eyes to more of these possibilities,” Commissioner Bernhardt says. Haynes’ trial runs proved successful in 2015, and in January 2016, Poland Spring began trucking palletized bottled water 20 miles from Hollis to the Portland IMT intermodal terminal. Some 45 containers are then loaded onto trains bound for Massachusetts three days a week: Friday, Saturday and Sunday. In April 2016, Poland Spring expanded the initiative to bring an additional 60 containers by truck from Kingfield, Me., 45 miles to the Pan Am railyard in Waterville, Me., then by train 75 miles to Portland to join the train traveling south to Ayer, Mass. Here, trucks bring the pallets from the 105 weekly containers to area distributors. “This arrangement between Poland Spring, the Maine Department of Transportation and Pan Am has proven successful,” says David Fink, President of Pan Am Railways. “It’s led us to discussions to expand south into New England and New York.” In addition to the Ayer intermodal terminal, Pan Am, a Class II carrier, has built a new intermodal terminal in Mechanicville, N.Y., with its partner Norfolk Southern, westward along the upgraded Patriot Corridor. It hopes to attract Poland Spring and others to expand there with intermodal, enticed by rail’s generally lower transportation costs, since greater volume can be moved with less fuel and fewer workers. “It makes sense for us to encourage more of these intermodal initiatives,” Fink says, “especially with companies such as Poland Spring that have environmental considerations as part of their branding.” Haynes calculates that Poland Spring will move 4,600

containers from Maine by rail instead of trucks in 2016, a reduction of 500,000 road-miles and 5,400 metric tons of carbon emissions. The company estimates it’s the equivalent of removing 1,100 automobiles from the roads annually. “People can see the congestion savings on the road,” says John Henshaw, explaining why the state is financially supporting rail projects like this through its Industrial Rail Access Program (IRAP), which grants up to 50% of estimated rail project costs. (Pan Am Railways received a $201,060 IRAP grant for this project in Waterville, which it then matched.) “Heavy trucks damage our roads. We’re hoping our IMT development here can get more of the large companies to move to rail, and make the transport costs competitive for them to do so.” “We can’t continue expanding interstates; what are we going to do?” Bernhardt asks. “We like to say we are ‘modeagnostic’ in the Department of Transportation. But if we can all work together to improve the rail mode, we’ll do our part to push it for the benefits of everyone, including the public.” In the summer of 2016, the federal government’s FASTLANE program awarded Portland’s IMT a $7.7 million grant, to be matched with an additional $7.7 million from state and private funds. Henshaw explains the money will be used to increase rail capacity by adding railcar storage track, and additional siding tracks for loading purposes. Currently, 10 cars can be loaded here at a time, which will be doubled after this expansion. The IMT will also solicit a bid for a new Mi-Jack RailPacker. Next year, a cold storage facility will break ground at Portland’s IMT, opening further intermodal and market possibilities. “The Poland Spring project has proven this rail component can work well,” Henshaw says. “We hope these next developments will show everyone how intermodal can work better for our future.” RA

October 2016 Railway Age 19

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Special care around

special trackwork

More sustainable track geometry comes from better ballast compaction, which begins with better quality tamping.

amping is a key maintenance strategy to maintain track geometry at switches, crossovers and turnouts, but it requires a level of detail to guarantee accuracy and safeguard against damage. Manufacturers of tampers capable of performing in these areas have incorporated new technology and new equipment designs to ensure synchronized lifting of track components, ideal tamping pressure and no undue stress placed on track assets. Plasser American

“Switches require proper attention when being tamped. Due to their design features, switches are subjected to the heaviest wear by railway traffic and makeup a significant portion of the track’s fixed assets. Therefore it is vital that switches receive careful maintenance. The optimum quality of the switch geometry has to be assured in the long term by regular maintenance.

By MISCHA WANEK-LIBMAN, Engineering Editor

This can be achieved by using large heavy-duty, high-quality machines,” Plasser American Corp. says. Plasser says it has developed and manufactured switch tamping machines using its well proven tamping technology to guarantee the optimum quality in switches since 1962. The company has developed many features that address the unique problems of switch tamping and notes that regular maintenance helps extend the service life of these valuable track components, as well as eliminate slow orders, reducing operational delays. “Long wheelbase machines, like the Unimat series, reduce the stresses on switch components during lifting. This is particularly true in large switches utilizing concrete ties. The Unimat series tampers are available as conventional or continuous-action indexing machines and with optional integral dynamic track stabilizers,” the company says. Plasser’s “Split Head” tamping units are individually October 2016 Railway Age 21

M/W focus: TURNOUT TAMPING

controlled, with both lateral and vertical adjustment. These tamping units are available in single- or dual-tie tamping versions. Additionally, tilt tamping tools are available as an option. “This unique split shift system provides several major advantages over other switch production tampers. Each tamping unit is raised and lowered vertically instead of at an angle, insuring the tamping tool depth remains at the correct depth, which concentrates ballast compaction near the rail base area where it is most needed. Unnecessary tamping at or beyond tie ends or center binding of ties is eliminated. Each individual tamping unit control allows complete switch tamping with a minimum of horizontal tamping unit adjustment, thus reducing the amount of time required to tamp a switch,” says the company. Plasser’s third-rail lifting device on its heavy-duty switch tampers is synchronized with the main lifts and lifts the turnout rails through the long ties, which reduces the stresses on the ties, rail and fasteners and eliminates the need for additional track jacks. The latest version of the Unimat tamper is the 09-475/4S N Dynamic, which combines ballasting, tamping, regulating and stabilizing into a single machine. Plasser says this achieves a substantial simplification of the worksite logistics with a high savings potential. “In one single working pass, this machine performs the

complete sequence of work for the maintenance of turnouts and tracks,” the company says. Harsco Rail

Even with a decrease in traffic, increased productivity remains an important goal to rail customers. Harsco Rail’s DRONE Chase Tamper, a truck-transportable unmanned tamper that follows behind a lead machine and tamps those ties the lead machine misses, was developed to help meet that goal. Harsco explains that any tamper equipped with the company’s Jupiter control system is capable of acting as a lead machine to the DRONE, allowing a standard production/switch tamper to become a high-production tamper. The company explains that redundancy is gained, meaning a railroad could have a fleet of production and switch tampers that can be turned into high-production tampers with the inclusion of the DRONE. Harsco notes that the DRONE, being a separate unit, allows it to deal with varying track conditions such as poor tie spacing or skewed ties. Many of Harsco’s tamping units, such as the 6700 Production Tamper and Small Tamping Machine, come equipped with the Positive Displacement (PD) Workhead, which the company says provides better ballast penetration and compaction in a split tool design. The PD Workhead uses 16 paddlestyle tamping blades (two per head) that are positioned

