Railway Age December 2019

D ECEM B ER 2 0 1 9

w w w. r a i lwaya g e .c o m

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

2020 OUTLOOK STRONG HEADWINDS

HIGH-CAPACITY LIGHT RAIL

Ottawa’s New Hybrid System

AI FOR OPS TESTING

Predictive Analytics For Safety

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AILWAY GE

JUNE 2019 2019 DECEMBER

34 FEATURES

22

2020 Freight Rail Outlook

26

High-Capacity Light Rail

30 34

Railroads Hit an Inflection Point

Ottawa Breaks New Ground

Life in the Fast(eners) Lane Resiliency and Durability

AI for Ops Testing Predictive Safety Analytics

DEPARTMENTS 4 6 7 36 36 36 37 38 39 39

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

COLUMNS 2 8 9 10 11 40

From the Editor Watching Washington Financial Edge Supply Side ASLRRA Perspective Perspective

On the Cover: A BNSF domestic intermodal train crosses Lake Pend Orielle near Sandpoint, Idaho.

Photo: Bruce Kelly

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 88 Pine St., 23rd Fl., New York, NY 10005-1809. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 220, No. 12. 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© 2019 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, PO Box 1407 Cedar Rapids, IA. 52406-1407, Or call toll free (US Only) 1-800-553-8878 (CANADA/INTL) 1-319-364-6167. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital).

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December 2019 // Railway Age 1

FROM THE EDITOR

AILWAY GE Subscriptions: 800-895-4389

Acronyms, We’ve Got Acronyms

I

n my experience, CBD is an acronym for “Central Business District.”

CBD now has a different meaning: cannabidiol, the secondmost prevalent of the active ingredients in cannabis (marijuana), and an essential component of medical marijuana. There is now, in my home town, a CBD shop in the CBD. Holy smokes!

The railroad industry is rich with acronyms. One of these days I’m going to follow through on a threat I’ve made several times: Write a book called Railway Age’s Comprehensive Acronym Dictionary. If you would like a signed copy, I’d be happy to inscribe my initials on the title page.

BTW (by the way), in case you were wondering, my middle initial, “C,” stands for Carmine. My ancestors were from Italy, home of the 32-mile, meter-gauge Centovallina Railway, which negotiates the mountainous terrain between Domodossola, Italy, and Locarno, Switzerland. A company that goes by the acronym FART (Ferrovie Autolinee Regionali Ticinesi) operates the Swiss portion of the line. Propulsion is electric, not gas. I’m not making this up!

The FART train transitions nicely to two new acronyms that Railway Age is proud to introduce: HCLR, for “High Capacity Light Rail” (p. 26), and HFCMU, for “Hydrogen Fuel Cell Multiple-Unit” (p. 7).

HCLR, now up and running in Ottawa, is a hybrid, a cross between LRT (Light Rail

Transit) and rapid transit (“metro” or “subway”). The vehicles are four-section articulated and run in pairs, but they’re 98 meters long, run at speeds as high as 50 mph on a 100%-grade-separated right-ofway, including tunnels in the CBD, and arrive every four minutes under ATO (Automatic Train Operation) with the newest generation of Thales SELTRAC moving-block CBTC (CommunicationsBased Train Control). Some at OC Transpo call their new system HCLS, “High Capacity Light Subway,” even though most of the system is above ground.

HFCMUs, now running in Europe, will be a first for North America, in California.

SBCTA’s (San Bernardino County Transportation Authority) vehicles will be a version of the Stadler Rail FLIRT, for “Fast Light Intercity and Regional Train; German Flinker Leichter Intercity-und Regional-Triebzug.” Try saying that five times fast, if you want to flirt with verbal confusion. BTW, a fuel cell combines hydrogen and oxygen to produce electricity. The byproduct is H20. That’s water.

So, dear readers, kindly remember that an HFCMU is different from an EMU (Electric Multiple-Unit), DMU (Diesel Multiple-Unit) or DEMU (Diesel-Electric Multiple-Unit). DEMUs have traction motors. DMUs use mechanical drive. Try not to confuse them, OK?

WILLIAM C. VANTUONO Editor-in-Chief

Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform.

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88 Pine Street, 23rd Fl. New York, NY 10005-1809 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr. President and Chairman JONATHAN CHALON Publisher jchalon@sbpub.com WILLIAM C. VANTUONO Editor-in-Chief wvantuono@sbpub.com ANDREW CORSELLI Managing Editor acorselli@sbpub.com BILL WILSON Engineering Editor/Railway Track & Structures Editor-in-Chief wwilson@sbpub.com DAVID C. LESTER Managing Editor, Railway Track & Structures dlester@sbpub.com Contributing Editors: David Peter Alan, Roy Blanchard, Jim Blaze, Peter Diekmeyer, Alfred E. Fazio, Bruce Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Art Director: Nicole D’Antona Graphic Designer: Hillary Coleman Corporate Production Director: Mary Conyers Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors David Briginshaw db@railjournal.co.uk Kevin Smith ks@railjournal.co.uk David Burroughs dburroughs@railjournal.co.uk Customer Service: 800-895-4389 Reprints: PARS International Corp.

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NE TGEN R A I L W AY A G E P R E S E N T S

FREIGHT RAIL

Beyond Track. Beyond Trains.

#NGFR20

WHERE IS THE GROWTH IN FREIGHT RAIL? DISCUSSIONS INCLUDE:

• Automatic freight train operation: How soon?

• PSR after one year: Is it working?

• Railroads, shippers, rate cases and the STB

SPEAKERS INCLUDE: Keynote Speaker JIM SQUIRES Chairman, President & CEO Norfolk Southern

Free Trade and the Railroads PATRICK OTTENSMEYER President & CEO Kansas City Southern

REGISTER NOW

MAR. 10, 2020

Union League Club of Chicago

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Industry Indicators “Weak Domestic Manufacturing, Feeble Economic Growth, Trade Spats” “A combination of a weak domestic manufacturing sector, feeble economic growth abroad that’s limiting exports, continued trade spats that are disrupting global supply chains, and general economic uncertainty are creating strong headwinds for U.S. rail volumes,” the AAR reported last month. “In October 2019, total U.S. rail carloads were down 8.4% from October 2018, their ninth straight decline. Excluding coal, U.S. carloads in October 2019 were down 5.2%, slightly better than the 6.1% decline in September 2019, but otherwise the biggest percentage decline since January 2016. Intermodal won no prizes in October either: It was down 7.8%, its biggest percentage decline since January 2009.”

Railroad employment, Class I linehaul carriers, OCTOBER 2019 (% change from OCTOBER 2018)

TRAFFIC ORIGINATED CARLOADS

FIVE WEEKS ENDING NOVEMBER 2, 2019

MAJOR U.S. RAILROADS

by Commodity

OCT. ’19

OCT. ’18

% CHANGE

55,361 (-1%)

Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron & Steel Scrap Motor Vehicles & Parts Crushed Stone, Sand, & Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads

104,162 4,040 44,831 31,317 157,058 63,697 371,784 6,121 15,705 26,082 29,572 16,074 38,957 15,359 77,173 111,672 21,238 41,324 17,047 31,264

110,815 4,699 46,720 32,373 156,455 62,154 437,338 5,721 16,967 28,104 32,133 18,501 46,742 18,448 86,006 119,793 21,919 39,296 21,285 31,711

-6.0% -14.0% -4.0% -3.3% 0.4% 2.5% -15.0% 7.0% -7.4% -7.2% -8.0% -13.1% -16.7% -16.7% -10.3% -6.8% -3.1% 5.2% -19.9% -1.4%

Executives, Officials, and Staff Assistants

Total U.S. CarLoadS

1,224,477

1,337,180

-8.4%

396,097

436,209

-9.2%

1,620,574

1,773,389

-8.6%

Total employees: 134,582 % change from OCTOBER 2018: –1%

Transportation (train and engine)

7,653 (+1%)

CANADIAN RAILROADS

Professional and Administrative

total CANADIAN carloads

11,001 (-1%)

COMBINED U.S./CANADA RR

Maintenance-of-Way and Structures

31,330 (-1%)

Maintenance of Equipment and Stores

23,780 (-1%)

Transportation (other than train & engine)

5,457 (-1%)

Source: Surface Transportation Board

EMPLOYMENT still DECLINING, SLOWLY Figures released by the STB show Class I total railroad employment yet again dropped 1% in October 2019, measured against October 2018. Five of six employment categories experienced virtually the same percentage drop, 1%, when rounding is taken into account. This most certainly indicates headcount reductions attributable to Precision Scheduled Railroading, but at this point, continued plummeting traffic is a larger factor. Longer term, it’s difficult to predict where employment is headed (but we noted that last month, the month before, and the month ... ).

4 Railway Age // December 2019

Intermodal

FIVE WEEKS ENDING NOVEMBER 2, 2019

MAJOR U.S. RAILROADS

by Commodity

OCT. ’18

% CHANGE

128,843

1,331,944

1,315,011 1,443,854

-25.3% -6.0% -7.8%

1 352,711 352,712

0 357,998 357,998

-15.0% -15.0%

Trailers Containers

96,210 1,588,446

128,843 1,673,009

-25.3% -5.1%

TOTAL COMBINED UNITS

1,684,656

1,801,852

-6.5%

Trailers Containers TOTAL UNITS

OCT. ’19 96,209 1,235,735

CANADIAN RAILROADS Trailers Containers TOTAL UNITS

COMBINED U.S./CANADA RR

Source: Rail Time Indicators, Association of American Railroads

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TOTAL U.S./Canadian CARLOADS, OCT. 2019 VS. OCT. 2018

1,620,574 OCTOBER 2019

AILWAY GE

1,773,389 OCTOBER 2018

Short Line And Regional Traffic Index CARLOADS

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

ORIGINATED OCT. ’19

ORIGINATED OCT. ’18

% CHANGE

53,150 18,926 28,794 12,507 26,411 7,876 9,536 2,598 17,067 11,396 2,747 2,501 19,173 15,939 47,604 10,064 78,323

51,595 18,336 29,443 12,749 30,023 7,309 10,120 2,685 19,625 8,798 2,354 2,346 19,306 14,894 44,887 10,300 84,445

3.0% 3.2% -2.2% -1.9% -12.0% 7.8% -5.8% -3.2% -13.0% 29.5% 16.7% 6.6% -0.7% 7.0% 6.1% -2.3% -7.2%

Copyright © 2019 All rights reserved.

TOTAL U.S. Carloads AND INTERMODAL UNITS, 2010-2019 (year-to-date through october 2019, in millions)

ARE YOU A RAILROAD OR SUPPLIER SEARCHING FOR JOB CANDIDATES?

Visit http://bit.ly/railjobs To place a job posting, contact: Jennifer Izzo 203-604-1744 jizzo@mediapeople.com

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December 2019 // Railway Age 5 RA_JobBoard_1/3Vertical.indd 1

9/30/19 3:16 PM

Industry Outlook FRA Grade Crossing NPRM

CP Acquiring Central Maine & Quebec Canadian Pacific (CP) has reached an agreement with Fortress Transportation and Infrastructure Investors LLC (FTII) to acquire the Central Maine & Quebec Railway (CM&Q), which owns 481 miles of rail lines, primarily in Quebec and Maine. The end-to-end transaction will provide CP customers with access to ports at Searsport, Me., and to Saint John, New Brunswick, via Eastern Maine Railway Company (EMRY) and New Brunswick Southern Railway (NBSR).

