August 2017 Railway Age by Railway Age

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AILWAY GE S e r v i n g t h e r a i lway i n d u s t r y s i n c e 1 8 5 6

Combatting

Cold

Preparing for winter weatherâ&#x20AC;&#x2122;s wallop

High Performance Rail Why the rest of the world leaves the U.S. in the dust

Commodities: Industrial Products railwayage.com

Aggregate and sand top new railcar rollouts

August 2017 // Railway Age 1

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AUGUST 2017

12 FEATURES

Winter Preparedness

High-performance rail

33 38

How railroads combat the cold

How fast is fast enough?

Industrial products New cars for sand, aggregate

Railway Interchange 2017 Suppliers, railroaders join forces

DEPARTMENTS 4 6 8 40 40 40 41 42 43

Industry Indicators Industry Outlook Market People 100 Years Ago Meetings

NEWS/COLUMNS 2 10 15 44

From the Editor Update Watching Washington Short Line Perspective

Products Advertising Index Classified

On the Cover: Railroads are prepping now to keep rolling in winter. 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. 8. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-2219195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 1172, Skokie, IL 60076-8172, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital).

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August 2017 // Railway Age 1

FROM THE EDITOR

AILWAY GE Subscriptions: 800-895-4389

Letters From an Old Railroader

amuel Dunn, one of my early predecessors of this publication (which, by the way, you’ll notice we’ve redesigned), writes in the foreword of a book Simmons-Boardman published in 1912, Letters From an Old Railway Official to His Son, a General Manager: “One of the greatest problems of modern railway management is that of organization. Little railways have been combined into big ones; and big railways have been consolidated into big systems. To so organize these extensive systems that each division and each railway shall have enough individuality and autonomy to deal effectively and satisfactorily with the conditions and needs local to it, and at the same time bring about the correlation and unification of all parts of the entire system essential to the most efficient operation—this is one phase of the problem. To develop men able to skillfully administer departments having many and varied branches—this is another phase.” Does this sound familiar? More than a century later, the railroad industry is still dealing with the same concepts, and the same problems, Sam Dunn wrote about. Skimming through this book, looking for relevant quotes from author Charles DeLano Hine, what really struck me was something he said to his son, a newly installed railroad general

manager, about management: “Unfortunately, pride goeth before destruction. In the bivouac of the living, glory is a mighty unreliable sentinel. Let us hang up pride and glory as our Sunday-goto-meeting clothes. Let us don consistent practice and tenacious watchfulness for weekday wear. Let us cease to temporize with principle when such unmanly action seems easy and inexpensive. Nothing is so expensive ultimately as a violation of principle. A platitude, you say. So it is. [Theodore Roosevelt] has gained a great hold on the American people, at one time a stranglehold, by repeating platitudes over and over again. Great is the man who can measure the limitations of his fellows. Let us take a leaf from his book and repeat, reiterate, and reverberate the Ten Commandments, and the greatest of all commandments, the Golden Rule, alias the Square Deal. “Feudal barons of industry and commerce are breeding no successors because none are needed. Administration by system displaces administration by personal caprice. The scheme of progress now demands a higher type of corporation official, and he is being rapidly developed. Altruism, adaptability, consideration and courtesy are the more modern requirements.” More relevant today than in 1912?

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Industry Indicators Less is More for Railroads So Far in 2017 Less is more for North American railroads through the first half of 2017. While total employment at Class I operators has been mostly declining throughout the year, carload volume has increased steadily if not spectacularly—a positive sign for economic growth that’s helped fuel record revenue and earnings and pushed operating ratios to fresh lows. The outlook has also improved for carbuilders and suppliers of components (see p. 33). That’s welcome news, as the rail industry watches and waits to see what’s in store for businesses when Congress finally gets around to debating tax reform.

Railroad employment, Class I linehaul carriers, JUNE 2017 (% change from JUNE 2016)

Total employees: 148,627 % change from JUNE 2016: -2.49%

Transportation (train and engine)

60,096 (3.29%)

Executives, Officials, and Staff Assistants

8,699 (-6.32%)

Professional and Administrative

12,685 (-8.11%)

TRAFFIC ORIGINATED CARLOADS

FOUR WEEKS ENDING JUNE 1, 2017

MAJOR U.S. RAILROADS by Commodity

JUNE ’17

JUNE ’16

Grain Farm Products excluding 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

89,512 3,313 36,845 23,510 124,863 37,578 346,307 4,912 14,100 22,619 93,396 16,844 37,343 15,093 68,465 107,335 18,875 32,446 16,240 25,660

88,339 2,910 38,165 23,968 119,975 44,302 305,974 5,197 13,538 22,959 95,305 17,110 36,460 15,594 75,633 90,588 17,410 33,560 16,974 26,005

% CHANGE -0.1% 13.8% -3.5% -1.9% 4.1% -15.2% 13.2% -5.5% 4.2% -1.5% -2.0% -1.6% 2.4% -3.2% -9.5% 18.5% 8.4% -3.3% -4.3% -1.3%

1,065,976

1,020,802

4.4%

313,558

274,195

14.4%

1,379,534

1,718,877

6.5%

Total U.S. CarLoadS

CANADIAN RAILROADS ALL Commodities

COMBINED U.S./CANADA RR

Maintenance-of-Way and Structures

34,042 (-6.17%)

Maintenance of Equipment and Stores

27,300 (-4.98%)

Transportation (other than train & engine)

5,805 (-5.50%)

Source: Surface Transportation Board

Downsizing? right-sizing? All class I employment down except train and engine Total railroad employment at Class I’s in June continued its year-long descent, accelerating at a greater rate than in May. All sectors except Transportation (train and engine) showed a decline, led by Professional and Administrative, off by 8.11% from the same month in 2016. Conversely, train crews grew by 3.29%, which points to a number of factors including better carload traffic as well as operational changes such as shortening of crew pools resulting in higher demand for personnel.

4 Railway Age // August 2017

Intermodal

FOUR WEEKS ENDING JUNE 1, 2017

MAJOR U.S. RAILROADS by Commodity

JUNE ’17

JUNE ’16

% CHANGE

Trailers Containers TOTAL UNITS

94,113 1,019,462 1,113,575

88,174 975,976 1,064,150

4.5% 4.5% 4.6%

3,625 266,726 270,351

3,122 228,652 231,774

16.1% 16.7% 16.6%

97,738 1,286,188

91,296 1,204,628

7.1% 6.8%

1,383,926

1,295,924

6.8%

CANADIAN RAILROADS Trailers Containers TOTAL UNITS

COMBINED U.S./CANADA RR Trailers Containers

TOTAL COMBINED UNITS

Source: Monthly Railroad Traffic, Association of American Railroads

railwayage.com

TOTAL CARLOADS, 2017 VS. 2016

1,065,976

1,020,802

June 2017

June 2016

Short Line And Regional Traffic Index CARLOADS

by Commodity

ORIGINATED JUNE ’17

ORIGINATED JUNE ’16

% CHANGE

46,211 27,593 29,985 10,564 24,830 6,731 9,957 3,058 16,450 8,573 1,987 2,118 16,990 44,337 10,072 87,528

44,514 20,090 23,238 10,253 23,414 6,864 9,347 3,027 15,567 9,964 1,734 2,109 16,947 47,175 10,036 85,540

3.8% 37.3% 29.0% 3.0% 6.0% -1.9% 6.5% 1.0% 5.7% -14.0% 14.6% 0.4% 0.3% -6.0% 0.4% 2.3%

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 Trailers / Containers Waste & Nonferrous Scrap All Other Carloads

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U.S. TOTAL RAIL CARLOADS (six-WEEK MOVING AVERAGE) 360,000

340,000 2006 (peak year)

320,000

2015

300,000

2017

280,000

260,000 240,000 220,000

2016

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Data are six-week moving average originations, are not seasonally adjusted, do not include intermodal, and do not include the U.S. operations of CN and CP. Source: AAR

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August 2017 // Railway Age 5

Industry Outlook Batory Picked for FRA Chief

Railcar Orders and Backlog Increase Significantly in 2Q17 The Railway Supply Institute ARCI (American Railway Car Institute) Committee last month published its railcar industry order, delivery and backlog statistics for second-quarter 2017. Orders in the quarter improved sequentially to 17,665 cars from 4,814 cars in the first quarter. Deliveries of 10,625 railcars increased 5.8% from 10,042 railcars. The backlog now stands at 66,561 railcars, up 10.1% from the prior quarter’s level of 60,471 cars, and the first sequential increase in the backlog since fourth-quarter 2014—11 quarters. The industry book-to-bill came in at 1.7x, “significantly higher than last quarter’s figure of 0.5x,” noted KeyBanc Capital Markets Inc. Managing Director Steve Barger. “In the quarter, respective book-tobill for tank and non-tank activity was 2.0x and 1.6x, vs. 0.7x and 0.4x, respectively, in first-quarter 2017.” Order activity “largely outperformed 1Q17 trends,” Barger said. Non-tank car orders totaled 13,207 railcars in 2Q17, vs. 3,225 in 1Q17. Covered hoppers, which showed the largest concentration in orders, totaled 9,233, or 52% of the total orders, slightly below 1Q17’s 53%. Medium-cube 6 Railway Age // August 2017

covered hoppers represented the majority, at 5,515 cars, vs. 1,237 cars ordered in 1Q17. Orders for large-cube and small-cube covered hoppers were 994 and 2,724 cars, respectively, vs. 841 and 497, respectively, in 1Q17. Industry orders for tank cars totaled 4,458 vs. 1Q17 orders for 1,589 tanks. Together, tank and covered hoppers accounted for more than 77% of total orders in 2Q17 vs. 86% in 1Q17. 2Q17 deliveries of 10,625 railcars consisted of 2,209 tank cars and 8,416 nontank cars. 2Q17 tank deliveries increased about 6% sequentially. “We think current deliveries imply that the industry has approximately 6.3 quarters of tank backlog visibility,” Barger said. The industry backlog of 66,561 railcars “implies just over 6.0 quarters (18 months) of theoretical production visibility,” Barger said. “The tank backlog increased about 12% sequentially to 18,958. The non-tank backlog increased about 10% to 47,603, vs. the prior quarter’s 43,472. The backlog is trending toward a ‘normalized’ concentration of 28% tank, 29% small-cube covered hopper, 19% medium-cube covered hopper, and 10% large-cube covered hopper.”