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Railway Age

October 2016

M/W focus: TURNOUT TAMPING

hydraulically to precise depths using position sensors located on each head, to provide position feedback to the Jupiter II Control System. The workheads have the ability to operate in a normal production mode or can be operator-positioned sideways hydraulically to accommodate switch work, tamping in turnouts and crossovers. The company also has the 3000 Utility and Spot Tamper made for switches, crossovers or production tamping and lining. Harsco says the 3000 Utility and Spot Tamper is equipped with the same high-performance, heavy-duty workheads as the 6700 tamper and delivers exceptional tamping quality and accuracy, which translates into reliability and productivity for Harsco’s customers. Nordco

Nordco Inc. launched its RoadReady™ Surfacing Team in 2015 for customers to “gain mobility without sacrificing productivity” and plans to deliver the first production units in early 2017. The surfacing team is comprised of the RoadReady™ RST-1000 Production Switch Tamper and RBR-1000 Ballast Regulator. The RST-1000 and RBR-1000 form a mobile Surfacing Team that individually attach to over-the-road tractor-trailers for transport between job locations. All components lift and fit within the frame to meet height and width

requirements for permit-free travel and can ride at posted highway speed limits, which the company says allows operators to get on and off the track much quicker than with rail-bound surfacing equipment. Nordco said the surfacing team improved the reactive surfacing process by allowing users to quickly travel to the work site and rectify the track condition. The RST-1000 tamper is equipped with a multiclamp, which allows for road-to-rail transition either parallel or perpendicular with the track. The equipment also includes split workheads to tamp switches. RA

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The Railroad: What it is, What it does The fifth edition of The Railroad: What It Is, What it Does is even more valuable than before. Inside you’ll find a comprehensive look at how today’s railroads function—from equipment to procedures and marketing to maintenance. The fifth edition is an indispensable resource for anyone wanting to learn about modern day railroads. The book delves into many facets of the railroad industry including such topics as freight cars, locomotives, track, signal and communication technology, intermodal traffic, operations, labor relations, and design engineering. Softcover, 440 pages.

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TRANSIT FOCUS:

VANCOUVER All photos: Translink

Aiming skyward in Canada’s western city

new generation of rolling stock entered passenger service on Vancouver’s SkyTrain driverless “light metro” network on Aug. 18, 2016, when Kevin Desmond, CEO of transport authority TransLink and British Columbia Rapid Transit (BCRTC) President and General Manager Vivienne King welcomed passengers on board the first Mark III train at Waterfront Station. Translink placed a C$90.7 million (U.S.$70.6 million) order with Bombardier in December 2012 for seven four-car Innovia

300 trains to expand fleet capacity in readiness for the opening of the 17.2-mile Evergreen Extension Line from Lougheed Town Centre to Port Moody and Coquitlam later this year. The six-station Millennium Line Evergreen Extension is currently being constructed by the Province of British Columbia, and TransLink will soon take over its operation. When the extended Millennium Line is combined with the original Expo Line and the Canada Line, the entire SkyTrain system will be 49 miles in length, with 55 stations. It will be the longest October 2016 Railway Age 27

TRANSIT focus: VANCOUVER

automated rapid transit system with unattended (driverless) train operation in the world, and the longest grade-separated rapid transit system in Canada. The Skytrain light metro (a hybrid light rail/rapid transit) system currently consists of the Expo Line, 17.6 miles, opened in 1985; the Millennium Line, 12.4 miles, opened in 2002; and the Canada Line, 12 miles, opened in 2009. The new four-car Bombardier Innovia 300 trains provide

greater passenger capacity and better traffic pattern flow with an open articulated design. The first-generation Mark I trains hold 80 people per car, and 130 is the nominal capacity of a newer Mark II while the older Mark IIs have a nominal capacity of 123. The average Mark III has a capacity of 133 per car. Each Mark III car features modern LED lighting that provides a brighter-lit car interior for customers. Larger front and side windows add more natural lighting.

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All About Railroading by Railway Age Editor William C. Vantuono

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

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TRANSIT focus: VANCOUVER

Translink promised more accessible-transit features with these cars, including larger open spaces available for bikes, strollers and wheelchairs. The cars have a longer-lasting battery system that is lightweight and smaller in size. These batteries are expected to last 25 years compared to 10 on the existing fleet. New passenger doors were designed with improved sealing when closed, reducing noise to the car interior and offering quieter operation. Overall, the aluminium-bodied articulated Mark III trains will have fewer structural noises (rattles, squeaks, etc.) during operation due to improvements in manufacturing processes and materials, Bombardier said. In June 2016, Prime Minister Justin Trudeau, B.C. Premier Christy Clark and Vancouver Mayor Gregor Robertson announced an agreement to fund transit expansion in the Vancouver region. It means detailed planning can continue for further rail transit expansion in the cities south of the Fraser River. And it also continues detailed work for a second extension to the Millennium Line along Broadway in the City of Vancouver, to replace a portion of the 99 B-Line, believed to be the busiest bus route in North America. Since 2012, TransLink has increased its focus on transitoriented development (TOD) that, by design, allow people to drive less and walk, cycle and take more transit. Currently, 50

TOD projects represent more than $15 billion in development activity. In partnership with the City of Richmond, Translink concluded an agreement that establishes a framework for North America’s first 100 % privately funded rapid transit station. TransLink became the first Canadian transportation organization to achieve Platinum level status for sustainability from the American Public Transportation Association (APTA) in 2015. RA