“This strategic acquisition gives CP a true coast-to-coast network across Canada and an increased presence in the eastern U.S.,” said CP President and CEO Keith Creel.

“With additional port access, more dots on the map and our proven Precision Scheduled Railroading operating model, we are confident this transaction will bring benefits to all stakeholders moving forward.”

As part of the transaction, FTII will retain ownership of Katahdin Railcar Services (KRS), a tank car cleaning and repair facility, and the contract to operate at a 12-mile branch line at FTII’s Long Ridge Energy Terminal in Monroe County, Ohio. FTII noted it intends to continue to develop and grow both the KRS and Long Ridge branch line businesses.

6 Railway Age // December 2019

The transaction is currently expected to close at the end of 2019 and remains subject to customary closing conditions. Over the coming weeks, CP, FTII and other stakeholders will move toward closing.

“We are excited about this transaction as it brings value to our shareholders, while ensuring that CM&Q continues to provide safe and reliable rail transportation options,” said Joe Adams, FTII CEO. CM&Q, Railway Age’s 2016 Regional Railroad of the Year, was created from the bankrupt assets of the Montreal, Maine & Atlantic, the railroad involved in the infamous Lac-Mégantic crude oil train disaster, a wreck that claimed 47 lives and decimated a small, bucolic Canadian village.

“If history is to be accurately served, the history books will also recount how a new railroad came in, and did its best to set things right, restoring service, but more important, helping a community get back on its feet,” Railway Age wrote in 2016.

“The Central Maine & Quebec’s first daunting task was rebuilding the railroad, which at the time of the purchase was severed in the middle following the tragic accident. CM&Q invested in excess of $22 million in track and infrastructure improvements.”

the federal railroad administration last month published a Notice of Proposed Rulemaking (NPRM) to improve safety at public highway-rail grade crossings nationwide.

The proposed rule would require all states and the District of Columbia to develop and implement a new or updated highway-rail grade crossing action plan no later than one year after the effective date of the final rule.

FRA said it “will review states’ action plans for sufficiency and, upon approval, it will publish the plans on the internet. These action plans aim to enable states to prioritize infrastructure and equipment investments at railway crossings using a variety of resources, including Federal formula funds and grants.”

Since 2017, “the Federal Highway Administration (FHWA) has distributed more than $900 million in formula funds to States for grade crossing improvements through the Section 130 program,” FRA noted.

“Additionally, FHWA has awarded $324 million in discretionary grant funds to 43 projects that include grade crossing improvements and trespass prevention elements, with more than 500 grade crossings in 26 states to be improved as a result of these investments.”

FRA also announced that the Highway-Rail Crossing Handbook has been updated and revamped for the first time in more than 10 years. “This offers guidance for best practices and new standards to improve safety at the nation’s 130,000 public rail and road junctures,” FRA said.

In addition, FRA conducted the 4th annual railroad crossing safety campaign, Stop. Trains Can’t, “which aims to increase public awareness of railroad crossings and to reduce injuries and death.” The campaign focused on cities that have had the highest vehicle/train incidents in the past 10 years. railwayage.com

Market SBCTA Breaks New Ground The San Bernardino County Transportation Authority (SBCTA) has awarded a contract to Stadler for a hydrogen fuel cell multiple-unit (HFCMU) trainset that will be the first of its type to operate in the U.S. The contract includes an option for four additional vehicles. The hydrogen-powered FLIRT (Fast Light Intercity and Regional Train; German: Flinker Leichter Intercity-und Regional-Triebzug) H2 is expected to enter service in 2024 on the Redlands Passenger Rail Project (the “Arrow”), a nine-mile line linking Redlands , Calif. and the Metrolink regional/commuter rail station in San Bernardino.

WORLDWIDE

NORTH AMERICA

PANAMA Metro says the bid from the Korean HPH Joint Venture Consortium (HSP) achieved the highest overall score for a contract to build a new monorail, which will become Line 3. Four bids were received for the contract, which covers design engineering, construction of civil works, fitting out the monorail, supply of six-car monorail trains and system commissioning. HSP, which comprises Hyundai Engineering & Construction, Posco and Hyundai Engineering, submitted a bid valued at $2.5 billion.

Kansas City Southern has completed global deployment and roll-out of a Cloud-based operational testing system from Bellevue, Wash.-based CloudMoyo, a developer of artificial intelligence (AI) technologies for railroad operations, revenue and asset management, safety, crew scheduling and maintenance. The CloudMoyo Operational Testing System (OTS) has been deployed across all KCS rail subsidiary locations in Mexico and the U.S. OTS, CloudMoyo notes, “streamlines the rail operational test management program in its entirety by facilitating the planning, execution, and reporting of tests in a Cloud-based environment. This ensures compliance with FRA safety regulations and guidelines and GCOR (General Code of Operating Rules). This solution enables railroad operators or inspectors to record results of drug and alcohol testing, signaling, movement and switching, continuing to ensure railroad safety across the organization.”

Metra awarded a $15.5 million contract to Railhead Corp. to install cameras

railwayage.com

inside the commuter railroad’s passenger cars. Burr Ridge, Ill.-based Railhead Corp. will be in charge of the design, implementation and installation of a surveillance camera system capable of capturing video of all passenger seating areas and vestibules on a minimum of 400 railcars and a maximum of 700 railcars. Railhead was chosen for the project through a competitive bidding process. Metra currently plans to install nine cameras per railcar. The cameras will be connected to onboard DVR systems that will record and store the video. The project is slated for completion in fourth-quarter 2020.

Raptor® Tank Cleaning Systems/ Twin State Environmental has been selected to design, engineer and supply a resin hopper railcar cleaning system for the acrylonitrile styrene acrylate (ASA) plant at INEOS Styrolution’s new facility. The washing and drying system is “capable of washing and drying all four compartments at the same time,” the company noted. “This system utilizes Raptor® automation and technology, allowing it to be operated safely by a single attendant.”

December 2019 // Railway Age 7

Watching Washington

The “Baking” of Short Line Sustenance

K

ermit the Frog won our hearts singing “lovers, the dreamers and me,” while Thomas the Tank Engine’s “yes we can” encouraged us and Barack Obama’s “Audacity of Hope” inspired us. These words also describe small-railroad entrepreneurs providing the first and last mile for one of every five carloads.

Unlike the seven major railroads with which they partner, many smaller railroads—579 short lines; 24 regionals—are but a washout, derailment or customer defection away from financial calamity.

Plus, like their major-railroad connections, they stand in harm’s way of reinvigorated economic regulation; further liberalization of truck size and weight limitations; uncertainty as to trade and tax public policy; and government-mandated minimum train crew size lacking an evidence-based nexus to safety.

With small-railroad track traversing 49 of 50 states and 350 of 435 congressional districts, a unified message is an essential rampart against such harm. Performing the coordination, which extends to relationships with federal regulators and state agencies, is the American Short Line and Regional Railroad Association (ASLRRA), whose leadership performs a multi-tasked selling job demanding more than what playwright Arthur Miller (“Death of a Salesman”) described as “riding on a smile and a shoeshine.”

ASLRRA President Charles H. (Chuck) Baker, age 41, surely has an infectious smile, and probably a shoeshine, but his February

45G TAX LEGISLATION KNOWN AS

ADDS JOBS, benefits SHIPPERS

8 Railway Age // December 2019

2019 selection to lead the nation’s small railroads is owed to gilded credentials— policy studies at Rice University; mergers and acquisitions analysis at Deutsche Bank; and as a partner at the Chambers, Conlon & Hartwell lobbying shop representing the National Railroad Construction and Maintenance Association, OneRail Coalition, American Railway Development Association, CN and Norfolk Southern.

Less than a year into the ASLRRA top job, Baker already is credited with demonstrating exceptional deftness in aligning interests of his small-railroad members with those of the majors represented by the Association of American Railroads.

For many short lines, especially some 250 independent—and often family owned— railroads not under a holding company financial umbrella, every external economic threat menaces their ability to remain an essential carload collection and distribution partner.

Atop those financial hazards is loss of an investment tax credit, known as 45G for its provision in the federal tax code.

Since its 2005 inception, 45G has stimulated track, track structure and equipment rehabilitation and expansion that, for many small railroads, might not otherwise have been affordable.

Where the 2017 Tax Cuts and Jobs Act delivered some $1.5 trillion in tax benefits, it flowed primarily to large businesses, many of which did not reinvest it as anticipated. By contrast, the 45G tax credit, which expired in 2017, applies only to actual investment that better secures and adds to rail employment while directly benefitting shippers and Class I connections.

With Congress having failed to extend for 2018, and beyond, the 50% investment tax credit (previously capped at $3,500 per mile), many small railroads have had to borrow the difference or defer capital investment. Understandably, Baker spends considerable time urging its congressional restoration; he now counts almost 300 House sponsors and 62 of 100 Senators supporting legislation to make 45G permanent and retroactive to Jan. 1, 2018.

Equally disquieting is an increase in extreme weather events—hurricanes,

Chuck baker is credited with deftness aligning ASLRRA and AAR.” tornadoes, blizzards, intense heat waves, record cold snaps—plus related floods and fires. Similarly threatening small railroads financially are cyberattacks, with 80% of corporate America reportedly experiencing them annually, along with thousands of ransom attacks (malicious software blocking computer access until ransom is paid).

In “thinking through small-railroad disaster planning and recovery,” Baker superintended creation of a computer accessible best-practices resource library for small railroads typically lacking routing alternatives, and which cannot afford higher levels of layered insurance available to Class I’s.

And as privately owned railroads are ineligible for Federal Emergency Management Agency (FEMA) relief or Department of Transportation programs benefitting other modes, Baker is pitching to Congress creation of a permanently funded disaster relief program capped at $25 million annually.

“We fight and claw for every inch,” Baker says. “For short lines, inches are the difference between winning and losing.”

This Baker surely appears to possess ingredients and a plan to promote, sustain and advance small railroads.

FRANK N. WILNER Contributing Editor railwayage.com

Financial Edge

Justice For All?!?

W

hen an investor buys rail equipment to lease it to a customer (lessee), generally there are terms and conditions that govern the use and maintenance of that equipment during the term of the loan or lease. Specifically, in leasing, the investor in the equipment (the lessor) makes a forward bet on the future value of the equipment.

This residual estimate on the future value of the equipment is either the greatest joy or the greatest tragedy for equipment lessors.

Today, consumers and suppliers of rail equipment are navigating a winding road through the challenging equipment market (freight and passenger).

In a soft market, one pivot point for investors is the condition in which a lessee returns equipment to the lessor at the end of a lease term.

As industry veterans would opine, in tight markets when an asset can immediately find a new home, investors may look the other way on certain condition items in order to continue to generate revenue.

However, in weak markets, an investor may more stringently enforce return conditions to ensure that an asset is returned with maximum opportunity for redeployment as opportunities arise.