President DONALD Trump’s nominee of Ronald L. Batory as the next Federal Railroad Administrator was favorably recommended to the full U.S. Senate by voice vote by the Committee on Science, Commerce and Transportation on Aug. 2. Batory retired March 31 as President and COO of Conrail, following a 46-year railroad operating career that included the presidency of the Belt Railway of Chicago and senior positions at Class I and regional railroads, including general manager in Chicago for Southern Pacific. He earned a bachelor’s in business from Adrian College and a master of arts from Eastern Michigan University. “Not since Canadian born Reginald Whitman was Administrator (19691970), following a 40-year career at Great Northern Railway (1929-1969), has there been one with as comprehensive a rail operating background as Batory,” notes Railway Age Capitol Hill Contributing Editor Frank N. Wilner. In his Senate confirmation hearing testimony, Batory said, “I recognize the Federal Railroad Administration has a multitude of responsibilities, but safety will always be the priority just as it has been throughout my career. Moving to performance-based rulemaking (see p. 6) will focus FRA’s efforts on getting the desired outcomes and safety improvements, not just on enforcement of rules and processes. I also believe it will breed innovative thinking to achieve goals and will facilitate the use of new technology.” “Batory is very good as an analyst at being able to say no to projects of questionable value or poor timing,” said Railway Age Contributing Editor Jim Blaze. “Details like that are what make commercial decisions great for the rail industry. Many managers don’t have that deliberative ability to know when to say no. If his nomination is approved, Ron Batory may well bring about a new, aggressive yet balanced approach to the FRA role.” railwayage.com

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Market R&N Hauling Ukraine-Bound Coal Reading & Northern Railroad is participating in a major coal move involving Xcoal Energy & Resources, which is exporting 700,000 tons of coal for energy production to Ukraine by the end of the year. The U.S. coal will replace Russian-origin coal at existing thermal power plants. Half the tonnage will consist of Pennsylvania anthracite shipped from mines served by R&N and sourced by Reading Anthracite Coal of Pottsville, Pa. R&N will be supplying all railcars, which will be configured in unit trains of 100 or more cars. Serving up to six loading points, R&N will hand off the trains to Norfolk Southern at its interchange in Reading, Pa., for delivery to CNX Terminal in Baltimore.

WORLDWIDE

NORTH AMERICA

RailRunner, the U.S.-based intermodal freight company, launched its first services in Europe on July 31 with the start of daily trains between Bratislava and Braunschweig. In the initial phase of operations, RailRunner is using conventional intermodal cars to carry craneable trailers, swap bodies and containers. However, in 2019 the company will introduce its Terminal Anywhere technology, which enables over-the-road trailers to be loaded onto RailRunner bogies, an operation that the company claims requires just two minutes.

The Connecticut Department Of Transportation (ConnDOT) awarded a $45 million, five-year contract to TASI/ACI, a joint venture of Herzog Transit Services subsidiary TransitAmerica Services Inc. and Alternate Concepts Inc., to operate and manage service on the CTrail Hartford Line. TASI/ACI will be responsible for train operations, station and parking facility maintenance and customer service functions. The Hartford Line, anticipated to launch in May 2018, will provide more frequent service between New Haven, Hartford and Springfield, and act as a regional link with connections to Metro-North, Shoreline East and Amtrak, which will remain responsible for maintenance. ConnDOT says 17 roundtrip trains between New Haven and Hartford will operate each weekday, with 12 of those continuing to Springfield. On weekends, 13 roundtrips will operate between New Haven and Hartford only. Lat-Lon has eliminated the monthly cellular service charge on the newest version of its Solar Tracking Unit by replacing the standard cellular modem with a LoRa

8 Railway Age // August 2017

(Long Range Radio) data modem. The LoRa Solar Tracking Unit (LoRa-STU) “has all the capabilities of its cellular-based product including, but not limited to, impact detection and temperature monitoring,” Lat-Lon said. “Fleet owners can significantly lower operating costs, and the same robust Lat-Lon website is used to review data, graphs and photos.” The LoRa can offload data collected during a trip to a gateway for no charge. “LoRa is a proprietary radio modulation technology,” explained Lat-Lon. “It is a low-power, lowcost, long-range wireless technology specifically designed for Internet of Things (IoT) applications. Data is communicated to a Low-Power Wide-Area Network (LPWAN), a network of gateways connected to the Internet. LPWAN requires less power than WAN (Wide Area Network) and has a low bit rate, ideal for small-packet transmission. It can be used to create a private network rather than leasing an existing network via modems with monthly/ annual operating costs. Communication is secure and bi-directional, using frequency hopping and variable data rates. LoRa is considered a compliment to M2M technology best used for low power operations.” railwayage.com

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Update Senate Surface Transportation Subcommittee Chairman Deb Fischer

Performance-based

safety standards?

egislation to improve rail safety through greater emphasis on freemarket forces of competition and innovation has been introduced by Senate Surface Transportation Subcommittee Chair Deb Fischer (R-Neb.).

The Railroad Advancement of Innovation and Leadership with Safety (RAILS) Act, S. 1451, would allow for performance-based safety standards in place of prescriptive regulation, and mandate that FRA rulemakings be based on data-driven sound science validated through transparent peer review. Performance-based safety standards mean rather than the FRA prescribing particular actions, such as mileage-based brake tests and specific operations and maintenance procedures, the FRA specify a safety outcome and allow each railroad to devise its own cost-effective means of achieving that target. An example is allowing trains to travel to destination without intermediate brake inspections if data validate that brakerelated failures are below 2%. Academics Jerry Ellig and Patrick McLaughlin, who examined performancebased standards in other high-risk industries, conclude that requiring the meeting of an objective rather than specifying how to arrive at a solution “encourages innovation 10 Railway Age // August 2017

and unique problem-solving that regulators may be less alert to than industry experts.” Rail technology expert Robert E. Gallamore, who helped design PTC, says prescriptive safety rules “are hard to enforce and may have unintended consequences. If actual safety performance is the benefit we seek, that end should be the judge of our means to achieve it.” Some two decades ago, former FRA Administrator Jolene Molitoris, a Democrat, promoted performance-based safety standards, as did Deborah Hersman, a Democrat, when NTSB chairman. Former FRA Administrator Joe Boardman, a Republican, warns of allowing data alone to drive decision-making: “Big data concepts still require analysis. Outcome based performance is what? Is it a derailment or miles traveled between derailments? Is it injuries or third-party losses? Or is it different for type of commodity carried?” Molitoris’s effort fizzled as management and labor alleged available data often was imprecise and unreliable. Fischer’s bill, however, specifies that sound science and transparent peer review validate all data. The RAILS bill also acknowledges that performance-based safety standards are not appropriate in all instances. For example,

many FRA prescriptive regulations follow congressionally imposed statutory requirements. Former FRA Associate Administrator for Safety Grady Cothen says many FRA rules already “focus on outcomes.” The AAR says it supports “a departure from prescriptive, command-and-control approach to rulemaking to one encouraging innovation with a focus on outcomes.” Innovative and customized approaches to safety improvements also could benefit small railroads burdened by meticulous regulatory prescriptions intended primarily for railroads employing tens of thousands. —Frank N. Wilner

Prescriptive safety rules are hard to enforce.” railwayage.com

Update

NCTD PTC RSD Under Way The Federal Railroad Administration (FRA) has authorized initiation of Revenue Service Demonstration (RSD) operations for Positive Train Control (PTC) on North County Transit District (NCTD) Coaster trains, including revenue (passenger-carry-

ing) trains, on the San Diego subdivision. “RSD is an important step in implementation of PTC as it allows NCTD to collect and validate data on the performance of our PTC system,” NCTD said. “This testing supports the PTC Safety Plan that NCTD anticipates

submitting to the FRA in September 2017.” NCTD’s PTC system has been tested for several months on a non-revenue train in the Stuart Mesa Rail facility and along the Coastal Corridor. This testing “was aimed at developing and enhancing the PTC infrastructure while troubleshooting any potential challenges prior to moving to RSD,” the agency said. NCTD informed Coaster riders that “despite robust testing, during this period of RSD, Coaster passengers may experience delays at origin locations (Oceanside Transit Center or Santa Fe Depot) when trains are initializing the system. “The trains could also come to a brief stop based on PTC automatically applying the brakes. “While there are challenges to implementing any new technology, the long-term benefits of having PTC is increased safety on the rail. NCTD, its rail partners, and its contractors will continue to work diligently to minimize the impacts of PTC implementation on customers.”

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Update Filing Asks STB to Reject Chicago Rail Freight Bypass Opposition groups from Wisconsin, Illinois and Indiana have asked the STB to reject an application from Great Lakes Basin Transportation to build a rail freight line around Chicago because there is no proof of funding and railroads committed to use it. “The application should be rejected for failure to have provided essential evidence,” Chicago attorney Thomas McFarland wrote in a filing with the STB on July 10. The board is considering GLBT’s application for a new 261-mile line from Milton, Wisc., to LaPorte County, Ind., which would bypass congestion in Chicago. Opponents of the privately funded, $2.8 billion project have raised concerns ranging from loss of farmland to safety problems and drainage issues. Mike Blaszak, attorney for Great Lakes Basin Transportation, told the Chicago Tribune that the company would respond to the filing, but had no immediate comment. Great Lakes applied to the STB in early

May, and followed up with more filings with requested information about its shareholders and balance sheet. The company’s primary stockholder is founder and chairman Frank Patton, who previously was in the financial software business. The groups in their filing are protesting the fact that Great Lakes said it would arrange funding and customers once the STB approved the project. “That is the exact opposite of the board’s process for track construction,” McFarland wrote. “… [T]here must be evidence at the outset of ability to fully fund a track construction, and of the likelihood that rail carriers and shippers will make use of the rail line. There is no such evidence in GLBT’s application.” Great Lakes has yet to enter into any service agreements with the six Class I railroads it would serve, McFarland said in the filing. “Thus, as in the matter of financial fitness, there is no evidence whatsoever in the application of a public need or demand for the

rail line proposed by GLBT,” the filing states. The STB has yet to respond to Great Lakes’ additional filings for its application, or rule on the application itself. Great Lakes officials asked the STB to halt an environmental impact statement on the proposal earlier this year until the application was filed. That remains on hold.