Are you a railroad or supplier searching for job candidates? visit http://bit.ly/railjobs THE RAILWAY AGE JOB BOARD connects candidates and opportunities in the rail industry. To place a job posting, contact: Jeanine Acquart • 212 620-7211 • jacquart@sbpub.com October 2016 Railway Age 29

ailway ge R A RAILROAD FINANCIAL DESKBOOK 2017 33

THE MARKET IS STUCKâ&#x20AC;&#x201D;FOR NOW By David Nahass

company profiles

RAILROAD FINANCIAL DESKBOOK 2017

Cover photo: David Thomas. All other photos: Bruce E. Kelly

The market is stuckâ&#x20AC;&#x201D;for now

elcome to the 2017 Railroad Financial Desk Book. The rail economy is in the second year of a significant cyclical downturn. While manufacturers continue to work on the railcar backlog that had accumulated in the previous two years, orders for new cars are off precipitously. Expectations that there would be market segments such as grain and plastics that would step into the order book void left by the cessation of orders for energy-related railcars have not been fulfilled. In short, the market lacks any foundation upon which to build and rise out of its extended softness. At the risk of being accused of over-beating the same drum, the decrease in railcar loadings is the heart of the problem. At some point, the decrease in loadings attributable to the downturn in coal and energy (sand, crude and other linked midstream products) needs to be replaced. This in turn will decrease velocity and return the total number

By DAVID NAHASS, Financial Editor

of cars operating in the system to levels more in line with recent historical numbers. Ask an industry veteran from where this growth is going to come and you will get a variety of different answers. They range from the modest (aggregate cars and flatcars) to the eternally optimistic (centerbeam flatcars) to the pessimistic (I donâ&#x20AC;&#x2122;t know when it is coming back) to the middle-of-theroad core commodity types (grain and plastics). Fact is, other than for an extreme escalation in the pace of grain loadings or weather-related traffic disruptions (think the polar vortex), the market is pretty much stuck, and most of the industry is uncertain as to when strength will return. The word on the street generally is that, across many market segments, some insiders are suggesting that some of the worst markets have bottomed. In some cases, that may be true. With 30,000 to 40,000 small-cube covered hoppers parked out of a fleet of 120,000 cars (that same fleet was October 2016 Railway Age 33

RAILROAD FINANCIAL DESKBOOK 2017

60,000 cars in 2008) and up to one-third of the tank railcar fleet in storage (roughly 100,000 cars), it’s difficult to imagine that there is much more downside in that market (though a move to $20/barrel oil might make a case for it). Ditto for coal and railcars hauling coal, where the percentage share of the national fleet of aluminum cars that are parked is equal to roughly 15%. Coal is at a “bottom” now. However, with some additional mix of environmental regulations, continued low natural gas prices and the ongoing impact of a strong U.S. dollar on coal exports, potential future headwinds will need to be confronted before loadings will begin to rise in earnest. Knowing where the bottom is has its charms, but it does not indicate much about the chances of a rebound. Any rebound has headwinds, as well. One interesting market dynamic is the interplay among the manufacturing community, the lessor community and the investor marketplace. Surprisingly, as the rail market tries to find a bottom, new investors flush with investment capital continue to seek out assets for purchase. Periodic harvesting

Railway Age

October 2016

of equipment from large portfolios entertains a large segment of the railcar leasing business at any one time. As noted before in previous “Financial Edge” columns, asset prices in “secondary market” sales (when assets owned by one investor are sold to another investor) have been running at high levels that have sidelined some of the market’s biggest buyers. Who are these new, capital-flush buyers? Most are investors backed by some mix of private equity and international investor money. These new entrants keep entering the market and keep chasing the prices higher. What are they buying? Besides the asset itself, these new buyers are purchasing lease obligations, with a sense of possession embedded in every lease. As every operating lessor knows, it’s easier to keep a customer than find a new one. The polemic for the secondary market is that these cars are being sold with leases containing rates that are out of line with today’s market, and that align with rates typically seen in markets where demand for cars exceeds supply. As the market continues to roll through its downturn where car demand is significantly less than car supply, and these

RAILROAD FINANCIAL DESKBOOK 2017

high-priced cars come up for renewal, the renewal rents will likely be at a serious discount to the rents when purchased. This may lead these high-priced buyers to lease cars shortterm at low rates, looking to tread water until rates increase. More headwinds

On the other side of the market, with significantly fewer new orders, the market is rife with rumors of discounts on new car pricing and on new cars being offered for lease at “used car prices.” (In some cases, some secondary market sales are at levels that are within 10% of the cost for a new car of the same capacity and design.) Market intelligence suggests that new cars are being offered for rentals that are lower than a lessor who may have purchased the same asset two years ago and can step down to and remain profitable. With new car retail prices discounted up to 25% for some car types, the manufacturers have tremendous latitude in the lease rate that can be offered for a brand-new-off-theline railcar. One unintended consequence of the market downturn is the potential for financial investors to take a more conservative approach in their future railcar residual estimates. For a period, banks and their leasing arms dove head-first into the pool to compete with operating lessors for a share of the rail market. Now, two factors are in play. One, banking regulations are requiring higher capital allocations.

LEASED 6700 TAMPER

Two, some percentage of youngish equipment with historically high residual values may be headed back to those investors. This may strike the wrong chord for investors not looking to take large write-downs. Collectively, the incongruence of ballooning asset values and steep discounts on new cars creates a jittery market that favors lessees in the short term, disrupts forecasting the length of the downturn and frustrates long-term investors in equipment. Adding more new cars to a market where there is already an oversupply will delay market rebalancing. Additionally, the lower rates being offered on new cars destroy any attempt for lessors to impose price discipline on a disorderly rental market. Every operating lessor has their turn as being the party who didn’t “tow the line” for the good of the industry. It’s easy to wish but pretty difficult to blame a railcar manufacturer for building a railcar, given the opportunity to do so. With prominent economic minds such as Lawrence Summers suggesting that the likelihood of a recession in the next three years is 50/50 (https://www.washingtonpost.com/news/ wonk/wp/2016/05/24/larry-summers-what-you-need-toknow-about-the-next-recession-starring-donald-trump/), continued increases in car supply to an already-oversupplied market mixed with asset inflation has a Molotov Cocktail quality that the industry would like to avoid. In last year’s Desk Book, the general consensus was that, as an industry

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Progress_Rail October 2016 Railway Age 35

RAILROAD FINANCIAL DESKBOOK 2017

“we always overbuild.” While the causes for the overbuilding are understandable, after a landmark year in which the building of 80,000-plus railcars occurred, many people wish there would be a new world where we didn’t. Around the Market