There is often a fair-sized gulf (or chasm perhaps) between consumers and suppliers in the interpretation of return provisions in finance documents. Irreconcilable interpretations of these condition-related issues can lead the parties to a courtroom. Disputes of this type, while frequent enough, are generally kept under wraps. After all, no one wants to become the subject of tawdry railcar repair facility gossip.

So it was surprising when the on-theball sleuths who issue Railway Age’s daily Rail Group News emails came upon two publicly identified incidents of conditionrelated lawsuits over a span of about two weeks’ time.

The more notable of the two was that Philip Morris Capital Corp. (PMCC) is suing Amtrak for what it has called the cannibalization of eight HHP8 passenger locomotives. The HHP8 locomotive is an 8,000 horsepower electric; Amtrak ordered railwayage.com

16 from Bombardier/Alstom in 1996. The HHP8 runs solely on a catenary system, and all have been in storage since 2014, “retired” from service because Amtrak deemed them unreliable and subject to frequent, unacceptable breakdowns.

Cannibalization means that PMCC is accusing Amtrak of taking parts from the HHP8 locomotive and using those parts in Acela Express power cars whose propulsion system is virtually identical (they are also Bombardier/Alstom). However, in the hierarchy of equipment- and locomotive-related events, cannibalization is pretty atrocious.

To pilfer parts from someone else’s property (which is expressly prohibited by the terms of just about every rail equipment lease ever written) is a blatant disregard for the owner of the equipment and its residual investment in the equipment. PMCC is seeking $93 million.

At this point, the courts will sort out if PMCC’s accusations are accurate, and whether there was any wrongdoing by Amtrak. What is interesting is that PMCC has gone on record in its attempt to sue a ward of the U.S. government.

It is an interesting choice of action. PMCC is the leasing arm of one of the globe’s most notorious companies.

(It is no secret that the majority of PMCC’s profits come from tobacco sales.

In 2018, PMCC’s parent company had a 43% market share of U.S. tobacco sales.

Philip Morris is also paying roughly that same percentage of the greater-than $200 billion tobacco settlement that was negotiated in 1998.)

Leasing for profitable companies consumes capital and generates a tax shelter. The more profitable a company is, the more tax shelter it craves. Leasing fits that bill.

Amtrak’s most recent restructuring seems to have some traction, as it recently posted its best year ever in terms of revenue and ridership. Amtrak still lost roughly $30 million from operations in its 2019 fiscal year, and is working diligently to move to operational breakeven economics.

Certainly, ceasing payments on locomotives sitting idle for five years will help that

lessors are entitled to have their lessees comply with lease terms.” cause. If the facts prove out and Amtrak is found to be at fault, taxpayers and politicians can question what right Amtrak has to appropriation dollars if those funds were being used nefariously. Taxpayers have a right to expect Amtrak to abide by the contracts it signs.

Lessors are definitively entitled to have lessees comply with the terms and conditions of their leases.

However, as a matter of policy, were PMCC to “win” its suit against Amtrak, that additional $93 million would have to be added to the state and federal appropriations that must be approved every year in order to keep Amtrak in business. Taxpayers and politicians might struggle with that. Clearly, PMCC is not looking for a tax refund, but taxpayers might bristle at the additional funding requirements if Amtrak settles with PMCC. The choice to litigate seems bold and askance with the best interests of both parties. PMCC and its parent company don’t need the bad press, and a win doesn’t sound like a win at all.

Got questions? Set them free at dnahass@railfin.com

DAVID NAHASS President Railroad Financial Corp.

December 2019 // Railway Age 9

Perspective: Supply Side

Infrastructure Investments Support American Manufacturing and Jobs

I

f any issue held out the promise of bipartisan agreement in Washington, D.C., it was the need for a comprehensive infrastructure plan.

President Trump campaigned on the issue. Both parties supported the kind of investment that would bring jobs and quality of life improvements to communities nationwide. While all agree there is no free lunch, all equally agreed the money needed to be found.

Now we realize there is no such thing as a sure thing.

The current political environment in Washington, and even in many states, makes it difficult to reach bipartisan consensus on almost anything, even infrastructure.

Still, if anything is to get done, infrastructure clearly tops the list of what should be possible. Central to any infrastructure debate must be reauthorization of the FAST (Fixing America’s Surface Transportation) Act. Most stakeholders in city and state government fret over the money for roads and bridges in the proposed bill. That’s important, but equally important is the strength of our railway system and its capacity for moving people and goods.

Rail moved $174 billion in goods in 2017 alone. For some critical commodities, such as petroleum and ethanol, rail is by far the safest mode of transport for fuels that drive our economy.

Allowing rail infrastructure to deteriorate is tantamount, therefore, to allowing

The railway supply sector employs

125,000 people across the country 10 Railway Age // December 2019

our economy to break down.

A few facts might stimulate Congress to begin thinking anew about an infrastructure bill and concurrent reauthorization of the FAST Act: ¤¤ The railway supply sector employs 125,000 people across the country and contributes nearly $17 billion in federal and state taxes each year. ¤¤ The railway supply industry supports an additional 525,000 workers in the wider economy, either in the supply chains of railway suppliers or through the wage spending of those employed by the firms themselves or their supply chains. Put another way, for every direct job in the railway supply industry, an additional 4.2 jobs are supported elsewhere in the economy. ¤¤ Investments in rail infrastructure directly support these jobs. A longterm commitment of federal funds will encourage rail suppliers to invest their private capital in manufacturing capacity and create even more U.S. jobs. ¤¤ Contrary to some recent suggestions in the media, many companies manufacture passenger railcars in the U.S. Most of these companies are eager to expand the work they do for Amtrak, transit agencies that operate regional/ commuter rail, rapid transit and light rail, and others.

The Railway Supply Institute and its members seek robust federal investment not only in increased FAST Act set asides for The Railway-Highway Crossings Program (Section 130)—which has significantly reduced fatalities at grade crossings—but also for sustained long-term funding of the rail title within the FAST Act. We want to see Congress not only provide more resources, but also incentivize development and deployment of new technologies that can help reduce highway-rail grade crossing accidents and save lives. We know that everyone in Washington, D.C., can agree on that.

One other important element of the FAST Act is its requirement to enhance the nation’s rail tank car fleet that serves rail

We all must keep telling elected officials about the cost of inaction.” shippers of critical commodities essential to Americans’ everyday lives.

RSI member companies have delivered substantial improvements to the tank car fleet in recent years­—the DOT 117 is the most recent development. As one example, the likelihood of product release for tank cars carrying crude oil has been reduced by more than 70%, as new or modified cars have been brought on line. It is vitally important that Congress and the U.S. Department of Transportation continue to support rail tank car manufacturers, lessors and owners as we work to meet the remaining FAST Act deadlines for ethanol and other flammable liquids.

The North American railroad system comprises more than 1.6 million railcars hauled by more than 38,000 locomotives over more than 140,000 miles of rail. Every piece of this intricate puzzle was shaped and put into place by railroad suppliers for their railroad partners.

If we are going to keep this massive system working and reap the full benefits for our economy, it is important for us as business leaders to continue to push our elected officials to ensure they understand the costs of inaction.

Mike O’Malley President Railway Supply Institute

railwayage.com

Perspective: ASLRRA

The Cost of Doing Nothing is Rapidly Rising

E

arlier this year, Congressman Peter DeFazio, the new Chairman of the House Transportation & Infrastructure Committee, held his Committee’s first hearing on infrastructure investment and surface transportation. He entitled it, “The Cost of Doing Nothing.” In his opening remarks, DeFazio detailed the need and laid out the economic and environmental reasons for infrastructure investment. But sadly and accurately, he also noted that highlighting needs and benefits has not yet spurred Congress to action and implored his colleagues to understand the “cost of doing nothing.”

In the short line tax credit world, which encourages and incentivizes increased infrastructure investment, it’s nearly a year later and nothing has happened. The cost to the short line industry and the cost of doing nothing has been significant. Consider the following real-world cases where investment capital previously supplied by the short line rehabilitation tax credit (45G) is on the verge of extinction.

A 35-mile railroad in one of the poorest areas of eastern New York needs a bridge upgrade to reach its largest customer. The railroad has lined up an $800,000 state grant that requires a 10% match. The railroad needs the tax credit for that match.

Absent this upgrade, the customer will either switch to truck or move the plant elsewhere, which would be a significant economic blow to this area.

In New Hampshire, an 80-mile short line handling hazardous material has used the tax credit to gradually upgrade its track

a nY short line requires

a match of

10% railwayage.com

to safely handle the 286,000-pound railcars that the shipper requires. The project requires an additional $600,000, with the tax credit slated to cover $200,000 of that total.

A South Carolina short line moves loaded trains, including propane cars, over a crossing with blind approaches requiring crews to stop and flag the crossing and proceed at walking speed through the crossing. Building a new crossing with greater visibility and active warning devices is a $650,000 project. The railroad needs the tax credit to make this work.

A 40-mile railroad in western New York committed to a large tie replacement program to handle the 286,000pound cars required by its shippers. They received a $1.5 million state grant requiring a $200,000 match that they planned to fund through the tax credit. Rather than walk away from the grant, they borrowed the money and now have an annual debt payment of $18,000.

In the context of Washington, D.C. budgets and negotiations over tens or hundreds of billions or even trillions of dollars, these numbers are not always meaningful. But to these small businesses operating in the real world, this money can be the difference between success and failure, black and red, making it work and closing up shop, hiring and firing, meeting payroll or not. The short line tax credit works: It is an effective, smart and powerful mechanism to allow a railroad to spend more of what it brings in on infrastructure investment.

DeFazio’s noble efforts to establish a meaningful infrastructure or surface transportation program have so far been foiled by the bitter partisanship that stymies Congressional agreement on almost every subject. The short line tax credit, however, blessedly does not suffer that partisan affliction, as legislation making the 45G tax credit permanent enjoys huge bipartisan support in Congress. H.R.510 has 294 co-sponsors in the House and S.203 has 62 in the Senate, split almost evenly between Democrats and Republicans. Those are remarkable figures.

After acquiring the southern portion of CSX’s former Saginaw Subdivision in March, Lake State Railway’s primary

45G is a smart and powerful mechanism for investment.” classification center relocated to the former CSX yard in Flint, Mich. LSRC is turning the yard into its primary classification center and reviving production switching.

Facility improvements have begun, but finishing the job requires an additional $1.4 million. Those improvements are on hold pending approval of the 45G tax credit.

Following the 2015 Flint water crisis, politicians of all stripes flocked to Flint to voice their outrage over the situation.

Congressional hearings were convened; congressmen lined up to voice similar sentiments and to emphasize their commitment to helping the people of Flint. Today, LSRC is prepared to make a significant investment in Flint’s local economy—if only Congress would recall their commitment to Flint, and get a tax deal done that includes 45G! Extending the 45G tax credit may not garner the headlines of a Congressional hearing, but as in all the examples above it is an opportunity to help thousands of small businesses increase economic activity and jobs in their local communities, typically in small-town and rural America. And rail transportation is safe and green to boot!

Congress should take that opportunity while they have the chance.