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August 2017 // Railway Age 13

Update

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14 Railway Age // August 2017

Rail Systems Engineering Operations Planning and Simulation

Improvements to system performance continue, and Rio Tinto anticipates 100% of its network will be fully driverless by the end of 2018. Rio Tinto adds that, when completed and fully operational, AutoHaul will be the world’s first fully autonomous, heavy-haul, long-distance freight railroad. Rio Tinto first floated the concept in 2008, but had previously reported a number of delays in implementing the technology. The company is investing in automation and other improvements to its heavy-haul lines in the Pilbara region so that it can increase capacity without the need to purchase additional rolling stock. AutoHaul is part of Rio Tinto’s Mine of the Future project, launched in 2008. The project also includes autonomous trucks and drilling. Testing of AutoHaul started in 2014, and throughout 2015, AutoHaul-fitted locomotives were tested on the network to evaluate onboard systems, signaling, safety mechanisms and communications with the Rio Tinto operations center in Perth. The center enables all the company’s mines, ports and railroad systems to be operated from a single location. Ansaldo STS won a $294.7 million contract for development and delivery of AutoHaul’s automated train management system in 2012. The contract included supply of a vital safety server for “safe and flexible management of train movements and an on-board driving module.” The system utilizes existing wayside infrastructure installed under a contract awarded under RAFA (Rio Tinto-Ansaldo STS Framework Agreement) in 2010. Rio Tinto has also invested in updated locomotive control systems that allow the introduction of ECP (electronically controlled pneumatic) braking. Ansaldo STS was awarded a $48.16 million contract under RAFA in July 2012 to outfit the railroad’s GE Transportation locomotives. Releasing its second-quarter 2017 production results, the Rio Tinto says its Pilbara iron ore shipments reached 77.7 million tons in the second quarter, despite being impacted by an increase in its track maintenance program following poor weather conditions in the first quarter. Total volumes for 2017 are forecast to reach around 330 million tons, which takes into consideration first-half production and the additional track maintenance. railwayage.com

Watching Washington

Who is John Galt?

ree-market philosopher Ayn Rand, an émigré from the economic horrors of the command-and-control Soviet Union, was celebrated as the Reagan Administration’s “novelist laureate.” Alan Greenspan, who served as Federal Reserve chairman to four U.S. Presidents (19872006), is a Rand disciple. House Speaker Paul Ryan requires his staff to read her books. President Trump named Rand his “favorite” author. Rand’s epic novel, Atlas Shrugged— published in 1957 and which motivated support for partial railroad economic deregulation in 1980—still sells some 200,000 copies annually and reflects the thinking of many in the Trump Administration. Secretary of State and former ExxonMobil CEO Rex Tillerson speaks glowingly of it. Enter into this environment the Trumpchosen Republican nominees soon to control rail regulatory agencies. If not already fellow travelers with Rand, they can expect coercion to favor her free-market philosophy by which forces of supply and demand are largely immune from government intervention. Hark the plot of Atlas Shrugged, a railroad yarn in which the innovative “makers” of wealth go on strike against welfarestate “takers” in quest of an unfettered free-market economy protecting privateproperty rights. A similar result appears an ambition of Trump adviser Stephen K. Bannon, who advocates destruction of the

200,000

COPIES

OF ATLAS SHRUGGED ARE

STILL SOLD ANNUALLY

railwayage.com

administrative state. Federal agencies already are under White House directive to examine aggressively for repeal of existing regulations. Thus anticipate, from the Federal Railroad Administration (FRA), National Mediation Board (NMB), Pipeline and Hazardous Materials Safety Administration (PHMSA), and Surface Transportation Board (STB), measures disquieting to those inflexibly assuming government to be a first, last and always problem solver. For example, expect from the FRA, in concert with the PHMSA, a rejection of command-and-control safety regulation in favor of innovation-tapping performancebased safety standards (see p. 10). Likely headed for the regulatory dustbin are Emergency Orders and rulemakings either unsupported by data-driven sound science, lacking transparent peer review and/or failing benefit-cost analysis. All such norms were wickedly absent in recent discredited attempts to mandate minimum train-crew size and electronically controlled pneumatic (ECP) brakes. The NMB may soon reform a unique binding-arbitration system encouraging union leaders to file thousands of publicpurse-siphoning grievances for which labor and management bear no cost responsibility. While the Railway Labor Act (RLA) prohibits work stoppages over such so-called minor disputes of contract interpretation and contested discipline, airlines and their unionized employees, similarly covered by the RLA, share the costs of binding arbitration—a monetary constraint on indiscriminate actions of both parties. Awaiting arrival of a Republican majority at the STB are two cases with significant free-market implications. One is whether to grant a shipper request for so-called competitive switching—requiring that, at certain points and under certain conditions, a sole-serving railroad carry traffic to an interchange for transfer to a competing railroad. Also upcoming is whether to limit rail rate increases when railroads meet an STB established profitability test, also under review.

federal agencies are aggressively examining repeal of regulations.” Atlas Shrugged fans will recall a drumbeat question, “Who is John Galt?” that peppers its 1,168 pages. Galt is the book’s gifted antagonist who persuades society’s creative leaders to withhold their inventiveness, vision and capital in protest against a government increasingly practicing a transfer of wealth from those with the greatest ability to those with the greatest need. “Who is John Galt?” will not soon decorate banners attached to entryways of railroad regulatory agencies. The book, after all, is a novel. Nor is there indication that Trump nominees are dystopians predisposed to burning down the village. Indeed, laws remain in place defining the limits of regulators. Still, this Administration is devoted to regulatory relief. The reality is that parties petitioning for government-imposed solutions recognize the question, “Who is John Galt?” as an expression of frustration with the government leviathan and its swelling limits on economic liberty. Petitioners wishing to prevail in this new order had best craft a convincing theory supported by credible data.

FRANK N. WILNER Contributing Editor August 2017 // Railway Age 15

Financial Edge

Rudderless Rail Economy Continues Trek

ndustry watchers spend a fair bit of time trying to take economic data and translate it into future carloads and railcar deliveries. Recent economic data continues to confound watchers who, several years into an economic downturn (railcar-wise), struggle to reconcile growth in the broad economy with the weakness in railcar and carload data. There are some high expectations for second-quarter RSI new car orders. After a first-quarter pop of 4,800 orders, many people are expecting an even higher 2Q2017 number. A slight pop in orders is not a trend. The question about the rail market remains unanswered: Is it strengthening, weakening or trending level? Eric Starks, Chairman and CEO of FTR Transportation Intelligence (and perennial Rail Equipment Finance speaker), is an industry maven piecing all this together to pave the path forward. I caught up with Eric and peppered him with a few questions about the direction of the rail economy.

RA: The Institute for Supply Managment’s Purchasing Manager’s Index (PMI)of manufacturing activity is at the highest level since June 2014. The retail economy seems very healthy. What about the rail economy? Starks: Data suggests that there is manufacturing and factory expansion. However, it is at modest levels; it is inconsistent and very sector-driven. Retail growth has been so-so, but there is no real strength there. Base manufacturing data says the economy looks a little weaker (and the Fed suggests some contraction while the ISM sees expansion) right now. Railcar loading data has been rather flat. Although the Y-O-Y numbers look good, vs. the baseline the numbers look pretty flat. In rail, other than intermodal, there really has been little expansion. We are seeing an expansion in truck freight. RA: Earlier in the year, you were suggesting an increase in inventories would drive an increase in manufacturing spending. Has that occurred and do you see a 16 Railway Age // August 2017

manufacturing slowdown on the horizon? Starks: There has been a little turn. Companies are willing to add more inventory, but the result is that inventories may not really be right sized; they may be too high. That is a short-term benefit, but it is not good in the long term, especially for transportation. We struggle to find that optimal balance to drive demand for rail transportation. RA: Inflation also seems to have stalled. Starks: Yes, there is really no inflationary pressure and no wage pressure and no momentum for either right now. I think the downside is a little overstated, but I am not seeing improvement there. RA: What about construction spending. That seems to have stalled. Should we be concerned? Starks: We had seen some growth in multi-family homes. But there was a slowdown in the building of office space and hotels. We still have an inventory hangover from the Great Recession. Spending on oil and gas was masking part of that. So there was infrastructure spending, but it was all mainly focused in one industry. It wasn’t false growth, but it gave the sense that growth was stronger than reality. We are seeing that again. There was strong growth in 1Q2017, but it was all in oil and gas. Construction has room for improvement. RA: The dollar has been weakening. Does that change the perspective on U.S. exports and railcar loadings? Starks: It will take some time for momentum to build behind exports. There is significant global competition, and at the outset, global economic weakness limits end market potential. There is some growth in Europe, but overall growth is limited. The currency move isn’t enough to change the equation on price for most commodities. For example, there is a global glut of grain. A currency price improvement of 2% just does not move the needle enough to cause an impact.

We feel [that railcar] deliveries in 2017 are probably too high.” RA: Demand for sand for frac drilling seems to have caused some increase in the placement of new car orders. What are you hearing about the railcar order pace for the remainder of 2017 and 2018? Starks: We see deliveries for 2017 in the low 40s and toward the mid to high 40s for 2018. We feel deliveries in 2017 are probably too high, and that will have a short-term impact. Going forward, we see compartmentalized growth in markets like sand and plastics. Autos are slowing down. There is some intermodal traffic growth that might cause some orders to occur. The replacement cycle, with scrap at the mid $200s per ton, hasn’t occurred. The scrapping of cars is below historical averages. There is also a cloud over trade and what might happen there. That is hampering activity generally. The majority favors global trade over isolation, but that remains a big unknown. Great information, as always from Eric Starks. Got questions? Set them free at dnahass@railfin.com.

DAVID NAHASS President Railroad Financial Corp. railwayage.com

SPEcial Advertising Section

New Tech, New services, New opportunities

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at Railway Interchange 2017

A worldwide audience of nearly 9,500 industry professionals will travel to Railway Interchange 2017, Sept. 17-20 at the Indiana Convention Center in Indianapolis, the largest combined railway industry exhibition and technical conference in North America. railwayage.com

Railway Interchange showcases the newest technology, services, and research by the Railway Supply Institute, the Railway Engineering-Maintenance Suppliers Association, and Railway Systems Suppliers, Inc. , across 300,000 square feet of exhibit space. The must-attend event also features technical presentations and discussions by the American Railway Engineering and Maintenance-of-Way Association (AREMA) and the Coordinated Mechanical Associations(CMA), and includes numerous networking opportunities. August 2017 // Railway Age 17

SPEcial Advertising Section Greenbrier Debuts Dura-Max Hopper

The Greenbrier Companies began as a boxcar and intermodal railcar builder. Over time, the pioneering manufacturer located along the Willamette River in Portland, Oregon has continually added new railcar designs to its portfolio. Today, with decades of experience and an enviable reputation for quality, Greenbrier’s North American railcar product portfolio includes more than 40 designs. This broad line of freight railcars form the core of Greenbrier’s Integrated Railcar Solutions offering of products and services. Greenbrier meticulously studies markets before creating a new railcar. Even mature transportation markets, like those that facilitate the movement of industrial minerals, have nuances that must be considered before railcar engineering begins. Certain non-metallic minerals are corrosive to some grades of steel; arrangement of bottom outlets must match unloading conveyor systems, and, as with everything in the transportation industry, operator safety and ergonomics must be prioritized. Railcars are a long-life asset that Greenbrier believes must meet demanding operating conditions with 18 Railway Age // August 2017

designed-in durability and performance. Greenbrier’s engineering expertise is the product of years of experience as an industry innovator. In addition to devoting time to get the engineering right for a new market, Greenbrier doesn’t create new designs in a vacuum. Regardless of the fleet ownership structure,

The all-steel Dura-Max open top hopper is engineered to meet the challenges of the growing aggregate market.