It would be great to write that, in finding a bottom, rates are stabilizing and beginning to rise. Alas, that is not the case. Rates over almost all market segments continue to be depressed, and the case for change or improvement, especially in some markets, seems thin. Sadly for car owners, after a period of good rates, current lease rates are almost punitive to lessors. Yet, for investors, low lease rates and the ability to avoid storage costs add up to a proverbial win. Here’s your semi-annual update on rates and market sentiment (all rates are per-car, per-month, full service): Coal: You want the good news or the bad news? Good news: The hot summer that carried into September has lifted natural gas up to $3.00/million BTUs for the third time since July. Some industry watchers have a sense that the coal market has bottomed out. Some lessors seem to have pulled back on some planned scrapping or bottom selling, looking for a little bump in the market to take advantage of, nearterm. Bad news? With the number of cars in storage, bottom trolling does not offer much hope. Lease rates are all below

$200 (and in many cases much lower). This market needs a weaker dollar to bring exports into play again. The impact from exports is tangible but not game changing. The available inventory of bottom-dump hopper cars is less than that of gondola cars. Plastics: Demand hasn’t materialized near-term as expected, but it is on its way. Rates have dropped into the low $500s. Expect them to stay there near-term. The buildout of new production is coming, and the forecasted need for cars will arrive. There has been some building of cars that might have begun their order life as small-cube hoppers, but it hasn’t been extreme. Grain: Commodity prices (corn and soybeans) continue to drop as the 2016 harvest is expected to be at historical levels. Low prices are hurting the farm community. Global demand due to non-U.S. crop-related issues haven’t yet materialized at expected levels. There has been speculative building. New cars are out and in competition with existing equipment. Prices are partying like it’s the 1990s, with jumbo cars (5,200 or 5,400 cubic-foot-capacity) going off in the low $300s, but that is likely to rise. 4,750s? Rates are in the $225 range and rising. These are in abundant supply and many are headed back to their current lessors. Many investors are pinning their hopes on weather that may delay the harvest (especially in Canada) and ultimately spur railcar demand. “Wait until next year” might be more prescient than

CIT Knows

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Railway Age

October 2016

RAILROAD FINANCIAL DESKBOOK 2017

investors would have hoped. Sand and Cement: Not a great deal of hope here. After tremendous overbuilding and with cars still in backlog, there’s significant work to be done before this market looks functional. Numbers on the street are low $200s. Upside? This market has some hope. As oil and natural gas prices rise, increased drilling will drive proppant (frac sand) demand, and the quantity of sand being pressed into the horizontal wells continues to increase. Nonetheless, it’s a long climb ahead, no matter the price of oil. Steel: With scrap languishing and steel demand down, this market has really taken a beating. The cars serving this segment need reinvestment, but the commodity does not support the price of a new car. Older 52-foot mill gondola cars are leasing in the low- to mid-$200s, while an averageage 66-foot car is in the mid $400s. A little perspective so readers can understand the impact: Within the past two years, a new 66-foot mill gondola car was coming off the production line for more than $110,000 per car. The market trend is moving away from the 263,000-pound GRL car to a more modern 286,000-pound GRL car. Boxcars: There has been some building in this segment, as car supply has increased with velocity and under-supply went mostly to parity. All segments seem to be continuing in reasonable fashion, with reasonable market demand for 100-ton Plate C cars and newer, bigger 110-ton Plate F

50-foot cars. For prices to continue to rise, turn times need to decrease. That’s not expected to happen for some time. Rates? For 50-foot Plate F cars, the going number is in the low $600s. For Plate C cars, investors are seeing $300-$325. Tank Railcars: Crude-oil tanks remain marginalized no matter what the build spec (though legacy cars are in a rougher spot). Pressure cars remain under pressure, and even traditionally strong 23,000- and 25,000-gallon tank railcars are in excess supply. This market has some room to run before a turnaround. Our Man in the Fields

Steven Yontz and his brother Doug run the Yontz Farm in Delevan, Ill. Steven cut his railcar chops working for the Dow Chemical Company in the treasury group. I spoke to Steven while he was mid-harvest and literally on the combine, bringing the 2016 harvest in from the fields. The Yontz Farm has been operating since 1854, 162 years; Steven and Doug are 6th-generation farmers. The farm totals 3,500 acres of family-owned-and-operated land (40 of which formed the original farm in 1854). I asked Steven a few questions about the current harvest and how the Yontz Farm manages the dynamic commodity market for the corn it grows. RAILWAY AGE: Where does the grain go when there is so much commodity coming in from the harvest? Steven Yontz (SY): The Yontz Farm has 430,000 bushels

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October 2016 Railway Age 37

RAILROAD FINANCIAL DESKBOOK 2017

of on-site storage capacity, so for our farm, we invest in storage to be able to store all of our grain to play in the carry market. When there is a large harvest, we stockpile corn. So, if that corn gets wiped out, the price drops and the farmer gets hurt. From 2014 to 2016, elevators invested in commercial storage capacity. Without on-site storage, farmers are forced to sell sooner than later, as hefty storage fees at a commercial elevator will cut into profits. RA: How long can a farmer delay movement of corn if itâ&#x20AC;&#x2122;s properly stored while waiting for prices to rise? SY: Corn can be stored for an entire year as long as 15% moisture, which is optimal, is maintained. While it can be stored for longer periods without any real loss of quality, thatâ&#x20AC;&#x2122;s pretty rare. Farmers always have a new crop coming in, so they need to prepare to move the current crop in 12 months. For example, we moved the last of our 2015 crop by July 2016 to prepare for the 2016 harvest. Otherwise, we would need to build more storage, and that will lose economic viability at some point. RA: Yontz Farm hedges some of its crop. Could you survive without hedging? SY: We could survive without hedging, but we hedge for purposes of risk mitigation. We use option strategies to lock in a floor for the commodity price. When option prices are high, we can use that option to set a price floor and stabilize our total price. We are never using options for speculation.