Chuck Baker President ASLRRA

December 2019 // Railway Age 11

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Sponsored Content

Business Challenges Technology For Tomorrow’s Railroads

Plasser American Progress Rail

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Sponsored Content

Plasser American METRO 4X4 ZW

P

lasser American, which established itself in North America in 1957 when the first Plasser & Theurer tamper was delivered in the U.S. to the Louisville & Nashville Railroad from Austria, provides a full range of high-production, hi-performance track machines for every conceivable railway maintenance-of-way function: Production and switch tamping. Ballast profiling and distribution. Track stabilization and consolidation. Ballast bed cleaning. Formation rehabilitation. Material handling. Track renewal and track laying.

Turnout renewal and laying. Mobile rail treatment. Track geometry measuring and recording. Catenary installation and maintenance. Track maintenance using track motor vehicles.

The newest member of the Plasser American family is the METRO 4x4 ZW, a heavy-duty, high-performance switch and production tamping machine specially designed for the stringent requirements of transit railways, with their sharp curves, steep grades and restricted clearances. Its standard equipment includes the fully automatic, computer controlled AGGS (Automated Geometry Guiding System) lifting, leveling and lining system.

The METRO 4X4 ZW utilizes Plasser design concepts and components that have been well-proven world-wide. Its unique configuration utilizes a center turntable and lifting cylinders, one on each corner of the machine, that allows loading and unloading on lowboy trucks, making it highly portable.

A more-compact version of the METRO 4X4, the all-purpose ZW offers the full tamping capability of its “big brother,” including lifting, lining and cross-level in curves, turnouts and tangent track. It also features a third-rail lifting device.

Dimensionally, the METRO 4X4 ZW is designed to operate in tight transit clearance envelopes: 39 feet, 4 inches long; 10 feet, 6 inches high; 8 feet, 6 inches wide. Weight on rail is 98,500 pounds (49.25 tons). Powered by a 450-hp engine and rolling on 28-inch diameter

wheels, the METRO 4X4 ZW can travel from job site to job site on-track at speeds up to 40 mph.

Another feature that makes the METRO 4X4 ZW an ideal machine for transit agencies as well as contractors is its portability. For example, on transit systems configured as a hub and spoke, with multiple lines radiating from a central terminal, the machine can be taken off the rails on one line, loaded onto a lowboy truck with its corner lifting cylinders, and transported to a job site on another, without having to return to the main terminal, as would a large railbound machine.

The METRO 4X4 ZW fits the requirements of busy rail transit systems that need to keep their trains and customers on the move.

Loading the METRO 4X4 ZW onto a lowboy truck is relatively simple. The entire machine is raised on its lifting cylinders, allowing the truck to back underneath it.

Thus, the METRO 4X4 ZW fits the requirements of busy rail transit systems that need to keep their trains and their customers on the move.

For operators, the METRO 4X4 ZW is controlled through a PLC (programmable logic controllers). The interfaces are two touch screens, so all the controls are at the operator’s fingertips. Visibility is straight down into the tamping area from the cab, and there is also a front cab for track travel in the forward direction. One person can operate the machine, though most railways utilize a

second crew member as a helper.

The METRO 4X4 ZW is designed more for versatility in tough conditions than high-production tamping. It can tamp up to 20 ties per minute. And since ride quality and passenger comfort are important for rail transit systems, this machine has the same high-quality measurement and tamping systems found on Plasser machines operating on high-speed railways all over the world.

For Integrated track geometry analysis, Plasser offers the AGSS Cloud. All tampers can be furnished with software that enables automatic background upload of AGGS track geometry data files into the web-based Datamatic app, which allows viewing, as well as overlaying, AGGS data with a second set (for example, to compare track before and after tamping). Any person with a login to the PlasserSmartMaintenanceSuite can access AGGS data for viewing, or for downloading the data for further processing with an AGGS office system.

The Metro 4X4 ZW is equipped with Plasser Smart Maintenance Suite technology (PSMS). PSMS Datamatic 2.0 works as a browser-based system called Machine Condition Observer (MCO), where using a computer, tablet or smart phone provides continuous current data on all machines in a fleet as well as the GPS position of each machine.

To view Plasser’s interview with Railway Age, visit: https://youtu.be/NrSugsvyGxs

HIGH CAPACITY I PRECISION I RELIABILITY

Your partner for life The Plasser GRM3000T is a heavy-duty, high performance switch and production tamping machine. It is a multi-function tamping machine and has fully automatic track lifting, lining, and cross-leveling capabilities. The machine’s compact design and weight allow for flexibility when transporting with flat cars or road trucks. The machine is constructed for ease of operation and maintenance. The optional GRM2X Tamping Trailer is an integrated, independently working tamping trailer that can be connected to the GRM3000T via TampLink to increase productivity levels.

Plasser American – Your partner for life.

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Sponsored Content

I

TALOS®, From Progress Rail

n Greek mythology, Talos was a giant bronze man who guarded the island of Crete by hurling stones at the ships of pirates and invaders. He circled Crete’s shores three times daily.

In the real world of North American railroading, TALOS® is Progress Rail’s energy management system that leverages machine learning and computing power to analyze and optimize routes, resulting in significant improvements in fuel and time. TALOS® delivers better fuel efficiency (up to 15%), reduced emissions (also up to 15%), and improved train handling for safer operation and increased network capacity, all of which can improve a railroad’s bottom line.

On the RTT (Railroad Test Track) at TTCI in Pueblo, Colo., a TALOS®controlled heavy-haul freight train has been operating automatically, circling the 13.5-mile loop at speeds up to 50 mph, climbing a 1.5% ruling grade and negotiating an S-curve, among other rightof-way characteristics. The 4,300-foot, 14,000-ton consist—two head end locomotives, 80 loaded coal gondolas, and two trailing units—doesn’t hurl stones.

It generates data, Big Data, from several sources, and processes and integrates that data to provide what railroaders call a “golden run,” in which locomotive power and tractive effort, in-train forces and dynamic braking are expertly managed for optimum results.

TALOS® Train Automation technology leverages machine learning and AI (artificial intelligence) to encode locomotive engineer behavior, analyze train runs and optimize train operation. At TTCI, it functions in asynchronous mode, in which the head end and trailing locomotives, in distributed power mode, are controlled independently, separated by a virtual “fence.” The system incorporates track topology, train consist information, route data and historical analysis to build a personalized and optimized driving strategy, control throttle and dynamic brake settings. TALOS® Software is natively integrated into the locomotive desktop screen. The locomotive engineer monitors the system, acknowledging the

alerter as required. TALOS® performs train operations, enabling the engineer to focus on safety and situational awareness. The engineer interface is an EMD FIRE (Functionally Integrated Railway Electronics) touch screen display.

TALOS® Train Automation also seamlessly creates customized strategies for each route and a train’s specific operational conditions. It scales and deploys operationally specific behaviors with ease, achieving performance efficiencies for fuel and time, while increasing network capacity. It is designed to accommodate all locomotive makes and models.

For the TTCI test, Progress Rail

TALOS® performs train operations, enabling the locomotive engineer to focus on safety and situational awareness. equipped four EMD® locomotives—three SD70ACe T4s (EPA Tier 4-compliant, with the new 1010 T4 prime-mover) and one SD70ACe T3—with TALOS®. The 4,500BHP, two-stage-turbocharged 1010 T4 was developed using the combined engineering expertise of Progress Rail and its parent company, Caterpillar.

A team of Progress Rail project and systems engineers collaborated to develop and fine-tune this steel-wheelon-steel-rail rolling leviathan into a precision machine—one that has established a benchmark in railroading technology and innovation, operating automatically for more than 200 miles.

For complete optimization, Progress Rail’s AESS™ (Automatic Engine Start/ Stop) solution monitors critical operating

parameters during locomotive idling, safely and effectively shutting down the prime-mover once all factors are satisfied.

Rounding out the Big Data big picture is PR Uptime® Suite, which leverages operational data to replace time-based maintenance with complete ConditionBased Maintenance, reducing costs, increasing productivity, and delivering the right insights and information to the right people, at the right time: Advanced asset monitoring combines with Progress Rail’s Locomotive Monitoring Center (LMC) expertise to offer customized reports and streamlined data delivery.

Uptime Cloud offers secure data storage and distribution, easily integrating with railroad ERPs. Uptime Connect helps to bridge data collection and transmission safely, while providing an electronics platform to integrate on-board and offboard solutions. Uptime Analytics uses data to create troubleshooting recommendations before a potential problem occurs. All this translates into measurable value in the shop, in the yard, and out on the main line.

Many innovations developed by Progress Rail and its predecessor companies since the early 20th century have led to TALOS®, a 21st century deployment of next-generation railroading.

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The Loram Family

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n 2018, two iconic companies— Loram Maintenance of Way, Inc., and Georgetown Rail Equipment Company (GREX)—joined forces to offer complementary technologies and services to the railway industry. While Loram is based in Minneapolis, Minnesota, GREX continues to operate out of its Georgetown, Texas facilities under its own name; its bridge monitoring arm, SENSR Structural Monitoring Technologies, also remains under its own brand.

Loram is a market leader in equipment and services for rail grinding, ballast maintenance, track inspection and friction management. GREX is a market leader in material handling and tie inspection technologies. The acquisition strengthened each company’s core business and enhanced their strategic capabilities for serving the global railway infrastructure market.

Loram and GREX share a long-standing passion for innovation and customer service. The combined strength of the two companies maximizes value for customers, extending their mission of delivering advanced equipment and unrivaled customer services.

Bringing GREX into the Loram group of companies is part of several strategic acquisitions Loram has made during the past decade to strengthen its product line. These include Roadscanners rail division, Tranergy Corporation, Tangent Rail, a majority stake in Railway Vehicle Engineering Ltd. (based in Derby, U.K.), and HyGround Engineering. HyGround is a substructure maintenance management company that provides specialized services in track geotechnics to analyze and solve railway geotechnical problems in ballast, subballast and subgrade by using GPR (Ground Penetrating Radar).

Recently, Loram Pty. Ltd., the company’s wholly owned Australian subsidiary, acquired all the assets of the rail grinding business of Aurizon Operations Ltd. Through this acquisition, Loram has increased the number of Australian customers to which it provides rail grinding services by four, including all

main line and turnout rail grinding for Aurizon Network Pty. Ltd. Loram is the original equipment manufacturer of Aurizon’s entire fleet of rail grinders, offering unmatched technical and operating expertise with its advanced equipment for customers in numerous countries. The acquisition included Loram’s newly built 120-stone RG419, the most productive rail grinder in the Southern Hemisphere.

Together, all the companies now in the Loram family provide a cohesive, multiservice offering to the global railway maintenance-of-way market.

Bringing GREX into the Loram group of companies is among several strategic acquisitions Loram has made this past decade.

For GREX, the transition of being acquired by Loram has been very positive. The company recently marked its 25th anniversary, and has enjoyed much success as an industry leader and innovator. GREX has been given the opportunity to share ideas, develop complex new solutions and collaborate on projects. The combined expertise of Loram and GREX is a catalyst for new and creative ideas.

The response from customers on the acquisition has also been very positive.

Loram and GREX both have long-standing reputations in the railway industry as great companies to work with, characterized by innovative cultures.