Greenbrier’s new railcar market teams actively seek feedback directly from the operators of rail equipment. Designing railcars to add value, save time, maximize efficiency and improve safety drives Greenbrier’s continuous improvement efforts. As construction activity ramps across America to rebuild infrastructure,

railcars and other heavy equipment will be tested for endurance and reliability. Operating conditions are always changing, and products in the field must continuously adapt to meet evolving conditions. For the aggregate market, customer feedback indicated that new railcars had to be engineered chiefly to maximize throughput and resist corrosion. Greenbrier engineered the new Dura-Max Open Top Hopper with these factors in mind. The pneumatic gate system expedites unloading while also allowing for manual override to control flow rates. The innovative Activation Console gives operators complete control at the touch of a button. Six durable doors can be opened individually, in pairs, or all simultaneously. With an allsteel body, the 45-foot Dura-Max rides on a hard-working frame and rugged through sill. The crossover platform improves loading efficiency while optimizing operator safety. Thoughtful design and quality construction are just the beginning of Greenbrier’s Integrated Railcar Solutions. Once a railcar rolls off the production line, Greenbrier ensures high quality customer support, mile after mile. From repair, wheels and parts services to full-service term leasing and fleet management services, Greenbrier can meet all freight railcar needs for fleet owners and operators. This summer, Greenbrier began production of its inaugural line of Dura-Max Open Top Hoppers, ready to deliver a railcar that meets and exceeds the challenges of modern railroading. Greenbrier is confident that investment in America’s infrastructure will drive demand for railcars shipping aggregate for years to come. As long as aggregate moves by rail, the Greenbrier team will build railcars that establish the standard for value in equipment used by shippers. railwayage.com

SPEcial Advertising Section CTE Rail: Your One Source for Rail-Trucks and MOW

CTE Rail, a division of Custom Truck & Equipment, a Utility One Source Company (A Blackstone Company), started out in April, 2014 with a workforce of 17. Managing Director of the Rail Division, Bryan Boehm, a prominent figure in the industry with over 25 years of experience, was charged by Custom Truck & Equipment with the task of developing the company’s footprint within the Rail industry. Just 3-1/2 years later, under Boehm’s leadership, the division’s workforce has almost tripled to 60 employees, become a market leader in the Hi-Rail vehicle and fleet segments, and entered the Maintenance of Way (MOW) marketplace. Such growth stands as a testament to CTE Rail’s process-driven approach to providing the right solutions for its customers. CTE Rail offers railroads and contractors a single source for their new/used trucks, equipment, parts and service needs. Whether a stock 20 Railway Age // August 2017

truck from one of their 17 Fast Track Pool specs or an entirely custom piece, CTE Rail can deliver. CTE Rail offers an extensive rental fleet of quality trucks, with daily, weekly, or monthly rental options, at most of its 24 branches nationwide. Each rental is equipped with an onboard diagnostics tool, which allows CTE to: 1) Monitor the condition of the truck year-round; 2) Act accordingly before a simple issue becomes a much larger problem, and, 3) Offers customers peace of mind, knowing they are in capable hands. Each branch provides quick turnaround service, increasing vehicle uptime. Can’t make it to a branch? CTE Rail employs a network of mobile service technicians to provide assistance on-location. A 24-hour call center is staffed by knowledgable representatives who can help trou-

bleshoot CTE Rail products. The company’s rail division also operates a parts distribution warehouse in Ft. Worth, Texas, which carries over $1 million in on-hand inventory, for speedy order turnaround. CTE Rail can provide most replacement parts for every major brand of railgear and associated equipment found on rail trucks, from hose reels to LED lighting, and many other accessories and components. They can be reached nationwide by calling 844-CTE-RAIL. Custom Truck & Equipment is also proud to announce its expansion into the railroad Maintenance of Way (MOW) marketplace. Longtime railroader Danny Brown has joined CTE Rail’s team and will lead its new MOW equipment division. Director Bryan Boehm said, “Throughout his more than 20-year career, Danny has held managerial and executive positions with varying well-known and respected rail companies, and as the new Senior MOW Director, brings his extensive knowledge and expertise of the MOW Market to CTE Rail’s team.” CTE Rail has also acquired key assets of Brown Rail, LLC, and in the very near future will begin leasing, renting, and selling MOW equipment alongside their trucks. This venture into MOW now enables CTE Rail to cater to its customers’ needs in a capacity unmatched throughout the industry. For parts, trucks, or MOW equipment, CTE provides the right solution for its customers.

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SPEcial Advertising Section Superior Roadway Worker Protection ZoneGuard, Miller Ingenuity’s electronic roadway worker protection system puts safety directly into the hands of the worker. We engineered our patent pending system to coincide with existing safety rules and exceed FRA safety recommendations and regulations. ZoneGuard consists of portable or fixed (permanently installed) Train Detection Modules, Train Alert Modules, and Worker Wearable Devices. The system’s modules are set up to create a robust communication network that is triggered once a track vehicle is detected approaching an on-track worker or work crew. Once a track vehicle is detected, the RWIC and crew members are alerted of an approaching train via their personal worker wearable devices and they

22 Railway Age // August 2017

can remove themselves from the work zone within safe clearing times. The train detection and communication network architecture provide highly accurate warning times when detecting track vehicles, eliminating costly false alerts commonly found in similar systems in the industry. ZoneGuard has been successfully tested in challenging scenarios including through long curves, highnoise urban environments, multiple track detection and even directly under high power lines. No on-board equipment is required for operation.

everyone’s been talking about. Schedule your demo with us today or visit Miller Ingenuity at Railway Interchange, booth #3579. Stop by for an interactive Virtual Reality demo!

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FinRail AILWAY GE finance summit

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FinRail 2017 offers vital info on: • Federal, state and local funding mechanisms • Raising private dollars • Working within the design-build-operate model • Class I, II, III and S&T cooperation • Working with 3PLs • The regulatory framework • Interfacing with trucking and marine modes

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Class 1 Focus: winter prep CN

Through Snow, Cold and Rain What railroads are doing and buying now to prepare for the winter ahead. By Bruce E. Kelly, Contributing Editor

24 Railway Age // August 2017

railwayage.com

Bruce Kelly

f the upcoming winter plays out anything like the last, railroads across much of North America have their work cut out for them. From December 2016 through March 2017, deep snow and bitter cold impacted operations from coast to coast. Railroads that operate in winterimpacted regions conduct preparations year-around. BNSF spokesman Ross Lane says, “Each BNSF Operating Division will evaluate their action plans to ensure that resources and procedures are in place to address extreme conditions. The Montana Division will continue to pre-stage necessary equipment, and employ proactive measures such as weather forecasting, operational restrictions and avalanche mitigation.” As well, “Adding capacity and CTC in key locations, replacing rail, and continuing to perform necessary maintenance ensures our railroad is able to respond to unique and challenging weather conditions.” One of the more frequently impacted areas during winter is BNSF’s main line along Puget Sound. BNSF spokesman Gus Melonas says the number of interruptions last winter “wasn’t as significant as it could have been” thanks in part to recently constructed retaining and catchment walls in slide-prone areas between Mukilteo and Everett, Wash. “We’ve been monitoring slides here since 1914, and there have been more than 1,000 we consider of significance.” he says. “That’s why we have crews ready and material and equipment staged to respond around the clock to remove debris and keep trains moving. Ditching and culvert enhancement are also critical for appropriate water flow, as water will control us if we don’t control it.”

railwayage.com

The Supplier Side In December 2016, Edmonton, Alta.based CCI Thermal Technologies acquired the switch heating and snow removal assets of Gloucester, Ont.-based Hovey Industries, known for its gas-fired hot-air switch heaters and related tie ducts and hardware. CCI CEO Bernard Moore said, “The acquisition of Hovey’s HELLFIRE and INFERNO product lines enables us to offer the most comprehensive line of ice and snow removal

winter prep products.” The combined CCI/Hovey switch heater catalog is now handled under the Fastrax name, which also sells the electric-powered line of SwitchBlade flat-profile switch heaters. Hotstart Inc. of Spokane, Wash., celebrating its 75th anniversary this year, manufactures engine heater systems and thermal battery wraps. Its line of locomotive products includes an Auxiliary Power Unit (APU) that runs off the locomotive’s fuel supply (eliminating the need for external power connection), consuming less than half a gallon of diesel per hour while keeping primemover coolant heated at 90-120 degrees F. Hotstart also produces locomotive pre-heaters powered by on-site electricity, as well as electric-powered battery wraps designed to “maintain optimum cold cranking amps” on heavy equipment and trucks. Jason Barnes, Senior Marketing Manager-Railroads, says, “Our most recent design allows for our electric heating systems to be purchased in component form. The control box is decoupled from the heating tanks and can be installed closer to the operator area for better access. The heating tanks, either in a single fluid or dual fluid configuration, can be installed closer to the prime-mover, optimizing water and oil heating and circulation.” Buffalo, N.Y.-based Power Drives, Inc., which recently marked its 70th year, makes PowerHouse engine preheat/idle-reduction systems. Marketing Manager Rosanne Panzica tells Railway Age that during 2016-17, PDI “achieved significant sales in our traditional North American regions of the Northern Rocky Mountains, the Plains region, and Canada.” Watco subsidiary Kansas & Oklahoma Railroad recently completed its order for 34 PDI APUs, followed by another 38 APUs for Watco’s Wisconsin & Southern in early 2017. Genesee & Wyoming-Canada purchased several 120-volt, plug-in versions for properties in Ontario and Quebec. The PowerHouse 120 model has a 137,000 BTU output and is capable of keeping locomotive coolant between 90 and 150 degrees. This unit is powered by ordinary household electric current. PDI uses a direct-fired diesel burner that is August 2017 // Railway Age 25