We are farmers first and foremost. RA: Is a sophisticated financial business strategy going to be a necessity for independent farms and farmers to compete with corporate farming practices? SY: No, not for grain. Corporate and institutional investors own only a small share of the farms and the land. Absentee landlords and other landowners, including famers, own most of the land. Agribusinesses donâ&#x20AC;&#x2122;t need to own the land. They own all the input into the farms such as seed, chemicals, fertilizers, etc. On the production side, conglomerates own the off-take. They have the farmers coming and going. The global merger of agribusinesses is a problematic trend. Mergers reduce the leverage the farmer has against suppliers and purchasers. Owning the land is likely a liability for those companies at this point. They already have strong pricing power, and with every merger it gets stronger. RA: How is the strong U.S. dollar affecting pricing? SY: With a strong dollar, and everything else equal, our grain is more expensive than grain elsewhere in the world, and that will decrease demand for it. So buyers, say from Japan, may buy more grain from Brazil, since it is more economical. However, we are able to sell a consistent product. That is important to the buyer; it has value. Clearly, with all other factors equal, a strong dollar does make our product more expensive. RA

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Railway Age

October 2016

FINANCIAL DESK BOOK Directory 2017 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-of-service time.

ECN CAPITAL CORP. – RAIL FINANCE

150 N. Wacker Drive, Suite 2450, Chicago, IL 60606; Tel.: 312-982-8700; Harry Zander, Senior Vice President, Rail Finance, Email: hzander@ecncapitalcorp.com. Website: ecncapitalcorp.com. MAKING CAPITAL WORK. With total owned and managed assets of more than $8.5 billion, ECN Capital is one of North America’s leading commercial finance companies. ECN Capital operates across North America in three verticals of the equipment finance market – Rail Finance, Aviation Finance and Commercial & Vendor Finance. Our Rail Finance group has a longstanding track record of delivering tailored financing solutions for all types of rolling stock including tank and general freight railcars. As trusted advisors on complex transactions, we put our experience to work by adding value through our counsel as well as our capital.

PROGRESS RAIL, A CATERPILLAR COMPANY – EQUIPMENT LEASING

15173 North Road, Fenton, MI 48430; (810) 714-4626. Trent E. Marshall, VP Leasing. The largest lessor of maintenance-ofway 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 60 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. We develop leasing programs to cut equipment costs and provide 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. ARRANGERS

THE DAVID J. JOSEPH COMPANY

300 Pike Street, Cincinnati, Ohio 45202; Tel.: 513-419-6200; Fax: 513-419-6221; Trey W. Savage, VP Rail Group; Ryan Eckert, General Manager-Rail Equipment Group; Keith Kelsey, Jeff Schmutte, Jeff Blake and Eric Hausfeld, Regional Sales Managers; Dan Dorsey, General Manager-Private Fleet; Tom F. Pellington, Sr. Director Rail Equipment Services; Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502-212-7365). The David J. Joseph Company’s Rail Group provides a broad range of transportation services throughout North America: single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchases and sales of portfolios, and private

fleet management. Other services include freight car inspections and engineering services from design of new cars to complete ISL extended life, modifications and analysis; in addition to railcar dismantling for scrapping and parts reclamation.

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

480 West Dussel Dr., P.O. Box 119, Maumee, OH 43537; Fax: 419-891-2749; Rasesh Shah, President Rail Group, 419-8912958; 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.: 419-891-6687; 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.

AMERICAN RAILCAR INDUSTRIES, INC.

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.

October 2016 Railway Age 39

RAILROAD FINANCIAL DESKBOOK DIRECTORY 2017

LESSORS cont’d

ATEL LEASING CORPORATION

The Transamerica Pyramid, 600 Montgomery Street, San Francisco, CA 94111; Tel.: 415-616-3486; Ken Fosina, Executive Vice President, Email: kfosina@atel.com. Since 1977, ATEL has leased rail assets to America’s largest railroads and shippers. ATEL specializes in the leasing of all types of rail assets, including railcars, locomotives and maintenance-of-way equipment. ATEL targets railcars and locomotives built prior to 2005, but prefers new maintenance-of-way assets. Leases can be full service, but net leases are preferred. ATEL executes lease transactions directly and through its Capital Markets desk. Each year, ATEL’s Portfolio Management will sell rail assets from one of its Funds managing expiration.

CAI RAIL

Steuart Tower, One Market Plaza, 9th Floor, San Francisco, CA 94105, Tel: 415-788-0100; Fax: 415-788-3430. James H. Magee, Senior Vice President, email:jmagee@capps. com; Freddy Fernandez, Vice President-Operations, email:ffernandez@capps.com. CAI Rail is an operating lessor in the new and used railcar space. CAI performs full service, net, per diem and finance leases on all railcar types. We have complete maintenance, engineering, operations and field marketing staff. CAI also has companies in global container leasing as well as domestic and international intermodal logistics.

C.K. INDUSTRIES, INC.

P.O. Box 1029, Lake Zurich, IL 60047-1029; Tel: 847-550-1856; 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

Railway Age

October 2016

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

GREENBRIER LEASING COMPANY

One Centerpointe Drive, Suite 400, Lake Oswego, OR 97035; 800-343-7188; Fax: 503-968-4383; Email: Marketing.Info@ GBRX.com; Website: www.GBRX.com. Contacts: Larry Stanley, Vice President; Tom Jackson, Vice President, Marketing. GLC 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 nearly 10,000 railcars, 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 like-kind 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 [NYSE: GBX], headquartered in Lake Oswego, Ore., is the leading global integrated supplier of transportation equipment and services to the railroad and marine industries. We build new railroad freight cars in our five manufacturing facilities in the U.S., Mexico and Poland and marine barges at our Portland, Ore., deep water site. We are the market leader in the design and production of intermodal, boxcar, gondola, tank car and covered hopper railcars. Our customers include railroads, shippers and leasing companies— partners who depend on us for innovative design, quality production and on-time delivery. In Europe, we build and refurbish railroad freight wagons through our operation in Poland. In Brazil, GBX is the leading manufacturer of railcars for the Latin American market thorough our joint venture called Greenbrier-Maxion. GBX offers full repair and refurbishment services on all railcar types through our joint venture called GBW Railcar Services (GBW). GBW owns and operates the largest independent repair shop network in North America with more than 30 locations, including 12 tank car repair and maintenance facilities certified by the Association of American Railroads. GBX also sells reconditioned wheel sets and provides wheel services at 9 locations throughout the U.S. GBX manages GBSummit, a 50/50 joint venture with Sumitomo Corporation of Americas, where we provide finished and machined railcar axles. Finally, we perform management services for customers on approximately 270,000 railcars through our Greenbrier Management Services (GMS) group, which provides industryleading asset management and regulatory compliance through GMS’ new Regulatory Services Group.