Loram and GREX embrace a “solutions mindset,” understanding that most of

today’s railway customers aren’t looking to purchase individual pieces of equipment, one contracted maintenanceof-way service or isolated consulting service. They are looking to solve problems, and want to purchase solutions.

Loram’s continued global expansion as a respected leader in railway maintenance contract service operations is based on the principle that technology is global and service is local. The company is staffed with people who are among the best in all they do and know, and who have been highly respected leaders throughout their careers.

The future for Loram and GREX is bright and exciting. Technology has become very data-centric. For example, GREX has accumulated a vast amount of tie inspection data to utilize in other areas, and Loram collects a large amount of rail profile data annually and has a vast amount of GPR data. Customers can expect to see many new solutions for equipment and inspection technologies that are highly data-centric, building on information gathered by all the companies that are part of Loram Maintenance of Way, Inc. Loram and GREX customers can also expect to see new “yellow iron”— the massive, traditional track machines that perform the heavy work out on the railroad.

To view the Loram/GREX interview with Railway Age, visit:

https://youtu.be/jh-HDD-v28o

STRONGER. TOGETHER. Loram and GREX have joined forces to bring smarter maintenance solutions to the rail industry. We’re putting data to work to help you plan out and perform your maintenance of way programs with precision. We’re engineering new equipment to work faster, smarter and safer. And we’re researching and developing cutting-edge technologies to solve the challenges your railroad will face today, tomorrow and well into the future.

T U R N I N G DATA I N TO A C T I O N A B L E I N T E L L I G E N C E W E ’ R E A S S E M B L I N G S O M E O F T H E B R I G H T E S T M I N D S I N T H E I N D U S T RY TO D E V E LO P N E X T - G E N E R AT I O N R A I L S O LU T I O N S TO K E E P YO U O N T R AC K .

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Sponsored Content

Trainyard Tech LLC CLASSMASTER™

I

n 2003, Trainyard Tech LLC became the first to apply standard industrial automation technology to the railway industry, using state-of-the-art technology. The company’s solutions cover the spectrum, from cutting-edge retarder control hardware to switch point bi-directional wheel detection to modular, redundant and customized classification systems to complex process automation. The company, whose first priority is advancing railroad yard control safety, has refined and improved its systems by staying current with the latest technology. Utilizing a Microsoft Windows environment, Trainyard Tech’s systems offer flexibility, low-cost maintenance and upgradability.

The CLASSMASTER™ yard control system, the mainstay of TrainYard Tech’s offerings, is closing in on a staggering 100 million railcars handled. It has always been a work in progress, due to the complexity of classification yards and the need for continuous improvement.

The most recent CLASSMASTER™ upgrades incorporate additional wheel detector circuits, the ability to collect and process a growing amount of railcar data, and enhanced algorithms that improve throughput and productivity.

For better system reliability and availability, CLASSMASTER™ offers multiple computer redundancy and I/O (input/ output) interfaces.

Since classification yard operations,

To view Trainyard Tech’s interview with Railway Age, visit:

https://youtu.be/Wx5xHAa_jOY

with all their field equipment, must endure extreme weather conditions, CLASSMASTER™ also offers improved troubleshooting capabilities. The ability to pinpoint a failure and its location and rapidly diagnose and address it is a significant part of keeping a classification yard operating safely, at peak efficiency.

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2020 OUTLOOK

INFLECTION POINT Railroads are hitting strong headwinds.

Everything is on the table.

The experts weigh in.

BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF

22 Railway Age // December 2019

railwayage.com

A

Bruce Kelly

s the first two decades of the 21st century come to a close, the freight railroad industry looks very different from the struggling, inefficient, overweight group of carriers that had just received a massive shot of adrenaline from the Staggers Rail Act of 1980.

That was 40 years ago. What we have now is a healthy, efficient, productive, environmentally friendly, technologically advanced, safe and highly profitable industry—that, for whatever reason(s), cannot seem to grow market share (compared to the trucking industry) and is facing a big problem dealing with regulators looking to change the status quo (for example, the Surface Transportation Board’s consideration of modifying how Class I cost of capital is calculated, and how “revenue adequacy” is determined).

Rail freight traffic is in a major slump right now (some call it a “recession”), but it will recover. When it does, will this industry be positioned for growth?

Will it be able to develop new lines of business? Will it feel less inclined to concentrate on over-used corporatespeak clichés like “shareholder value” and “customer-centric” and deliver?

Railway Age asked two of its expert Contributing Editors—Cowen and Company Managing Director Jason Seidl and long-time stalwart and consultant Roy Blanchard—to weigh in on the current state of railroad affairs.

railwayage.com

JASON SEIDL 2019 has been a year of financial gains from Precision Scheduled Railroading (PSR), of modal conversions to trucking, of a weakening industrial economy, of difficult end-of-year comparisons, and of uncertainty over ongoing trade wars.

Indeed, with 4Q2019 volumes down 7%, the rail carriers are facing decisions to trade some volume for price, a practice in which they have been loath to partake during the past decade.

While we have heard of several carriers being selectively more lenient on pricing, it has clearly not been a wholesale change in their practices. Indeed, we still see the rails keeping pricing up

2020 OUTLOOK above their cost of inflation but may end up at the lower end of their historic range (somewhere between 2.5%-3%).

All of this depends on where traffic volumes end up shaking out over the next year. We believe volumes will remain under pressure for the remainder of 2019 and into 1Q2020 as tariff pull forward impacts went on through early February 2019. While a resolution to the ongoing Chinese trade dispute would undoubtedly result in a spike in demand (as evidenced by responses in our Proprietary Railroad Shipper Survey), the ability for investors to predict such an event remains suspect at best. Hence, our view includes an economic backdrop of muted growth.

Given this backdrop, rail traffic numbers should improve as the year goes on with more favorable year-overyear comparisons and the likelihood of truck competition easing toward the back half of the year aiding optics for the rail group.

Indeed, truck capacity should play a prominent role in the ability for railroads to grow their intermodal traffic in 2020.

2019 has been beset by an overcapacity problem in the trucking space, which was created with record Class 8 orders from euphoric pricing gains in 2018.

Capacity has been coming out of the market in 2019, but at a somewhat slow pace. This may change in 2020 as insurance companies are sending out notices of renewal rates that are up 30-40% for some carriers. With margins razor thin for some smaller carriers, such increases could prove fatal.

Additionally, the implementation of a National Drug & Alcohol Database for drivers should limit the number of acceptable candidates for trucking companies as it populates. The potential national legalization of marijuana could also have an impact on failed drug tests, as we highly doubt the underwriters who are left in the trucking space will allow such usage, even if legal.

We exit this year feeling cautious on the rail stock group, given its outperformance to the broader market year to date, weaker than anticipated 4Q volumes and lack of a near-term catalyst.

Despite our near-term concerns, we still December 2019 // Railway Age 23

favor the group for longer-term investors.

As the rails exit 2020, many should be well positioned to see the benefits from ongoing PSR implementation and ready to take on the challenge of automation. Automation may be the next step change in railroading but faces several obstacles including regulations, labor and technology.

Roy blanchard Can the railroads remain relevant? The Fall meeting of NEARS (Northeast Association of Rail Shippers) did little to dispel doubts about the ability of PSR to deliver additional supply chain value to customers and short lines alike.

The single thread that ran through most of the presentations was that railroads are still difficult to do business with.

That isn’t to say PSR is a faulty process.

It’s just that we haven’t conveyed its benefits very well to our customers, and much of the railroad performance to date—inconsistent transit times, trail annulments, steepened demurrage fees, etc.—aren’t doing any good.

Fact is, railroading is a derived-demand business. One doesn’t ask for an empty car with no freight to move. But once there is a derived demand to move product, beneficial owners want it moved with minimum hassles and maximum dependability. In other words, customers would like to see Freight Car Scheduling (FCS).

It’s not a new idea. The Missouri Pacific perfected it in the 1970s. The concept was first developed by the late Guerdon Sines, then Vice President Information and Control Systems for the railroad. He is

By William C. Vantuono 24 Railway Age // December 2019

fondly remembered by one MoPac alumnus as “the only IT guy I ever met who could talk down an operating guy.”

The purpose of FCS was to schedule each freight car, loaded and empty, on the series of trains that would carry it from origin to destination, just as an airline passenger is scheduled on a series of flights from origin to destination by the airline’s reservation

“you need assets to build your customer base. without assets, you’ll have fewer customers.” system. The FCS system would give railroad customers—shippers and consignees—accurate estimates of when cars would arrive at destinations.

By the time MoPac was acquired by Union Pacific in 1982, FCS was operating its entire network. Shortly thereafter, UP closed down FCS. According to one railroader, “It didn’t work because the UP operating department was either unable or unwilling to run its freight trains on schedule, and, as a result,

clerks had to reschedule every freight car on a new set of trains almost every time a car arrived at a yard.”

That’s why, rather than reworking its train schedules or implementing a train control system that could help keep trains on schedule, UP elected instead to shut down the FCS system, proving once again that if senior operating management doesn’t sincerely believe in a process and enforce it, it won’t happen.

Happily, there is a cadre of senior managers who got it early and nurtured a following. Fast-forward to the 2000s and Hunter Harrison was leading the way. He laid out what he called the five tenets of “Precision Scheduled Railroading,” and spelled them out in his book, How We Work and Why: Running a Precision Railroad. Switch customers at the same time every day.

Control variable cost. Do it safely. Empower employees. Manage asset deployment.

Hunter ran the same local trains every day. He wanted power and crews at the other end of the run on plan so they’d be there to handle whatever came up on the return trip.

He put everything he had in the yard that was headed for the same distant node on the next train out of town to minimize dwells.

Yes, it ruffled some customer feathers at first. But a railroad runs seven days a week, and it’s hard to keep cars moving if customers take off weekends and holidays. But there is a way to have both. I recall CN’s Claude Mongeau saying shortly after Hunter left that he wanted to use the Hunter methodology “to create a kinder, gentler railroad.” He certainly did that, and his successor JJ Ruest is following through. Moreover, Canadian Pacific’s Keith Creel—cut very much from the same cloth—is achieving the same results.

Yet, at NEARS, we had Penn State School of Business Administration professor Peter Swan, Ph.D., tell us, “The proponents of Precision Scheduled Railroading try to level the workload and asset base of internal railroad company yard movements and over-the-road train movements. It is not car-focused, though its advocates expect that it will eventually become more car-focused and on-time-schedule-delivery-efficient.” This is precisely part of the perception problem I mention above.

I fear what’s going on is that railroad managements, in their zeal to cut costs, take points out of the operating ratio and improve net income, have gone after costs railwayage.com

Bruce Kelly

2020 OUTLOOK

2020 OUTLOOK first, then tried to run a low-cost railroad and then serve customers better. It hasn’t worked because you need assets to create customers, and without the assets you’ll have fewer customers.

At CSX, the charge is to find out what it will take to win more merchandise business and translate customer needs into product design. The successful scheme is one that creates fewer boutique products and more products with wider applications much the same way Apple has done.

In short, he’s seeking customer solutions (his term, not mine) that blur the lines between carload and intermodal product design, find ways to use operating resources that can serve both products simultaneously, and make it easier for customers to access these tools.