Class 1 Focus: winter prep CN

electrically powered and only draws 5 amps, which it claims is more efficient than induction-style heating. The PowerHouse APU model is powered by a 9.5-hp diesel engine and is a complete stand-alone system that does not require shore power. It’s designed with two modules, allowing the engine

and heater modules to be mounted up to 15 feet apart, thus enabling installation in tight locations. PDI says the APU model runs only when needed, “maximizing fuel savings while minimizing wet-stacking, emissions, noise, and engine wear.” Both of PDI’s PowerHouse models can be remotely

monitored from a computer or cellphone. Spectrum Inc. of Brooklyn Heights, Ohio, produces an all-electric line of switch and track heaters. The company says, “By focusing on electric solutions, Spectrum is able to deliver the ultimate in products that are safe, reliable, and cost effective.” Its FlatJacket Snow Melter, available in lengths up to 34 feet with no splice, provides moisture resistance through its chemically-treated magnesium oxide construction. Its flat profile “gives you greater contact with the rail. Therefore, thermal transfer is significantly improved over the round rod technology.” Spectrum’s RRSH Hot/Cold Air Blower is available in 3-hp (19.5-kw) and 5 hp (45-kw) models powered by 240, 480 or 600 VAC. It can operate remotely, manually, or in conjunction with a track-level snow/ precipitation sensor. Power plants and export terminals that handle coal in winter conditions should take note of Spectrum’s Coal Car Thaw Shed Heating Systems, with heat modules offered in two sizes for on-track mounting.

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Winter prep Spectrum says the electric, all-aluminum construction “does not rust or corrode and has a life expectancy of 25-35 years.” Earlier this year, the MBTA’s Bostonbased commuter rail system had contracted for installation of gas-powered hot-air switch heaters and fiberglass switch covers from Railway Equipment Company. In December 2016, RECo debuted an improved switch heater design. “Our newest switch heater is a complete unit, easier to operate and troubleshoot, RECo said. Fault detection and temperature control have been combined in a simple, reliable and affordable package.” Switch heaters and other lineside components can be monitored thousands of miles away using RECo’s RailNet Remote Asset Management system. Modernizing a Classic When snow accumulation over tracks gets measured in feet rather than inches, and it’s wet or densely packed and beyond the capabilities of a wedge plow or spreader, it’s time to bring out the biggest tool in

the winter arsenal: the rotary snowplow. Most of the rotaries currently on standby in the Western U.S. and around the globe date back to the steam era. Keeping these machines functional into the 21st century requires mechanical know-how combined with new technology. A control module that’s designed to upgrade locomotive performance was tested earlier this year in snowplow service, with considerable success. Minneapolis-based ZTR Control Systems tells Railway Age, “A Class I started a pilot project with ZTR to modernize an older 1950s-style rotary snowplow. It used to require two engineers to operate the snowplow via rheostats, one controlling blade rotational speed and the other controlling ground speed. Our NEXSYS III-i module allowed a single engineer to monitor operational parameters like ground speed, blade rotational speed, tractive effort on an easy-to-see display panel.” The first fully operational run for this system occurred in February, where the rotary snowplow was used to cut back banks

on a mountain pass. The crew was able to run the plow at speeds exceeding 5 mph while plowing. For a good portion of the pass, it was maintaining close to 10 mph, far exceeding the 2 mph operating speed with the previous control system. ZTR’s customer, we believe, is Union Pacific, based on a statement it released in February: “A rotary snowplow was in full operation...during the third-snowiest winter in the Sierras in recorded history. The plow cut through snow that reached depths of 13 feet across 14 miles near Donner Pass.” In 2012, UP performed “the first major makeover in more than 60 years” on one of its three rotaries, “enhancing its productivity, reliability, and power. We plan to enhance another rotary plow in 2017.” ZTR also produces the SmartStart IIe AESS (automatic engine start/stop) system, which maintains prime-mover temperature without continuous idling. And its KickStart battery support module provides easier cold weather starts while minimizing drain on locomotive batteries.

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HSR

Pockets of

Progress

By WILLIAM C. VANTUONO, Editor-in-Chief

High-speed rail in North America? We’ll get there—possibly.

igh-speed rail. Higherspeed rail. High-performance rail. Bullet trains. While the rest of the developed world presses forward, investing in state-of-the-art steelwheeled fast trains on state-of-the-art steel railways, the U.S., and to some extent Canada, can’t seem to decide what to do about, much less what to call, this form of transportation that has taken the world by storm in the past 35 years (53, if you go back to Japan’s first Shinkansen). Forget maglev. Forget Hyperloop. Both are good ideas deserving of further investigation, but we don’t need them. It’s hard enough dealing with those who lack vision and are clueless as to the value of steel wheels rolling safely at tremendous speeds on vast ribbons of steel rail. These are the people who want to keep this country’s passenger rail system stuck in the mid-20th century, while the rest of the developed world laughs, looking at us out the windows of 200-mph

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trains. They know who they are, and they just don’t get it. They probably never will. Back in 2009, President Obama, with lifetime passenger rail supporter (and regular Amtrak customer) Vice President Joe Biden at his side, had high-speed advocates in this country dancing for joy. It seemed as though, finally, something tangible was going to happen. But even though the concept was good, the execution was poor. The President had earmarked about $8 billion in funds tied to economic recovery, more money than anyone had ever seen coming from Washington in one shot. Pent-up demand for HSR exploded, with more than 150 applications for project funds pouring into the Federal Railroad Administration, which was tasked with evaluating the applications and doling out grant dollars. That was the problem. Instead of picking one project to fund and build and operate, the government did the equivalent taking a shotgun, pointing it into the air and firing it. The funds were spread around, and with

few exceptions (such as the Chicago-St. Louis higher-speed project) had little or no effect. In some cases, following midterm national elections in 2010, funds were returned to Washington after the election of governors who saw no value investing in modern rail transportation. Meanwhile, those who believe in this form of rail transportation and who have devoted their lives and careers to advancing it have managed to create at least a few pockets of progress. Brightline a Bright Spot All Aboard Florida’s privately funded Brightline is expected to enter service this year, with trainsets provided by Siemens, complete with Cummins-powered higherspeed Charger diesel-electric locomotives. Also, Charger locomotives capable of 125 mph are being built for HrSR (higher-speed rail) under a multi-state compact, but there are no passenger cars for them to haul due to manufacturing problems. August 2017 // Railway Age 29

HSR

All Aboard Florida Brightline trainset testing on Florida East Coast Railway main line.

Next-Gen NEC Alstom is building a new generation of Northeast Corridor trains that, for now, are called Avelia Liberty. They will replace the 20-year-old Acela Express, the so-called “Fast Pig,” so far the closest the U.S. has come to HSR. The contract is part of a $2.45 billion program modernization program to renew and expand NEC HSR. Amtrak and Alstom also signed a longterm contract under which Alstom will provide long-term technical and material support. Combined, these contracts are worth $2 billion. The Avelia will be a North American version of Alstom’s TGV. Like the Acela Express, it will be a tilting trainset with power cars at each end, but articulated. It will have one-third more passenger seats, modern amenities that can be upgraded as customer preferences evolve (improved Wi-Fi access, personal AC outlets, USB ports and adjustable reading lights at every seat, and enhanced food service). The Avelia consists of two compact power cars and nine passenger cars, with three-car expansion capability if demand grows. Alstom says the trainset is capable of operating at speeds up to 186 mph, but will initially operate at a maximum speed of 160 mph, based on NEC track speed limits. Each power car is equipped with Alstom’s Crash Energy Management (CEM) system. The tilting system is Alstom’s Tiltronix “anticipative” technology. The Avelia, which will meet current FRA safety guidelines, will be manufactured at Alstom’s Hornell and Rochester, 30 Railway Age // August 2017

N.Y., facilities. U.S. content, which includes labor costs, is pegged at 95%. A prototype is expected to be ready in 2019, with the first trainset entering revenue service in 2021. All trainsets are expected to be in service, and the Acela Express fleet retired, by yearend 2022. Bullet Train to Somewhere? Construction is under way on the first leg of California’s beleaguered bullet train, despite repeated, relentless attempts by

Unless and until politicians open their eyes, the U.S. will remain far behind the rest of the world. certain members of the state’s congressional delegation to kill it. The California High-Speed Rail Authority has now qualified five groups from Europe and Asia to bid on its “early train operator” tender. The successful bidder will work with CHSRA on the design, development and procurement of high-speed rail service, with a view to a franchise agreement. The five groups are China HSR ETO Consortium (China Railway International, Beijing Railway

Administration, China Railway Eryuan Engineering Group, and China Railway Corp.); DB International US with German Rail, Alternate Concepts, and HDR; FS First Rail Group (Italian State Railways, Trenitalia, Italian Rail Network, CentoStazioni, Italferr, FirstGroup, and McKinsey); Renfe and Spanish infrastructure manager Adif; and Stagecoach Group, Britain, and its U.S. subsidiary Coach USA Administration. Indirectly tied to California HSR is the Caltrain Peninsula Corridor Electrification Project. The project will electrify the San Francisco-San Jose corridor and equip it with high-performance Stadler Rail trainsets that will deliver faster, more frequent service to help the system accommodate rapidly increasing ridership demand. Electrification has been a goal since 1999. In 2012, local, regional and state funding partners agreed to commit resources that were used to match a $647 million Federal Full Funding Grant Agreement (FFGA) issued by the Federal Transit Administration in April 2017. An FFGA was recommended in January 2017. However, the Trump Administration delayed the decision while 2018 budget recommendations were being developed. The project is now slated for a 2021 completion. Movement in Canada In Canada, Ontario Premier Kathleen Wynne announced in May that the province will move forward with plans to build the nation’s first high-speed railroad after a report by David Collenette, Ontario’s special advisor on high-speed rail, concluded the project has a positive business case. Wynne confirmed that the province will now begin preliminary design work on the Toronto-Windsor line, which will serve intermediate stations at Pearson International Airport, Guelph, Kitchener-Waterloo, London and Chatham. Ontario has also allocated C$15 million to carry out a comprehensive environmental assessment. Collenette’s report outlines two possible options for the project. Scenario A is an electrified line operating primarily on dedicated rights-of-way. Scenario B is an electrified line using a combination of existing infrastructure and dedicated new alignments to achieve speeds of up to 155 mph. The assessment found that Scenario A offered a Benefit-Cost Ratio (BCR) of 0.36 railwayage.com