RAILROAD FINANCIAL DESKBOOK DIRECTORY 2017

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 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.

MITSUI RAIL CAPITAL, LLC

One South Wacker Drive, Suite 3110, Chicago IL 60606 Phone: 312-803-8851: Dan Penovich, President; Chris Gerber, Vice President Sales and Marketing. Mitsui Rail Capital is a railcar operating lessor that offers some of the youngest railcars in our industry. From tank cars to covered hoppers to a wide variety of other car types, we deploy assets in every industry, including oil, gas, plastics, agriculture and steel. Our proactive approach enables us to know your unique needs and railcar requirements, getting well-structured deals done, faster. MRC has been in business for 20 years and is a joint venture between Mitsui & Co. Ltd. and JA Mitsui Leasing of Tokyo.

PROGRESS RAIL, A CATERPILLAR COMPANY – EQUIPMENT LEASING

15173 North Road, Fenton, MI 48430; (810) 714-4626. Trent E. Marshall, VP Leasing. 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 60 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. We develop leasing programs to cut equipment costs and provide 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.

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 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.

RALCO, LLC

200 S. Wacker Drive, Suite 3100, Chicago, IL 60606 tel:312674-4742; fax: 312-421-2742 RALCO is a privately held, Illinois Limited Liability Company in the business of acquiring, managing and leasing railroad rolling stock on net or full services leases. The Company has the intellectual and financial resources necessary to compete in the small cap lease market where its size and structure provide it with a competitive advantage. RALCO also provides consulting and advisory services to its clients. Contact: Peter Urban, Principal, Richard Johannes, Principal; Jason Urban, Principal.

RELCO LOCOMOTIVES, INC.

P.O. Box 83282, Baton Rouge, LA 70884. Tel.: 815-467-3030; 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.

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; Mark DePaul, Vice President Leasing – Northeast, (312) 559-4822; Kevin Wingate, Vice President Leasing – Central, (312) 559-4808; Jerry Finan, Vice President Leasing – Northwest, (312) 559-4820; Bill Ratcliff, Vice President Leasing – Southwest, (312) 559-4824; Jon Mudronja, Vice President Leasing – Midwest, (312) 559-4823; Glenn Tomalty, Vice President Leasing – Canada, (403) 984-8235. 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. October 2016 Railway Age 41

RAILROAD FINANCIAL DESKBOOK DIRECTORY 2017 LESSORS cont’d

TEALINC, LTD.

1606 Rosebud Creek Road, Forsyth, MT 59327; Tel.: 406-3475237; Fax: 406-347-5239; www.tealinc.com; Darell J. Luther, CEO, 406-347-5237 darell@tealinc.com; Julie Mink, President, 720-733-9922 julie@tealinc.com. Tealinc, Ltd. specializes in rail transportation solutions nationally and internationally. We are a rolling stock operating lessor and broker and we also provide marketing, transportation management and consulting services for car owners, shippers and suppliers within the rail industry. Our lease fleet consists of covered hoppers, open top hoppers, mill gondolas, flatcars, gondolas, etc. We have a combined 80 years of service and experience within the rail industry and have assisted both novice and experienced rail shippers best utilize the rail network they participate in.

TRINITY INDUSTRIES LEASING CO.

industry professionals is ready to listen to your needs and structure creative solutions to add value to your business. PROFESSIONAL SERVICES

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 that 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 more than 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.

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; Robert Pokorski, Sr. V.P., Fleet Maintenance; 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 76,440 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.

RAILSOLUTIONS, INC.

VTG RAIL INC.

PROGRESS RAIL EQUIPMENT LEASING

103 West Vandalia, Suite 200, Edwardsville, IL 62025. Randy Sycks, Regional Vice President Sales, 618-977-6769, Randy. Sycks@vtg.com. Lynn Hayungs, Regional Vice President, Sales, 956-630-2723 ext. 206, Lynn.Hayungs@vtg.com. VTG is a freight and tank railcar lessor offering net and full service operating leases and customer structured solutions for all of your railcar needs. VTG also provides fleet management services for its customers and for other private railcar owners and operators. VTG is a customer and service oriented leasing company that works to provide a best in class mix of service, operational and mechanical expertise and competitive rates and lease terms. VTG invests in all freight car types and ages.

Wells Fargo Rail

9377 W. Higgins Road, Suite 600, Rosemont, IL 60018; Telephone: 844-459-9664; Fax: 847-318-7588; Web: www. wellsfargorail.com; Email: RailAccountServices@wellsfargo.com. Wells Fargo Rail is the largest, most diverse rail equipment operating lessor in North America. Whatever you’re transporting, we’ve got you covered with more than 175,000 railcars and 1,800 locomotives. Our team of experienced rail 42

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October 2016

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. RailSolutions offers two publications on a subscription basis, The Investors’ Guide to Railroad Freight Cars and Locomotives and the RailSolutions Railroad Equipment Historical Database. Our firm draws on over 45 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

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 everchanging needs. Visit us on the web at www.progressrail. com/leasing.

People

Blechinger

Plasser

Meetings High profile Plasser American Corp. last month named Thomas Blechinger President. Blechinger succeeds Dr. Günther Oberlechner, who retired after a long and distinguished career at Plasser American spanning more than 40 years. Thomas Blechinger joined the railroad industry in Europe as an apprentice in 1991. Over the past 25 years, Blechinger served in various senior management positions, most recently as Vice President and General Manager.