At Kansas City Southern, the economies of PSR are taking center stage. On KCS’s 3Q2019 earnings call, Sameh Fahmy, EVP for PSR, ticked off these results to date: “We took out 14% of our locomotives.

So now we have an active fleet of 903, when we started the PSR exercise it was 1,046. We also took out a lot of cars. When you look at the active car count, we now run at about 58,000 cars. We used to be at 64,000 cars online, this time last year. Car-miles went from 70 miles per day to 100 miles per day.

We know that we can get to 150 and even higher than that. When you take out the least reliable assets, you improve reliability.

So failures have reduced by 31%. When you

have fewer foreign cars on the railroad, you end up with significant savings in equipment cost. We’re down by 24% in Q3. Crew costs have come down 9% in this quarter compared to the same quarter last year. We take every train that has a high horsepower/ trailing ton ratio and ask, for example, why do we have five locomotives for 800 tons?

“In Mexico, we replaced two intermodal and one manifest train with one train that would combine the intermodal and manifest going to that area and will set out the blocks that will be combined, so if it’s Santa Maria, intermodal and manifest, it will all go together. Rojas is the same way. So you drop three or four actually, because you have four locations, so four set-outs instead of nine set-outs of blocks. Thus we’ve seen significant progress in reducing the work events, reducing train delays, improving velocity and reducing car dwell. That’s one example.

“We have about 68% trip plan compliance. We should be at 85% or 90%. Already 77% of our customers are seeing a significant or moderate improvement in our transit time and our service. Grain unit trains went from 1.20 to 1.42 trips/month. That means instead of doing a complete round-trip in 28 days, we do it in 21 days. Every day means $9 million increase annually in our revenue.”

This is exactly what Hunter Harrison did on the Illinois Central 20 years ago. KCS is truly a work in progress. These details show what can be done with a proper plan, and the process works on any railroad of any

size, any place. Non-Class I roads, take note.

Finally, a friend whose railroad career goes back to the USRA in the 1980s says, “Trees don’t grow to the sky, and neither do margins keep improving. But the benefit of the improved margin is still there, creating an ongoing attraction.

“Obviously, to increase the buy-in bucket will then require an overall expansion.

Right now, the opportunity for expansion in many parts of the U.S. railroad business is pretty obscure, and the coal business is creating considerable headwinds, but nothing is forever, and the industry is wellpoised financially to handle any opportunities that might arise.

“Whether the individual members have the wisdom, the foresight and abilities, and the guts to do so is another matter. The answer lies outside the discussion of PSR, which has become rather boring.” what’s it all about, tony?

“A company must survive and thrive so that all of its workers can,” notes independent analyst Tony Hatch. “One can argue about strategy (which employees left, etc.) and whether PSR is only about OR. It’s not.

Look at CN and CP, the goal line for all of these U.S. PSR experiments. Not all layoffs are good or smart, and all are painful (less so for railroads). But CSX, unfinished, is a better railroad than it was in 2016.

“Key point: Companies are not charities, and railroads are not utilities.”

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December 2019 // 12/2/19 Railway12:34 AgePM 25

ottawa confederation line

HIGH-CAPACITY

LIGHT RAIL

f legendary New York Yankees catcher Yogi Berra were to ride Ottawa’s new Confederation Line, he would say—provided he was familiar with the old North Shore’s Electroliners or Philadelphia Suburban Transportation Co.’s Liberty Liners—“It’s déjà vu all over again.”

Berra’s famous malapropisms aside, OC Transpo may have come to a fork in the road and taken it in selecting what is 26 Railway Age // December 2019

best described as hybrid rail transit technology for the Confederation Line. In the traditional sense, it’s not light rail. Nor is it rapid transit. It’s High Capacity Light Rail, or HCLR, to coin a new acronym (see p. 2).

But because a portion, in Ottawa’s Central Business District, is underground, some at OC Transpo call it High Capacity Light Subway (HCLS).

Suffice to say, the Confederation Line— with up to 180,000 weekday riders, the

busiest single-line LRT in North America— combines characteristics of both: • Four-section-articulated, 100% low-floor, 49-meter (160.8 feet)-long, 600-personcapacity Alstom Citadis Spirit vehicles, operated in pairs totaling 98 meters (321.6 feet).

Eventually, they will be extended to 118 meters (387 feet) by adding a fifth section to one of the cars in each trainset. The vehicles have an on-demand door-opening mode, activated by the driver, for use in extreme railwayage.com

All photos: William C. Vantuono

I

Is Ottawa’s Confederation Line light rail? Is it rapid transit?

Actually, it’s both. BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF

cold to assist in maintaining the vehicle’s internal temperature. Passengers can activate the doors when the vehicle is stopped in a station. OC Transpo’s vehicles have been compared to the Electroliners, as they are similar in size and configuration. (See “A Bit of History” later in this article.)

• Continuous ATC (Automatic Train Control) and ATO (Automatic Train Operation) with driverless capability through an RF (radio frequency)-based Thales SelTrac™ moving-block CBTC (CommunicationsBased Train Control) system. RF antennas are located at both ends of the trainset; transponders determine vehicle position.

Speed sensors and accelerometers determine fine positioning. Wayside RF antennas are spaced 200 meters (656 feet) apart, with overlap redundancy to ensure continuous signal propagation. It is the latest iteration of SelTrac™. (See “A Bit of History.”)

• Headways of approximately 4 minutes, 7 seconds with the current 13-trainset fleet. Four additional trainsets, bringing the Citadis Spirit fleet to 17 (34 cars), will reduce headways to approximately 3 railwayage.com

minutes, 20 seconds. A full complement of 19 trainsets will offer even tighter headways (the CBTC system is capable of supporting 1 minute, 45 seconds).

• Maximum operating speed of 80 kph (50 mph). No highway-rail grade crossings.

• 8,000 PPHPD (people per hour, per direction) capacity, increasing to 11,000 once all vehicles are in service.

The Confederation Line (Line 1) opened to revenue passengers on Sept. 14, 2019. The name reflected the original hope of starting service in 2017, the 150th anniversary of Canada becoming a nation. The project cost an estimated C$2.1 billion, making it the largest infrastructure project in Ottawa’s history. The bulk of the cost was for construction, as most of the property needed was publicly owned.

Ottawa signed a 30-year DBFM (DesignBuild-Finance-Maintain) agreement with the Rideau Transit Group (SNC-Lavalin, ACS Infrastructure Canada Inc. and EllisDon). OC Transpo operates the system with its own employees. Ottawa City Council approved the Confederation Line

in December 2012, with construction beginning the following year. This followed many years of study and debate, including the awarding, then cancellation, of a contract for a completely different route to south Ottawa.

The argument frequently arose as to whether or not Ottawa had the population to warrant a rail transit system. However, steady growth—population has doubled, from 500,000 30 years ago to 1 million today—coupled with the lack of a comprehensive urban expressway system, ultimately green-lighted the project.

The Confederation Line’s western half is built in a converted BRT (bus rapid transit) right-of-way. During the 1970s and 1980s, Ottawa had built an extensive BRT system, dubbed the Transitway. The western section of this was built on an abandoned Canadian Pacific line. Clearances, stations and bridges were designed for ultimate conversion to LRT, although after construction began, numerous rebuildings proved necessary. Part of the eastern section of the LRT is in the right-of-way of Highway 417.

The original plan was to lay tracks on streets through downtown Ottawa. However, strong objections from local merchants resulted in a 1.5-mile tunnel under Queen Street through this area. There are three underground stations, with 390-foot platforms. Surface stations are 300 feet long, with provision for future extension. The above-ground stations are quite elaborate, somewhat similar to Calgary’s LRT. The 34-car Citadis Spirit fleet represent the Alstom’s first North American LRV order. The carbodies were constructed at Alstom’s Hornell, N.Y., plant; final assembly occurred at OC Transpo’s Belfast Yard shop, in Ottawa. The facility is near the line’s approximate halfway point. The vehicles draw traction power from 1,500 VDC overhead catenary. The low-floor design and overhead power collection permit future on-street alignments.

The Confederation Line interfaces with the existing north-south OC Transpo Trillium Line (Line 2) DMU operation at Bayshore Station. However, the two operations are at different levels. Tremblay Station, just east of downtown, serves VIA Rail intercity trains.

An unusual feature of the Confederation Line is the use of a “guard” at stations, even December 2019 // Railway Age 27

ottawa confederation line with ATO. Before the driver pushes the start button to get under way after a station stop, the guard, positioned at the front of the train on the platform, checks to make sure the platform is clear. If the train is good to go, the guard blows a pocket whistle, giving the driver the all-clear. This is useful, because even though the trains are equipped with CCTV and external cameras, they’re very long (more than the length of a football field), and it’s sometimes difficult for the driver to monitor the entire platform. Ottawa transit users, used to short buses, are still adapting to frequent, fast rail service. So, use of a whistle-blowing platform guard is an effective, albeit quaint, safety practice.

View from the cab, looking east, at the Confederation Line’s western terminus at Lincoln Fields.

A westbound train pulls into underground Rideau Centre Station in Ottawa’s Central Business District.

28 Railway Age // December 2019

BUILDOUT TO 2025 It was always intended to extend the Confederation Line eastward and westward after the initial section was open. Ottawa City Council approval has been given, contracts awarded, and work has begun.

An eastward 13-km (8-mile) extension will take service to Trim Road, in Ottawa’s far eastern suburbs. It will be a surface alignment, in the median of Highway 174, and includes five new stations. Opening is scheduled for 2024.

A westward 15.5-km (9.5-mile) extension will add 11 stations. This line will split at Lincoln Fields Station. One branch, terminating at Baseline Road, will serve Algonquin College. The other, terminating at Moodie Drive Station, will serve western Ottawa. The latter will connect with the Southwest and West Transitways. A yard and light maintenance facility is planned near the Moodie terminal. Part of the route will be built in an existing Transitway, while other sections are to be tunneled. Opening is planned for 2025.

Maximum operating speed on the extensions will be 100 kph (62 mph).

The Trillium Line will be also be extended from its current terminus at Greenborough.

Just south of there, at South Keys, it will split. One segment will go directly into Ottawa International Airport; the other will terminate at Limebank. Stations will be doubled in length to 80 meters (262 feet) to accommodate on-order Stadler FLIRT DMUs or two existing Alstom Coradia LINT DMUs, which will operate in pairs.

An additional 38 Alstom Citadis Spirit LRVs have been ordered for Phase Two. The railwayage.com

ottawa confederation line first 13 are being assembled at the 16-acre Belfast Road shop, with the balance to be finished at Alstom’s new plant in Brampton, Ontario. This will allow Belfast Road to focus on day-to-day maintenance of the operational fleet.

A BIT OF HISTORY The Electroliners were a pair of streamlined, four-unit-articulated EMU (electric multiple-unit) interurban trainsets operated by the Chicago North Shore & Milwaukee Railroad between Chicago and Milwaukee. St. Louis Car Company built them in 1941. The Electroliners operated at speeds up to 90 mph. When the North Shore shut down in 1963, Philadelphia Suburban Transportation Co., known as the Red Arrow Lines, purchased and renamed them Liberty Liners. The trolley poles and steps were removed, new doors were added in the center coach sections, and third-rail contact shoes were installed for operation on the Philadelphia & Western (today’s Norristown High Speed Line), where they ran until 1978, when SEPTA retired them.