HSR for Phase 1 (Toronto-London) and 0.17 for Phase 2 (London-Windsor), which rendered Scenario A unviable. The low BCR resulted from the need for extensive and expensive tunneling, which resulted in a base cost of C$19 billion, excluding contingencies for the full corridor. Scenario B has a BCR of 1.02 for Phase 1 and 0.24 for Phase 2, reflecting higher forecast demand on the Toronto-London section. The base cost for this option is C$7.5 billion, excluding contingencies. From Toronto’s Union Station, highspeed trains would travel along Metrolinx/ GO Transit’s Kitchener corridor, sharing the line with the Union Pearson (UP) Express and planned GO RER (Regional Express Rail) services to Kitchener. This mixed operating model is likely to require a number of infrastructure improvements on this section, and costs could be shared with the RER project. A peak HSR service of three trains per hour in each direction is proposed on this section, with two trains per hour off-peak.

railwayage.com

From the Kitchener-Waterloo LRT’s planned multimodal station, high-speed trains would continue their journey west to London on a new, dedicated double-track line, with sustained speeds of 155 mph anticipated. The second phase, LondonWindsor, would run on a new electrified single-track line parallel to existing CN and Canadian Pacific lines. The report says design and construction “should ideally start by 2022,” with commercial operations beginning in 2025. Project implementation will be overseen by a new governing entity, High Speed Rail Corporation (HSRCO). Ridership is forecast to reach 10 million passengers per year by 2041, with rail capturing an 11% modal share on the corridor, eliminating 5 million motor vehicle trips per year. Toronto-Kitchener-Waterloo trip times would be cut to a minimum of 48 minutes by rail, compared with an average of one hour, 14 minutes for the current automobile journey. HSR would offer a 25-minute trip time between Kitchener-Waterloo and

London, compared with 46 minutes by car. “There have been a lot of excuses in the high-speed rail debate in Canada—the country is too large, the population is too small, it won’t be worth it,” Collenette’s report states. “Those were commonly held views in the 1970s, ’80s, ’90s and early 2000s. It may be that they made sense then. But it’s 2017, and that has changed. We know there’s enough demand and that we need to get moving on this. The next generation doesn’t believe those excuses. They have been to other parts of the world. They know there are better ways to get around.” People in the U.S. are probably having much the same thoughts. What’s needed is for the government to start acting upon their wishes.

Senior Editor Stuart Chirls, Engineering Editor Mischa Wanek-Libman and International Railway Journal Senior Editor Keith Barrow contributed to this story.

August 2017 // Railway Age 31

AILWAY GE

womeninrail Do you know a visionary woman in the rail industry?

Railway Age presents its inaugural Women in Rail awards, where we will recognize 10 women for their achievements in the rail industry in our November issue. These outstanding womenâ&#x20AC;&#x201D; five from freight railroading, five from rail transitâ&#x20AC;&#x201D;

Nominate a colleague or yourself.

will be selected based on their leadership, vision, innovation and accomplishments. Entries will be judged by a panel of women rail transportation professionals.

WomENiNRAil.sTRuTTA.mE 32

Railway age

July 2015

INDUSTRIAL products FreightCar America’s VersaFlood™ steel and aluminum hopper.

IN AGGREGATE, AN IMPROVING

CAR MARKET Stone, sand and other construction materials are helping to build new orders for railcar manufacturers. By STUART CHIRLS, Senior Editor

Top: FreightCar America Bottom: The Greenbrier Companies

ncreasing shipments of industrial products—and a dollop of favorable indicators—are spurring orders for new railcars as builders and component suppliers see interest in covered and open hoppers, mill gondolas, boxcars and other car types offering reasons for optimism in a resurgent market. Prices for scrap metal, a bellwether indicator for carbuilders, have improved 10-15% from earlier this year even though the biggest buyers, China and India, are sitting on tens of thousands of tons of excess steel-making capacity and have yet to participate vigorously in the market. That’s helped keep older cars and cars on lease rolling. The second-quarter car order backlog grew 10% quarter-to-quarter, and while deliveries only improved modestly, new orders rocketed 250% to 17,650 units, railwayage.com

the best quarterly showing in two years, according to the 2Q report of the Railway Supply Institute American Railway Car Institute (ARCI) Committee (see p. 6). Replacement demand is penciled in at more than 43,000 cars in 2017, the strongest level in more than a decade. Among industrial commodities, fracking sand, in particular, is “still crazy,” according to Robert Pickel, Senior Vice President of Marketing and Sales for National Steel Car, headquartered in Hamilton, Ontario. “You would think that fracking [the process of injecting liquid and sand at high pressure into wells to extract natural gas and petroleum] would have taken a bigger hit since the [petroleum] market collapsed several years ago,” Pickel says. But technology has improved, and drillers are using twice as much sand today—as

much as 3,000 pounds per linear yard of well, up from 1,500 pounds a few years ago—and the demand has until recently been off the charts. Says Pickel, “They can’t get it fast enough, and not just the highquality white sand from Wisconsin, but

Increasing demand for aggregate led Greenbrier to introduce the all-new DuraMax 45-foot 2,400cf open-top hopper. August 2017 // Railway Age 33

INDUSTRIAL products

sand from mines in Texas and Oklahoma. People were looking to get it to the wells any way they could, by unit train or by truck and barge.” NSC markets its 3,280-cubic-foot-capacity (cf) covered hopper for frac sand transport, the same-capacity car hauling cement, another improving commodity. “That category has been strong, mostly for big construction and infrastructure projects,” Pickel says. Cement has also helped boost NSC’s business opportunities in pressure differential cars that utilize regulated air for unloading of dry products, in 3,230cf capacity. Infrastructure projects, Pickel says, are also producing “very high demand” for open-top hoppers and gondolas to haul aggregate, broadly defined as sand, gravel, crushed stone, slag, recycled crushed concrete or geosynthetic material, widely used in drainage applications, and as a base material for foundations, highways, and yes, railroads. Aggregates are the mostmined materials in the world, and because they tend to be dense and heavy, ship in smaller-capacity cars. NSC is currently looking to start a production line for aggregate cars, including a small-cube, 2,400cf, 34 Railway Age // August 2017

45-foot open-top hopper, and a 2,500cf, 42to 45-foot gondola. Plastic pellets, grain and fertilizer are driving NSC’s production of larger-capacity covered hoppers. The class as a whole accounts for more than 60% of the builder’s current production.

Drillers use twice as much sand today as a few years ago, and demand is now off the charts. “That’s one plant and five lines,” Pickel says. “While some of that comes out of our backlog, there are other orders being pulled forward, and the market can expect more deliveries. Buyers are careful, though, because at $90,000 to $95,000 each [with load-specific interiors], a plastic pellet car

is expensive storage space. They want to make sure they will get four to six turns per car per month. And since scrap prices for some car types aren’t high enough to drive demand for new cars, lease renewals are high, even for older cars. Car velocity is down as railroads run longer, fewer trains, so the railroads need more equipment. That’s good for builders.” The lively aggregate market also led Portland, Ore.-based Greenbrier Companies in late July to roll out the all-new Dura-Max 2,400cf, 45-foot open-top hopper. Greenbrier is also putting the finishing touches on a new design for an aggregate gondola, with a light weight of 51,000 pounds and a load limit of 235,000 pounds. “Aggregate service can be really tough on a car, and our main design enhancements have focused on building a sturdier car that will spend more time on the rails, and less time in the repair shop,” says James Link, Manager of Strategic Marketing. The builder worked with large aggregate shippers to optimize loading and unloading performance, to increase the cars’ productivity and reduce turn times. Greenbrier is “actively participating” in the plastic pellet market, Link says, where railwayage.com

Vertex Railcar Corporation

Vertex Railcar Corp.’s 2,480cf optimized aggregate hopper with patented door system.

National Steel Car

INDUSTRIAL products utilization of high-cube covered hoppers is among the highest in railroading. A wave of new petrochemical projects, a positive long-term outlook for resin shipments and a “healthy number” of car retirements in the coming years support expected steady growth. Greenbrier is taking a strategic approach to sand and cement, to manage the volatility of the energy markets. With an industry-wide backlog of 19,300 cars, according to the ARCI report, few deliveries in 2Q and increasing adoption of locally sourced sand from the Permian Basin in Texas, the company wants to mitigate risk. “What we need to see—what all builders need to see—are healthy railroads and vibrant commodity carloads,” says Theodore Baun, Chief Commercial Officer of FreightCar America, Chicago. “The industry backlog of car orders peaked at the end of 2014 at more than 140,000 units. While there is growth in some segments, and pockets of demand, we were forced to idle some manufacturing plants. You have to be prudent and not engage in overbuilding through a down cycle.” Again, the demand for aggregate product has led to orders for FCA’s VersaFlood hopper, which incorporates a composite steel/aluminum carbody. The 2,430cf, 41-foot car features the patented MegaFlo transverse door system, allowing the operator to unload any or all three hopper pockets, to accommodate customer facilities. Shippers of sand, cement and roofing granules have helped sales of FCA’s smallcube, 3,283cf covered hopper, which features a proprietary one-piece center sill for a competitive car light weight. One year ago, industry estimates had as many as 40,000 sand cars in storage. That’s down to a relatively small number, to the point where FCA has begun to selectively quote prices for new car construction. Showing similar potential is FCA’s Plate F, 60-foot, 286,000-pound-capacity boxcar. The dry-lading, double-plug-door car built for several customers has been a strong seller since 2015. “Of the 110,000 boxcars in the North American fleet, roughly half are 35 years old and older, meaning pressure to replace the aging fleet should continue,” Baun says. Pellet cars, which FCA added to its portfolio a couple of years ago, are offered in 5,800cf and 6,250cf capacities. The construction market is also generating railwayage.com

orders for Vertex Railcar Corp., based in Wilmington, N.C. Now in production is its small-cube, 2,430cf open-top aggregate hopper, which is just over 45 feet long with a gross rail load of 286,000 pounds. The car features a patented automatic longitudinal door system, in single- or multipledoor versions. “Along with aggregate, there has been a constant call for sand cars, as well as cars to haul wood chips and pellets, plastic pellets and grain,” says Vertex Chief Executive Officer Donald Croteau. Vertex offers opentop and covered hoppers in several capacities; mill and other gondolas, and flatcars. Aggregate is tough on cars, and “buyers want cars built incrementally heavier where light weight is concerned,” Croteau says. “That means thicker side walls, thicker flooring and stronger gussets, so the cars have a longer life.” Vertex is also using copper-containing steel, which costs 10-12 cents more per pound but extends the life of the car. “Railroads have changed from an industry-based business to one that is financially based,” says Croteau. “Logistics fees attached to freight car operations—interchange, switching—are part of the builder’s pricing challenge. The business is customerdriven, so they ask for what they want.”