The American Public Transportation Association (APTA) named Dallas Area Rapid Transit (DART) President and Executive Director Gary Thomas its Outstanding Public Transportation Manager of the Year. The Railway Engineering-Maintenance Suppliers Association (REMSA) inaugurated Whitmore Rail’s Bruce Wise as President, for a two-year term beginning Jan. 1, 2017. WSP | Parsons Brinckerhoff appointed Joseph Marie as Operations Manager of the firm’s Transit & Rail Technical excellence Center (TEC). In his new position, Marie will lead project delivery, strategic initiatives and talent development for transit and rail projects across the U.S. Dave Schumacher joins WSP | Parsons Brinckerhoff as a senior planning manager in the firm’s San Diego office, serving as project manager or lead planner on transit planning projects in Southern California. Richard Driggs becomes President of WSP | PB’s new Program Management sector, with responsibility for building a program management organization across all of the company’s markets in the U.S. and Latin America, including buildings, industrial and energy, environment and transportation. Salco Products, Inc hired Tom DeLafosse as Vice President of Engineering and Technical Consulting services. Canadian Pacific Executive Vice President and Chief Financial Officer Mark Erceg has resigned. Nadeem Velani

has been appointed interim Vice President and CFO. The Coal Institute honored New York Air Brake Senior Regional Sales Manager-Southeast U.S. Tim Carr with the Goodwyn Holmes Medallion. Red River Valley & Western appointed Daniel Zink to the newly created post of Vice President, Economic Development and Community Affairs of the 577-mile regional (Class II) railroad. HNTB named Joseph Rago, PE, CEM, LEED as Senior Project Manager and Associate Vice President in the firm’s Northeast Division rail and transit practice. He will be based in HNTB’s Newark, N.J. office. Danella Rental Systems named Matthew Harbison as a business development manager for the Western North America territory.

100 YEARS AGO in

OCTOBER 27, 1916 PASSENGER STATION SIZE There is no set rule by which the size of a station suitable for any town or city may be determined… On the opposite side of the general waiting room there should be a ticket and telegraph office, and baggage and express room…The station proper should have a general waiting room, and leading off from this a women’s retiring room, with toilet, and also a men’s smoking room and toilet.

October 10, 2016 Chicago Railroad Mechanical Golf Outing The Odyssey Country Club Chicago Contact: http://www.thecrma.org/

Oct. 27-28, 2016 Railway Age Energy by Rail Conference Key Bridge Marriott, Arlington, Va. Contact: conferences@sbpub.com; www.railwayage.com/energy

Nov. 1-2, 2016 18th Railroad Environmental Conference - RailTEC University of Illinois at UrbanaChampaign/Illini Union, Urbana, Il. Co-sponsored by The Association of American Railroads, American Railway Engineering & Maintenance of Way Association, American Short Line and Regional Railroad Association, American Railway Development Association, and the Railway Association of Canada. Contact: rrec-conf@illinois.edu.; http://railtec.illinois.edu/RREC/ overview.php

December 7-8 2016 Rolling Stock Fleet Maintenance Cost Reduction Congress 2016 Grange St.Paul’s Hotel, 10 Godliman Street, London Contact: http://www.rolling-stockmaintenance.com/ http://www.rolling-stockmaintenance.com/

December 15-16 2016 2016 Big Data in Railroad Engineering Conference University of Delaware Newark, Del. Contact: http://www.engr. udel.edu

October 2016 Railway Age 43

Products Saft launches IoT battery monitoring solution

Saft, launches C.O.M.M. Batt, its first ever Internet Of Things (IoT) service for nickel-based onboard batteries. The new service now enables rail operators to realize the

Take the

mystery out of light rail

planning Gain comprehensive insight into specialized technical and operating issues associated with light and interurban railways with Al Fazio’s invaluable new book. This must-have book will appeal to transportation professionals in planning, operations, civil engineering, signaling, and vehicle engineering as well as undergraduate and graduate students looking to enter these fields. You’ll benefit immensely from exploring New Jersey’s decades of light rail experience. Softcover. 136 pages.

$59.95

BKEPEO

Plus $11.99 S&H

The Railway Educational Bureau 1809 Capitol Ave., Omaha NE, 68102 www.RailwayEducationalBureau.com

800-228-9670

www.transalert.com 44

Railway Age

October 2016

benefits of predictive maintenance planning for their backup batteries based on remote, real-time monitoring, e.g., reduced downtime, optimized fleet management and the associated cost efficiencies. Saft has developed the C.O.M.M. Batt service as an innovative element within its global improvement program to further improve life-cycle costs (LCC) and maintenance intervals for its nickel-based batteries. C.O.M.M. Batt uses wireless technology to transmit a wealth of diagnostic data. This data is analyzed using Saft’s advanced modeling algorithms based on real-world knowledge drawn from a vast installed base to provide information on battery operation and charge condition as well as key predictive maintenance information. Operators can see a real-time picture of how their batteries are performing and can access this information on a PC or a smart phone and receive message alerts. C.O.M.M. Batt provides a basis for a transition to a predictive maintenance regime, rather than corrective and preventive maintenance. This yields other benefits such as lower maintenance costs and increased fleet availability. C.O.M.M. Batt represents a flexible philosophy that can be adapted to suit specific train equipment, communication protocols and operator maintenance workflows. www.saftbatteries.com

Schaefer Inc. Redundant and Dual Redundant Rack Systems for multiple apps Schaefer Inc. offers Redundant and Dual Redundant Rack Systems for mission critical applications where highreliability is essential, and loss of power difficult. Applications include but are not limited to CBTC, PTC, signals, controls, and substation emergency lighting. The Redundant and Dual Redundant Systems output power package ranges from 250W to 5,000W in one 19-inch chassis using Schaefer’s C500 to C4500 Series units (higher power systems available on request). Output voltages are 24, 48, 60, 100, 110, and 150VDC (additional DC voltages are available), and input voltages are 115/230VAC @ 50/60Hz single phase (3-phase AC and DC voltages available). Typical installation options include decoupling diode, DC-OK with relay, series diode (reverse polarity protection), current sharing/interrupt, inrush current limiting, increased mechanical strength, tropical protection, and extended operating temperature. Mechanical and electrical modifications to standard modules are available. In addition, Schaefer can custom design and manufacture. Contact: sales@schaeferpower.com.

Ad Index Company

Phone #

Fax

URL/Email address

Page #

Ameristar Perimeter Security USA, Inc. 918-879-6011

918-835-0899 allen.wright@assaabloy.com

CIT

212-461-5713

212-461-5694 abby.cohn@cit.com

Danella Rental Systems, Inc.