SelTrac™ was originally developed in the 1970s by Standard Elektrik Lorenz of Germany for the Krauss-Maffei Transurban, an automated guideway transit system proposed for the GO-Urban network in Ontario, Canada’s Greater Toronto Area.

Although the GO-Urban project was never built, the Transurban technology was acquired by an Ontario consortium led by the Urban Transportation Development Corporation (UTDC), and adapted to become its Intermediate Capacity Transit System (ICTS). This technology was first used on the SkyTrain network in Vancouver, B.C., and the Scarborough Rapid Transit in Toronto.

SelTrac™ was primarily supplied and developed by Alcatel, through a Toronto-based subsidiary. It is now supplied by Thales, after the company purchased many of Alcatel’s non-telecommunications assets. New versions have been developed for different markets, and today SelTrac™ is used for train control systems around the world. The original SelTrac™ system was based on inductive loops that provided a communications channel as well as positioning information.

In the newest, modular version, the control signal is transmitted at 2.4 GHz. Canadian Contributing Editor John Thompson contributed to this story. railwayage.com

OC Transpo Operations Control Center Manager Joel Lemieux explains the Confederation Line dispatching display. The Center controls all OC Transpo rail, bus and paratransit services.

The Alstom Citadis Spirit vehicles feature a user-friendly passenger information display.

December 2019 // Railway Age 29

FASTENERS Developed for multiple applications on freight railroads and transit lines, fasteners are the unsung heroes of the rail industry.

LIFE IN THE

BY ANDREW CORSELLI, MANAGING EDITOR

F

asteners can be the difference between a noisy train and a quiet one—or even the difference between a derailment and an on-time arrival. So sit back and enjoy a fasten-ating look at every railroad’s overlooked VIP. Freight vs. Transit Tracks for freight and transit take different types of fasteners. Most of the heavy-haul freight system in North America is predominantly wood-tie-based crossties, said Jeff Kondis, Manager, Strategic Marketing, L.B. Foster—he estimated the number at more than 90%. However, transit agencies, which

30 Railway Age // December 2019

are “a different animal,” are not typically wood-tie-based.

“The ones that we’re specifically focused on are those that provide resiliency that help with vibration and noise mitigation, as well as electrical leakage into concrete,” said Sarah McBrayer, Assistant General Manager, Transit Products, L.B. Foster.

“Some of ours are installed on wood ties, but for the majority, they’re installed on bridges and concrete ties. If electricity leaks into the concrete, it can degrade the rebar in the concrete crease. So the electrical isolation is very important.

“On bridges and in neighborhoods where the trains are operating close to

private property, noise and vibration control is very important. That type of requirement isn’t typically needed for a freight rail application. Sometimes on bridges they are, but usually in that sense the ductile iron casting or steel plate on top of a pad absorbs noise. Our fastener has two ductile iron castings consisting of a layer of vulcanized rubber bonded in between two ductile iron castings, all one piece. This helps with maintenance and replacement. It’s not multiple pieces in an assembly, so they just have to replace that one part. But that’s what allows for the noise and vibration mitigation and the electrical control.” railwayage.com

L.B. Foster

FAST(ENERS) LANE

FASTENERS Tim Brake, Vice President Sales and Marketing, Pandrol, concurred. He noted that transit crossties have different requirements, such as different toe loads and the aforementioned noise vibration—though he mentioned one exception: “Heavy-haul railroads are not really concerned about noise and vibration. It’s more about the durability,” he said. For example, Pandrol recommended Panguard fasteners for one of Metra’s Union Pacific -operated commuter lines in Chicago that sees heavy-haul freight and passenger trains. The problem involved damping down noise and vibration in a nearby office building. The Panguard, Brake said, “is sturdy enough to handle a heavy-haul freight, yet resilient enough to limit the amount of noise and vibration from freight train tonnage.”

L.B. Foster’s Kondis noted that the transit space has been “expanding very rapidly in the U.S. during the past few years. It’s been a good area of growth for L.B. Foster.” McBrayer added that one

reason for such growth is that there have been many expansion, rehabilitation and maintenance projects.

“Many transit rail fasteners are aging, as they have been in track for up to 40 years,” she said. “Our track fasteners have a typical life span of roughly 30 years.

Those are all coming up for renewal and replacement projects. Also, we were involved in a major [new-build] project about five or six years ago in Honolulu, where we installed all new track. Washington Metro has been building some major expansions (like the Yellow/Blue Line connection to Reagan National Airport). We were part of that. There’s a lot of movement at BART, the Chicago Transit Authority, Seattle Sound Transit.

They’re all experiencing a lot of growth doing expansion projects, as well as maintenance and rehabilitation projects.”

A Nice Tie-In McBrayer said that L.B. Foster deals mainly with transit agencies, as opposed to freight

rail. She told Railway Age that each transit agency “has its own specific requirements for fastening systems. During the past 35-40 years, there have been so many different developments across all the agencies. Right now, we have more than 50 unique direct-fixation fastener models that meet whatever specific customer needs are required by the agency.”

She added that L.B. Foster, which has been in the business for almost 40 years, has delivered more than 4 million fastener units to more than 30 transit agencies across North America, and has “been pretty much involved with almost every transit agency.

We were the original designer of the directfixation fastener.”

Brake said that Pandrol deals with freight, transit and even industrials, though it’s slightly in favor of freight.

Pandrol doesn’t produce spikes, he said, so its product line consists mainly of resilient fasteners and plates. Pandrol’s E-clips are the company’s best sellers, he noted, followed by SafeLok.

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FASTENERS Pandrol’s Panguard system suspends the rail from the web and fishing surface with resilient blocks held in ductile iron side plates that transfer the vertical load to the tie.

“Sixty-four percent of our market is E-clips,” he said. “As far as the market goes, we’re getting closer to 50%. We sell to all Class I’s and some short lines as well. We sell to all transit agencies. Pandrol fasteners are often written into specifications, and have been for several years.”

Brake added that Pandrol also offers installation equipment. “We have a line of Rosenqvist Rail clipping machines, for fastener installation. Rosenqvist Rail is a wholly owned subsidiary of Pandrol AB. The company offers ‘walk-behind’ clipping machines and fully automated, ride-on

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“We were working with Seattle’s Sound Transit to create a high-resilience fastener, and were successful,” she said. “Our design has now been approved by multiple agencies, and we’ve been in production.”

She added that L.B. Foster is also working on a fastener for closely spaced rails, such as those found in special trackwork.

“As special trackwork rails get closer together, you can’t fit a fastener designed for a single rail in between two rails,” McBrayer noted. “You have to have a fastener that can support two rails at varying angles and degrees.

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FASTENERS fasteners, for crossovers. That project has progressed from a single-rail fastener to the special trackwork areas. We’re continuing to expand that product line.”

In addition, L.B. Foster is approaching the next step for a new direct-fixation fastener for New York City Transit.

“We were approved, and we are now on the QPL (Qualified Product List) to supply that product to NYCT,” she explained. “We just submitted a bid for it [in November].

We are well on our way to moving forward on that project.”

McBrayer also said that, within the past year, L.B. Foster has designed, qualified and completed, and is about to move into production, on a four-anchor fastener design for the Chicago Transit Authority.

“It usually takes longer than nine months to qualify a fastener, but we expedited all of our efforts to meet some project deadlines for CTA,” she said. “That was huge for us this past year.”

Fasten-ating Future

railwayage.com

Pandrol’s Brake said that, although there may be updates and new products, “there’s always going to be a need for fasteners.

Pandrol has fasteners for concrete ties and fasteners for wood ties; that’s why we created the Victor Plate. We also created the Pandrol Rolled Plate, so our customers can have resilient fasteners for wood ties. We’re always continuing to innovate, to come up with new and advanced solutions to meet customer requirements.”

The Victor Plate “combines the durability of an AREMA tie plate with the durability of Pandrol’s line of resilient fasteners,” as the company describes this product. “It features a maximum plate bearing area with an asymmetric design (asymmetrical toward the field side); a 37% greater bearing area than existing tie plates with resilient fastenings, which results in a significant reduction in plate cutting; a significant reduction in gage widening under load; and shoulder pullout strengths well in excess of AREMA specifications for concrete tie

shoulders. It provides all of the advantages of resilient fastenings, including holding power, prevention of rail rollover and reduced maintenance.”

The Victor Plate is available for use with E-clip, FastClip and ROLLBLOCK™ designs. The special ROLLBLOCK™ option “virtually eliminates rail rollover.”

Bob Coats, Vice President Research and Development, Pandrol, agreed with Brake. “I don’t see any huge changes on the horizon,” he noted. “By their nature, fasteners change slowly because it takes a lot of time to get products tested and approved.”

Brake added, “I think the railroads are looking for more of a wider bearing. That’s why we developed the Safelok III Wide, because our customers are looking for a wider shoulder to help the rails carry very heavy loads.”

Coats said it best: “There’s definitely a trend to making more durable products that require less track time to maintain.”

December 2019 // Railway Age 33

ANALYTICS

Artificial Intelligence FOR

Ops testing Moving toward a predictive analytics approach for railroad safety and compliance with an intelligent operational testing system (iOTS).

F

reight railroads, regardless of size, are always working toward the goal of zero accidents. Through consistent, effective operational testing, rail employees are held accountable to safety procedures that comply with FRA safety rules and regulations.

But while the road to safety may be paved with good intentions, it can also be complicated by a lack of visibility into how safety standards are enforced enterprise-wide, or how effective your operational testing program is. What’s causing this?

Operational (ops) testing is nothing new for Class I, short line and regional railroads in North America. Mandated by FRA, railroads must ensure that their employees are complying with procedures that create a

34 Railway Age // December 2019

BY RAJEEV KAK, CLOUDMOYO safe work environment.

But over time, accidents and incidents occur. They pile up—to the point that 39% of accidents and incidents from 2013-2017 were due to human error. There may be a higher rate of accidents in one geographic location or due to conductor errors, but how do you know? Since the ops tests are conducted and captured on paper spreadsheets, the task of sifting through files and trying to make sense of all the data without a tool to facilitate insights is daunting. It’s hard to tell if testing officers are meeting quotas, and you may suspect that testing is more reactive to upcoming audits or following accidents, as opposed to empowering employees to predict and stay prepared for the next inspection. But there is an alternative approach to ops testing that ensures

that good intentions align with measurable, trackable results.

With intelligent ops testing, leveraging business intelligence (BI) and data analytics, testing optimization, artificial intelligence (AI) and machine learning (ML), freight railroads can identify and respond to trends to ensure more effective, efficient and compliant ops testing.

Intelligence takes your ops testing program further than checklists and to-do’s conducted on a (hopefully) regular basis.

For example, BI and analytics dashboards help you monitor safety parameters far better than manually, scanning through paper sheets containing rows of data.

There’s a shift from time-consuming testing to repeatable, trigger-based test plans.