Anticipating customers’ needs are part of the freight car component supplier’s business plan. “Standard products like draft gears, side bearings and brake beams have less to do with the specific lading, and more to do with the operational performance of the railcar,” says William O’Donnell, Executive Director of Global Sales, Miner Enteprises, Geneva, Ill. “Of course, some lading requires specific protection, but in most cases these standard products can be used across car types. Our focus is on having a validated proven design, with ample capacity to meet peak demand. “With industrial products like frac sand, Miner has to understand our shippercustomer needs in some way better than [the carbuilders] do. This requires broadbased interaction with the carbuilder, car owner, shipper and unloader well in advance of any ‘boom’ in the market. We have at least four different slide gate designs ready for application for sand unloading.” In the sand category, Miner’s new AutoLOK™ II 15-inch x 48-inch outlet gate bolts to standard 13x42 hopper flanges. A 7.35-inch, low-profile design is well-suited to sand service, while the opening matches a cement unloading boot, so a single car can easily switch between commodities, for maximum operator flexibility.

Small-cube, 3,230cf sand hopper from National Steel Car.

August 2017 // Railway Age 35

R AILWAY AGE AND PARSONS PRESENT

GEN

TRAIN CONTROL

CBTC & PTC:

Tomorrow’s technology for today’s railways The International Conference on Next-Gen Train Control features in-depth technical sessions and comprehensive project updates on CBTC for rail transit and PTC for main line railways presented by leading experts from around the world. Now in its third decade, it’s the rail industry’s single-most important gathering of communications and signaling professionals from around the globe.

GOLD SPONSOR

SUPPORTING ORGANIZATIONS

OCTOBER 19 & 20, 2017

COURTYARD PHILADELPHIA DOWNTOWN PHILADELPHIA, PA AILWAY GE

KEYNOTE ADDRESS Veronique “Ronnie” Hakim, Managing Director, MTA New York City Transit

KEY TOPICS • Project Updates: New York City Transit BART LIRR/MNRR Metrolinx Toronto Transit Commission Banedanmark ERTMS • Culture Shift – Impact of New Technology Systems on Operations & Maintenance • Rising Technologies (Big Data, Autonomous Vehicles, Smart Cities) • Testing and Implementation Issues • PTC Federal Communications Commission Hurdles • Communications, Positioning, Information Processing & IT Architecture • Supplier Roundtable Agenda subject to change.

SPONSORSHIPS & EXHIBITS Jonathan Chalon • (212) 620-7224 • jchalon@sbpub.com

railway interchange 2017

Suppliers,

There is no substitute for face-to-face interaction.

at your service

By Tom Simpson, President, Railway Supply Institute

ailway suppliers well know the importance of satisfying key customer requirements like reliability, cost effectiveness and convenience. Whether the product in question is a new freight car or an energy-efficient Tier 4 locomotive, a freight car or locomotive component, track maintenance machinery or communication and signaling technology, railway suppliers work hard to anticipate customer needs and invest aggressively in new technology to improve railroads. Not surprising, then, that North America’s largest rail exhibition, Railway Interchange—hosted by the associations representing these same suppliers—the Railway Supply Institute (RSI), Railway 38 Railway Age // August 2017

Engineering-Maintenance Suppliers Association (REMSA), and Railway Systems Suppliers, Inc. (RSSI)—reflects this same customer-centric approach. Mind you, that wasn’t always the case. The turning point occurred in the late 2000s, when the three trade associations and the American Railway Engineering and Maintenance-of-Way Association (AREMA) heard what many railroads were saying about our industry’s trade shows and conferences. I’m paraphrasing here, but the upshot was that the railroads felt there were too many small conferences that were expensive, logistically difficult and increasingly less valuable to attend. Fast-forward to the very first Railway Interchange event, RI 2011, and it was clear

that the railway supply associations had listened and taken to heart such customer feedback. For the first time, our associations fully collaborated so that suppliers from the Mechanical, C&S, and M/W segments of the industry could show their stuff under one, gigantic and geographically centralized roof. At the same time (and for the first time) RSI and REMSA staged joint on- and offtrack exhibits at a local rail yard. Not only was this a gargantuan logistical undertaking that also enlisted the generous cooperation of one of the host city’s Class I railroads, Canadian Pacific, but it was a crowd pleaser that we repeated in 2013 (without outdoor exhibits), 2015 and, thanks to our 2015 host BNSF, will repeat again in 2019. railwayage.com

William C. Vantuono

Supplier-side collaboration at Railway Interchange 2017 will continue to benefit railroads.

railway interchange 2017 To add still more collaborative value, AREMA synched up its content-rich Annual Conference with the event to great effect. Also, we partnered with the Coordinated Mechanical Associations (CMA) to include their technical sessions All of this achieved maximum efficiency and return on investment for attendees and exhibitors alike. The results have been speaking for themselves ever since. Based on the success of the first Railway Interchange, and acting in good faith that future iterations would be successful, the organizers began planning and staging these massive events in a rotation that should be familiar to you: every two years in the two great, centrally located railroad cities of Indianapolis and Minneapolis. Every year since that first Railway Interchange in 2011, attendance has climbed steadily, further demonstrating the event’s unique value to the industry, and giving the organizers enough confidence to make plans for biennial Railway Interchange events through 2023. Which brings us to Railway Interchange 2017, now just a few weeks away. To be held in Indianapolis from Sept. 17-20, this year’s event promises to be another blockbuster, approaching if not surpassing the stats we achieved in Minneapolis in 2015 (which, incidentally, was an outdoor exhibit year). As a point of reference for what’s coming in Indy this year, some key stats from the 2015 show included 9,571 registered attendees, 38.8% of which held management-level titles; attendees from 42 countries; and 687 exhibitors, 11% of which were international. All this resulted in 92% of attendees describing the show as a “great” or “good” exhibition value. And, I should note, the spirit of collaboration and innovation from 2011 continues this year. Attendees and exhibitors at RI 2017 will benefit from our close collaboration with exhibit facilities (the Indiana Convention Center); an updated Railway Interchange branding program combined with a mobile-friendly website; and increased awareness-building among shippers regarding our industry’s demonstrable improvements in on-time delivery, cost containment, sustainable practices and continuous improvement. Bottom line, the sponsors of Railway Interchange continue to give the industry railwayage.com

what it wants: A regularly scheduled, broadbased event that allows an array of railroad, railway supply and international professionals to attend. An event that gives attendees access to the most modern technology and ever-richer, ever-more-relevant technical sessions covering all aspects of railroading. And an increasingly meaningful context for industry professionals to gather, share their experiences and network. In other words, as always, our customers asked and the railway supply industry delivered, with what I truly believe is a trendsetting event that is the envy of many, even those outside our industry. What’s in Store Exhibit space for Railway Interchange sold out in late July, and available hotel rooms have been filling up quickly. The exhibition will be held Sept. 17-19, with technical and educational sessions Sept. 18-20. The exhibition showcases the latest technology, services, and research by members of RSI, REMSA and RSSI, and technical presentations by AREMA and the CMA. “More than 700 exhibitors from the rail industry’s mechanical, communications and signaling and maintenance-of waydisciplines will bring their displays to the expo hall this year, breaking the previous record set in 2015,” notes REMSA Executive Director and CEO David Tennent. “Railway Interchange is a draw for the communications and signaling community, both for the opportunity to see the latest technology on display in the exhibit hall and for the IRSE and IEEE events,” says RSSI Executive Director Michael A. Drudy. AREMA Executive Director and CEO

Beth Caruso, CAE, says, “We are thrilled that the biennial Railway Interchange event continues to grow. AREMA will be offering many educational opportunities that will provide increased value for all attendees.” Highlights of the conference program, which begins Sept. 18, include the joint general session with motivational keynote speaker Ken Schmidt, a former HarleyDavidson Motor Company executive; Michael J. Wheeler, Executive Vice President & COO, Norfolk Southern, who will address the AREMA Annual Committee Chairs Luncheon on Sept. 19; and railroad industry analyst Anthony B. Hatch, ABH Consulting, the featured speaker at the AREMA closing general session on Sept. 20. The five CMA organizations will present 65 sessions on a wide range of topics. The CMA includes the ABA, IAROO, LRIW, LMOA and MARTS. LRIW will present its “Outstanding Woman of the Year” award. In addition to the AREMA and CMA meetings, the North American Institution of Railway Signal Engineers (IRSE) will hold its annual general meeting on Sept. 19. There will also be an IRSE-sponsored meeting of the IEEE on Sept. 20. Registration information and online access are available at http://railwayinterchange.org/registration-information/. Hotel reservations may be made at http:// railwayinterchange.org/lodging-location/. Companies interested in sponsorship opportunities for the Railway Interchange exhibition or AREMA Conference can learn more about remaining sponsorship opportunities and deadlines for sponsorship commitments at http://railwayinterchange. org/sponsors/become-a-sponsor/.

August 2017 // Railway Age 39

People / 100 years / Meetings STEPHEN BONINA WSP USA

High profile: WSP USA, the company originally known as Par-

sons Brinckerhoff, has named Stephen Bonina, P.E., as Vice President and Eastern Region Fleet Manager for WSP’s TEC (Transit & Rail Technical Excellence Center), Newark, N.J. Bonina is responsible for overall management of WSP’s rail vehicle practice in Boston, Newark and Atlanta. With more than 33 years of experience with commuter rail, rapid transit, light rail and streetcars, he has served as President, Project Director and Lead Engineer with rail vehicle manufacturer Stadler US Inc. (formerly Interfleet); Principal Consultant with SNC-Lavalin Rail & Transit; Associate with CH2M, and Project Manager with the Port Authority of New York & New Jersey. A licensed professional engineer in New Jersey, Bonina received an M.S. in management from New Jersey Institute of Technology, and a B.S. in electrical engineering from the State University of New York Maritime College.

tephen Hoye has been appointed Vice President of Pacific Harbor Line by parent Anacostia Rail Holdings, effective early August. Since 2011, Hoye had served as Superintendent of the Belt Railway Company of Chicago and, since 2014, director of the 10-person Chicago Transportation Coordination Office (CTCO). Port of New Orleans President and CEO Brandy Christian has been appointed to the Railroad-Shipper Transportation Advisory Council (RSTAC). The 15-member Council was created by statute under the Surface Transportation Board and provides advice on regulatory, policy and legislative matters to the Board members, the U.S. Secretary of Transportation, the U.S. Senate Committee on Commerce, Science and Transportation, and the U.S. House Transportation and Infrastructure Committee on railroad transportation policy issues. Its 15

members are appointed by the STB Chairman; Anne Begeman has been serving as Acting Chairman. Genesee & Wyoming Australia Pty Ltd (GWA) appointed Luke C. Anderson as CEO, effective Oct. 2, 2017. Anderson previously served as CFO of OZ Minerals Limited, an Australian mining company. He succeeds GWI Chief Operating Officer David Brown, Interim GWA Managing Director since December 2016. Gay M. Knipper joined HNTB as Senior Program Manager and Vice President, specializing in program and construction management. She is based in New Orleans. Knipper has more than 30 years of experience in infrastructure management, administration and finance of multibillion-dollar PM/CM programs. She will initially focusing on HNTB’s work with the Georgia DOT Major Mobility Investment Program.