610-828-6200

610-828-2260

pbarents@danella .com

David J Joseph Company

513-419-6200

513-419-6221

txs@djj.com

ECN (Canada) Holdings Corp

312-982-8701

hzander@ecncapitalcorp.com

FreightCar America

312-928-0850

312-928-0890

tbaun@freightcar.net

LAT-LON, LLC

303-937-7406

303-531-5754

RKline@lat-lon.com

LTK Engineering Services

215-641-8826

215-542-7676

tfurmaniak@ltk.com

Miner Enterprises

630-232-3000

630-232-3055

sales@minerent.com

New York Air Brake

315-786-5431

315-786-5676

janice.pfeil@nyab.com

NRE

618-241-9270

618-242-8519 sales@nre.com

Plasser American Corp.

757-543-3526

757-494-7186

plasseramerican@plausa.com

Progress Rail Services

256-505-6402

256-505-6051

info@progressrail.com

RailSolutions, Inc.

757-903-4606

757-903-4705

jhusband@railsolutions.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

Ritron, Inc.

800-USA-1-USA

317-846-4978

sales-info@ritron.com

SMBC Rail Services LLC

312-559-4800

888-4RAILCAR

sales@signalcc.com

Soft Rail

888-872-4612

sales@signalcc.com

VTG Rail

773-254-9600

sales.northamerica@vtg.com

773-254-1110

26,44, C3

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

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

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

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

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

October 2016 Railway Age 45

equipment Sale/Leasing

Available For Lease ◆ Pressure Differential (PD) Covered Hopper Cars – 5,125 & 5,230 cu. ft., 286K GRL, operate at 14.7 psi. ◆ Pressure Differential (PD) Covered Hopper Cars – 3,915 cu. ft. capacity, operate at 14.7 psi. ◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides. For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail jgoodwin@mwrail.com www.carmathinc.com

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 4480 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks (1) Shuttlewagon SWX 630 Railcar Mover Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

products & services

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

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RFP NOTICES

Contract Solicitations

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

GLOBAL RAIL TENDERS

RFQ#: 137536 DUE DATE: November 22, 2016 TITLE: R34252/R34254 Purchase of 27 Refuse Flat Cars and Either 92 Flat Cars or 54 Flat Cars and 38 Flat Car Frames. Proposers shall furnish proposals with supporting documentation to be evaluated on the following criteria: 1) Technical Proposal and Approach 2) Overall Project Cost 3) Other Relevant Matters. For more information please access our website at http://web.mta.info/nyct/procure/rfppage.htm

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Turning Opportunities into New Business Get up-to-the-minute business intelligence by subscribing to GlobalRailTenders.com Powered by

October 2016 Railway Age 47

Perspective: Short Line & Regional Linda Darr

The November elections: What’s at stake for short lines

s I pen this article in September, the race for the White House is heating up, and we in Washington are preparing to work closely with transition teams now forming. Between now and then, we are anticipating an election path much like Mr. Toad’s Wild Ride at a Disney theme park. It is fair to say that one of the greatest frustrations with today’s politics is the seeming inability to get things done in Washington. This is the polar opposite of the railroad world. Shippers and railroaders spend every day making decisions. They study problems, they create solutions, and they implement those solutions. Far too often our government’s leaders study problems and talk about problems but cannot seem to get a solution to the finish line. The situation is particularly acute in a presidential election year when everything is subservient to the imperative of winning the election. Given the legislative gridlock, the short line industry is proud to have once again secured an extension of the 45G tax credit, this time through 2016. Unfortunately, it appears the Congress is done with short-term extensions and will move to make these short-term provisions permanent or discard them altogether. For short lines, permanency has become our most important legislative battle. A national election eliminates all pretense of governing in Washington D.C. Since the nation’s attention is now riveted on the election, let’s look at some likely outcomes. But don’t hold me to any of it because it’s a time like no other. The Congress most affects the short line industry. The PTC extension, the short line tax credit, truck size and weights, protecting the Staggers Act, 48

Railway Age October 2016

and transportation spending measures are mostly decided by Congress. The good news here is that the short line industry’s strongest allies in Congress seem likely to hold their seats. In the House of Representatives, Republicans hold 247 seats to the Democrats’ 188. It is the largest GOP majority since 1928. The Democrats need to win 30 seats to become the majority. Because gerrymandering has created so many safe districts, the current conventional wisdom is that there are only between 35 and 40

The short line industry’s strongest allies seem likely to hold their seats. competitive House races in the country. Of those, only 20 are currently considered true toss-ups. Given that math and barring a Clinton landslide, it is unlikely the Republicans will lose control of the House. The Senate is an altogether different story. Republicans control the Senate 54 to 46. Thirty-four seats are up in 2016. For control, Democrats need to win 4 seats if Clinton wins, as the Vice President breaks a tie, and 5 seats if Trump wins. There are 10 Senate seats that are most likely to flip. Nine of them are currently held by a Republican, and one, in Nevada, is currently held by a Democrat. There is considerable speculation how a win by either Clinton or Trump will impact these races. While the presidential race will no doubt have an impact, it

is not necessarily determinative. In the past 12 Presidential elections, going back to 1968, the party of the presidential winner lost seats in the Senate in six of those elections. Even in landslide years when Richard Nixon and Ronald Reagan won 49 states for their second terms, Republicans had a net loss of two Senate seats in each of those years. I have spent pretty much my entire career working on transportation issues in Washington. During that time, there have been Democratic and Republican Presidents and numerous changes in party control of the House and Senate. It would be simplistic and likely inaccurate to say that one political party has been better or worse for the railroad industry. As an example, Democrats are more likely to side with the railroads on that truck size and weight issue; Republicans more likely to side with the railroads on re-regulation. Contrary to popular opinion, the merits do make a difference. The railroad industry has a terrific story to tell. When told well, the outcome is successful, no matter which party is in power. On the strength of the railroad story, the House and Senate through many different Congresses has been compelled to enact the Short Line tax credit, oppose bigger trucks, resist calls to weaken the Staggers Act, and continue and grow Highway Trust Fund spending on grade crossing safety. In Washington D.C., ASLRRA is responsible for telling that story on behalf of short line and regional railroads. Those working in the railroad industry day in and day out are the ones writing the story. Their collective hard work and creative problem-solving have helped create an enormously successful industry that more often than not wins the day when decisions are made.

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

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

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

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Add Shipping & Handling if your merchandise subtotal is: U.S.A. CAN U.S.A. CAN UP TO $10.00 $4.50 $8.75 25.01 - 50.00 10.78 16.80 10.01 - 25.00 7.92 12.65 50.01 - 75.00 11.99 21.20

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