100 years ago in railway age gazette august 1917 Half Portions On Dining Cars To The Editor of the Railway Age Gazette: I notice in your publication your reference to the merits of a la carte and table d’hote in restaurants. I have wondered many times since war began and prices commenced to go up, why a similar arrangement [of half-portions] did not work in dining cars. Many times while eating on the dining cars, a large portion of my dinner has gone back to the kitchen on account of the portions being too large.

oct. 4-5, 2017

Southwest Association of Rail Shippers 2017 SemiAnnual Meeting Irvine, Calif. https://www.swrailshippers.com/ upcoming_meetings.asp

oct. 16-20, 2017

Michigan State University Railway Management Certificate Program: Railway Engineering & Technology Pueblo, Colo. https://railway.broad.msu.edu/ education/ Contact: Nick Little 517-353-5663

oct. 19-20, 2017

Next-Gen Train Control presented by Railway Age and Parsons Courtyard Philadelphia Downtown http://www.railwayage.com conferences@sbpub.com

oct. 23-25, 2017

ASLRRA 2017 Eastern Region Meeting Providence, R.I. Contact: cboyle@aslrra.org. 202-585-3447 https://www.aslrra.org/

nov. 6-10, 2017

Railroad Track Inspection & Safety Standards Chattanooga, Tenn. http://ttap.utk.edu/

nov. 7, 2017

CARS (Canadian Association of Railway Suppliers) National Railway Day Conference 2017 The Westin Ottawa Hotel, Ottawa, Canada Contact: Taisha Poulin 613-237-3888

Signed, Frequent Traveler 40 Railway Age // August 2017

railwayage.com

Products Wheel machining

Pettibone Speed Swing 445F Updating the innovative design of the industry’s original do-it-all rail crane, Pettibone offers the Speed Swing 445F. Designed to be versatile for multiple railroad service applications, the 445F offers precise hydraulic engineering and ample power to lay rails, set ties, and perform numerous other tasks. Powered by a 163-horsepower Cummins QSB4.5 Tier 4 diesel engine that offers fuel savings up to 10% over the previous model, the Speed Swing 445F features a Dana T20000 3-speed transmission with twist grip

electric shift control that delivers exceptional torque. The machine has an impressive front load capacity of 10,000 pounds and side load capacity up to 8,000 pounds. Operators can move the Speed Swing between jobsites quickly, traveling at 25 mph on Hi-rail and 20 mph with all-terrain rubber tires. The tires, along with four-wheel drive with a rear wheel disconnect, also allow greater maneuverability off the rails to simplify most jobs, along with f our-wheel outboard dry disc service brakes. provide sure stopping power. www.gopettibone.com.

Powerful Railcar Vibrators

With one of the highest force to weight ratios available in the marketplace, the Martin® IMP3 Impacting Railcar Vibrator delivers the power required to evacuate compacted bulk materials such as fertilizers, bentonite clay, Portland

railwayage.com

cement, grain and other agricultural products.. High quality design standards deliver superior equipment reliability and long service life, allowing the competitively priced units to improve workplace safety with very little maintenance and a low cost of ownership. The IMP3 requires an air supply of 80 psi and 25 cubic feet per minute (0.012 MPS). When operated using a filtered, regulated and lubricated air supply, the unit requires virtually no maintenance. For more information: vibration@ martin-eng.com.

nterpipe, the third-largest producer of solid-rolled railway wheels in the world, has implemented the ESPRIT CAM software system from DP Technology of Camarillo, Calif., ESPRIT’s functionalities best fit Interpipe’s needs and included milling machining from 2- up to 5-axis, turning machining from 2- up to 22axis, wire EDM from 2- up to 4-axis, multitasking mill-turn machining, Baxis machine tools, and high-speed 3- and 5-axis machining. To demonstrate the capabilities of the ESPRIT CAM system, Twist Engineering application engineers produced an NC program for machining a railway wheel on a vertical turning machine with two synchronized turrets. After finishing the program, the application engineers simulated the machining operation with ESPRIT. They used ESPRIT to configure the simulation with virtual machine settings, such as setting the limits of motion of the machine tool axes, in order to match the actual machine tool as closely as possible. After simulating the program in ESPRIT they made a few minor changes to the program then ran it on the actual machine tool. The program ran perfectly the first time on the machine tool and provided a substantial reduction in cycle time. Interpipe, of Ukraine, also contracted with Twist to develop 3D models of machine components and special tooling and post processors for several of their machines. ESPRIT’s open architecture enables users to customize the program and create new modules using an Application Programming Interface. Information: www.espritcam.com.

August 2017 // Railway Age 41

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proach@interstate-mcbee.com

ltk engineering services

215-641-8826

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mac products

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973-344-5891

edward.gollob@macproducts.net

miller ingenuity

877-843-0767

sales@milleringenuity.com

miner enterprises

630-232-3000

630-232-3055

sales@minerent.com

315-786-5431

315-786-5676

janice.pheile@nyab.com

new york air brake

jchalon@sbpub.com 36-37

ngtc

212-620-7224

qual-tran products co llc

215-699-9102

215-565-2563

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railquip inc

770-458-4157

770-458-5365

sales@railquip.com

railway equipment co

763-972-2200

763-972-2900

sales@rwy.com

railway educational bureau

402-346-4300

402-346-1783

bbrundige@sb-reb.com

800-611-7245

859-885-7804

www.rjcorman

spectrum inc

800-605-9818

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zmax

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r j corman railroad group

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

42 Railway Age // August 2017

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 Michael Boyle International Area Sales Manager Nils Michael Boyle Dorfstrasse 70, 6393 St. Ulrich, Austria. +011436767089872 mboyle@railjournal.com 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

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August 2017 // Railway Age 43

Perspective: Short Line & Regional

Short Line Tax Credit a Win All Around

ongressmen, commentators and citizens all give voice to the need for bi-partisan cooperation on the work that needs to be done to strengthen America’s economy. Unfortunately, advocating bi-partisan cooperation turns out to be a lot easier said than done. I am happy to report that the short line railroad industry has provided Washington an excellent opportunity to turn words into action and that action has now reached an important milestone. Legislation to make the short line rehabilitation tax credit (45G) permanent has now been co-sponsored by a majority of both Houses of Congress. The House bill (H.R. 721) has 239 co-sponsors and the Senate bill (S. 407) has 52 co-sponsors, making them two of the most widely co-sponsored bills in the current Congress. The sponsorship is heavily bi-partisan, a remarkable feat in a Congress that is having difficulty getting together on almost any other subject. The 45G legislation has reached this milestone because it checks so many of the boxes that members of both political parties are looking to fill. It is tax policy that allows American-based companies to keep more of what they earn; incentivizes private investment in infrastructure, and keeps jobs and taxes in the United States. As Congress approaches the much-anticipated debate on tax reform, I hope they will remain focused on those boxes. The short line tax credit maximizes private investment in important transportation

239 IN TOTAL, bill H.R. 721 HAS

CO-SPONSORS 44 Railway Age // August 2017

infrastructure. The railroad must spend two dollars for every dollar in credit up to a credit cap equivalent to $3,500 per mile of track. The government is not giving these small businesses a dollar, but rather letting them invest more of their own money in capital improvements. Since 2005 the credit has leveraged over $4 billion in capital projects. This additional spending power allows short lines to speed up projects that are in the works and take on new projects that were otherwise unaffordable. Investing in better track leverages significant additional investment by railroad customers. For example, in South Dakota, the improvements made by the 670-mile Rapid City, Pierre & Eastern Railroad since it began operations in 2015 have already attracted more than $311 million in new facility investments by six South Dakota companies. Those facilities employ 260 workers. This result is being duplicated in the 49 states that are served by America’s 600 short line railroads. Railroads are an all-American proposition. They can’t take their operations or their jobs overseas. All their taxes are paid in the U.S. Virtually everything they buy to improve their infrastructure—the ties, the steel rail, the ballast, the locomotives and the freight cars—are made in the U.S. The Railway Tie Association, which keeps comprehensive data on this subject, reports that the 45G credit has resulted in short line purchases of more than one million ties over and above their purchases without 45G. The U.S. railroad supply industry is the most vibrant in the world, employing tens of thousands of individuals across the country, and it is railroad spending that keeps it that way. Railroad rehabilitation is a labor-intensive effort. As small businesses, most short lines do not have the necessary in-house labor force or specialized equipment, so they must hire contractors and lease heavy machinery for the majority of this work. The Federal Railroad Administration estimates that half of every dollar spent on short line track rehabilitation is used to pay workers. These are good-paying construction and

45G sponsorship is bi-partisan—a remarkable feat for congress.” manufacturing jobs that put paychecks in the hands of a U.S. workforce that has been left behind in the past decade. Investment in track builds long-lasting transportation assets. A new railroad tie can last up to 40 years. New steel rail will last longer than that. The 45G tax credit maximizes investment in assets that will preserve rail service, reduce transportation rates and help customers grow their businesses. Those assets will be producing those same benefits for 30 to 40 years, an excellent return on investment. Finally, short line railroad investment addresses the concern of rural communities that a major infrastructure improvement program will be focused exclusively on urban areas where the opportunity for private matching funds is greatest. A large portion of the industry operates in rural and small-town America, where short lines are a shipper’s only connection to the national railroad system. The service area of short lines insures investment in rural America, and the matching provisions of the credit insures the required private investment. It sounds like a win all the way around.

LINDA DARR President ASLRRA

railwayage.com

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