There are several ways you can add railwayage.com

ANALYTICS intelligence to your ops testing: 1. Set up a strong data management process. Gather and store measurable ops testing data in a Cloud environment for accessibility and analysis.

2. Conduct trend analysis: Once you’ve migrated data to the Cloud, you can leverage data analysis to identify trends and patterns, and then respond to trends in your ops testing. You’re using your data to make smart business decisions, not just safety decisions. Where are you allocating your resources, be they money or manpower? You’ll be able to see where test failures are periodically occurring by location, role, time of day, weather conditions or employee. With trend analysis, you can harness analytics to optimize your inspection allocations, increasing inspection frequency where risks are high.

3. Respond to AI/ML recommendations: AI and ML capabilities can enable reporting for senior leadership, making your safety story clearer. You can also get recommendations to focus on departments or territories and see where compliance breaches are happening more often historically, and then predict where and when safety incidents are likely to occur, based on causal factor correlations and historical trends.

Bringing together what-if scenarios that help you optimize your testing and AI/ML algorithms to provide intelligent recommendations, railroads can move from minimum to intelligent ops testing, resulting in comprehensive test plans, better test schedules and enhanced employee and department tracking. Applying this approach to ops field testing leads to higher enforcement and efficiency (thus, cost savings) of ops testing and safety procedures, reduced penalties and increased safety.

culture that it’s almost cliché to say that rules are there for a reason—but they are.

For a railroader, surrounded by giant equipment, one small slip can cause a damaging swipe of the big machines. This can pose a huge safety risk for humans and equipment.

Either way, the cost of error is high.

Because of this, FRA has mandated ops testing and safety enforcement rules that employees need to follow to ensure that a railroad can run securely and safely. Ops testing is a tool that helps ensure employees are aware of the rules applicable to their duties, ensuring compliance and helping them avoid penalties associated with violations.

KCS made it a top priority to start ops testing digitalization with centralized record keeping and easy retrieval of historical records—an iOTS (intelligent ops testing system). It wanted to make sure that the data needed for audits and regulatory compliance was available without chasing multiple repositories of test execution data across a complex maze of hierarchies and locations.

This would also ensure all employees are regularly certified and able to work in compliance with FRA regulations, adhering to the General Code of Operating Rules (GCOR) and territory-specific rules or guidelines, all by directly importing the test libraries into their master test programs.

Having data in a central Cloud could also enable better planning of tests, testing frequency, quota planning and accounting for test plan regionalization.

Once we had all the ops test data centralized, analyzing it—by employee, role, location, time of day, test type, top failures, seasonality—was simple. We worked with

KCS to create insights using dynamic dashboards, giving them near-real-time viewing of test program parameters. Trend analysis helped KCS understand the current situation and supported the decision-making process for planning test programs, responding to the data by, for example, increasing test frequency where failures were higher.

Because the iOTS solution was integrated with other enterprise applications like SAP and HR systems, we were assured consistency across relevant platforms that helped enhance compliance, recordkeeping and overall effectiveness of the ops testing plan.

The iOTS user interface was specifically designed to speed onboarding of new testers. It delivered a guided interface so that testers could complete their tests by following intuitive prompts and workflows the system generated and complete field work using mobile devices, tablets and laptops.

The advance notifications capability that was programmed to alert testers about upcoming tests, schedules and approaching deadlines was very well received.

A Predictive World As we look to the future, we can apply predictive analytics algorithms to the piles of safety testing and Big Data, and go beyond FRA mandates to intelligently identify causal factor correlations. The goal would be to predict which employees will have the tendency to not wear safety glasses at night, for example. Ops testing moves from a reactive position to a predictive process that takes safety initiatives to the next level. So get on the (rail) road to safety—start the journey toward an iOTS.

Field Testing With KCS Kansas City Southern (KCS) is one of today’s innovative, visionary railroads. Recognizing the value of applying leading-edge, innovative technologies such as Cloud, Big Data analytics and ML, KCS partnered with CloudMoyo to leverage these technologies to drive improved efficiency of ops testing.

KCS’s journey started with the recognition that rules and railroads move hand in hand. KCS is so enmeshed in railroad railwayage.com

December 2019 // Railway Age 35

People / 100 years / Events derek ollmann Montana Rail Link

High profile: Derek Ollmann was named President of Mon-

tana Rail Link (MRL) last month. He succeeds Stacy Posey, who stepped down for personal reasons. Ollmann, who has been in the railroad industry for more than 20 years, most recently served as President of Southern Railway of British Columbia (SRY). He obtained his Certificate of Management from Simon Fraser University and his MBA degree from Royal Roads University. He is a member of several Railway Association of Canada committees, including Operations, Regulatory and Safety. “I have long admired MRL and am honored to lead the company at this important juncture,” Ollmann said. “With its strong position in the industry and talented team of more than 1,200 employees, it is an exciting time to be joining MRL. I have been fortunate to be part of the Washington Companies family for 20 years, most recently as President of SRY, and I am pleased to remain part of this exceptional group of companies.”

CN

last month announced that Executive Vice President and Chief Information and Technology Officer Michael Foster left the company “for personal reasons, moving back to the U.S. to be close to his family and to pursue other career opportunities.” CN Executive Vice President and Chief Operating Officer Rob Reilly will assume interim responsibility for the Information and Technology function while the company carries out a global search for a Chief Information and Technology Officer. Reilly, CN noted, “gained leadership and innovation experience in rail operations and field application of rail technologies at BNSF, at which he worked for 30 years in a variety of roles. He will continue to aim to deliver on operational excellence and the implementation of advanced information technologies as a driver for safety, customer and shareholder value, and the company’s strategy to enhance its scheduled railroading model.”

Sylvia I. Garcia has joined WSP USA as principal consultant for public finance

policy. Based in the firm’s Chicago office, she will work with transportation and infrastructure clients, including transit, rail, highway, toll and multimodal agencies.

Garcia most recently served as Chief Operating Officer and Chief of Staff at the Chicago Transit Authority. Prior to CTA, she served as CFO and Assistant Secretary for Budget at the U.S. Department of Transportation.

Jackie (Jack) Wells Matthews, founder and CEO of JMA Railroad Supply Company of Seymour, Ind., died Oct. 3, 2019 at his home. Born Feb. 9, 1945, Matthews earned an MBA from Butler University and devoted his career to helping companies by introducing and promoting their products to the railroad industry. A member and strong supporter of ASLRRA and RSI for more than two decades, he founded three other companies: EngineAir Inc., JMA Rail Products Co. and New Vision Manufacturing Co. All three companies focus on supplying quality components to the short line and Class I railroads.

100 years ago in railway age DECEMBER 1919

A Radical Departure in Freight Car Door Fixtures One of the trying problems which railway employees have to face is that of opening freight car doors without damage to the doors. A new device which is intended to overcome this difficulty is the Jerry Loc-Lever. The Loc-Lever works on the leverage principle and when applied takes the place of the locks, hasps and starters. The iron bar which forms the lever proper is suspended from the side plate of the car by a bolt and reaches a point a few inches below the lower edge of the car door.

36 Railway Age // December 2019

DECEMbER 11-12, 2019

Big Data in Railroad Maintenance Planning Conference University of Delaware Newark Campus klakofsk@udel.edu. https://outreach.engr.udel.edu/ professional-development/conferences/ big-data-in-railroad-maintenanceplanning/

January 14-16, 2020

midwest association of rail shippers Winter Meeting The Westin Lombard Yorktown Center, Lombard, Ill. https://www.mwrailshippers.com/ event/mars-2020-winter-meeting/

January 23-24, 2020 Southwestern Rail Conference

Magnolia Hotel – Park Cities/SMU, Dallas aylor@texasrailadvocates.org. http://texasrailadvocates. org/2020-southwestern-railconference/

January 28-30, 2020

AAR 32nd Annual Quality Assurance Auditor and Industry Conference Hilton Fort Worth https://transportationtechnologycenter. configio.com/pd/958/ aar-qa-2020-quality-assuranceconference-beginning-2020-01-28-infort-worth-tx?returncom=productlist

March 10, 2020

Next-Gen Freight Rail, presented by Railway Age Union League Club of Chicago conferences@sbpub.com https://www.railwayage.com/ngfr/

June 17-18, 2020

Rail Insights 2020, presented by Railway Age Union League Club of Chicago conferences@sbpub.com https://www.railwayage.com/ insights/ railwayage.com

Products industrial air impact tools

H

Southco Lever Latch With Visual Indicator Southco, Inc., a global leader in engineered access solutions, has added a new version to its successful C2 Lever Latch product line that provides the same consistent compression and vibration resistance as the standard C2 series, but features a color coded access indicator that allows the user to see if the latch has been opened.

The C2 Lever Latch with Visual Access Indicator features a small, color-coded window that can be viewed to monitor latch status. When the window shows green, the latch has not been opened since it was last reset. If the latch is opened, the window will turn from green to red, signaling that the latch has been actuated. The indicator remains red in subsequent opening or actuation. The red indicator can be reset back to green with a simple 90-degree turn of the tool recess security key.

Designed for simple, one-handed operation, the C2 series features a flush-mounted design and a built in handle. The C2 series delivers high mechanical performance and compensates for misalignment, delivering a robust life cycle. Additionally, the C2 with Visual Access Indicator can be installed in the same panel prep as the current C2 series, simplifying application upgrades, and is available with key or tool locking options for increased security. Further, the new C2 comes with an integrated bumper to provide scratch-free engagement with frame to protect its decorated or coated finish. railwayage.com

Global Product Manager Loc Tieu says, “The C2 Lever Latch with Visual Access Indicator offers the same consistent operation as our standard C2 series, but provides the added benefit of visually monitoring latch status. By allowing the end user to see if the latch has been actuated, the C2 Lever Latch with Visual Access Indicator saves the end user unnecessary time spent opening the enclosure to verify the enclosure contents.”

Southco, Inc. is a leading global designer and manufacturer of engineered access solutions. From quality and performance to aesthetics and ergonomics, we understand that first impressions are lasting impressions in product design. For over 70 years, Southco has helped the world’s most recognized brands create value for their customers with innovative access solutions designed to enhance the touch points of their products in transportation and industrial applications, medical equipment, data centers and more. With unrivaled engineering resources, innovative products and a dedicated global team, Southco delivers the broadest portfolio of premium access solutions available to equipment designers throughout the world.

For more information about Southco’s C2 Lever Latches, visit www.southco.com, email the 24/7 customer service department at southco.com/contact/en, call 610-459-4000 or fax your inquiry to 610-459-4012.

y-Tech Engineered Solutions has introduced ATP MAGNUM FORCE™ Industrial Air Impact Tools, featuring the highest torque outputs and power-toweight ratios available today in the ¾, 1, and 1-1/2-inch drive class of tools.

This completely new series of Super Duty industrial impact tools is designed specifically to deliver higher productivity in the most demanding environments, including refinery turnarounds, power generation outages, structural steel erection, mining and other similar bolting applications.

Made in the USA to the most exacting quality standards, ATP MAGNUM FORCE™ Impact Tools feature corrosion-resistant internal moving components for continuous high performance in high-moisture, corrosive environments that send other impact tools to the repair bench. Maximum non-bias torque output along with the superior durability of a twin hammer mechanism mean ATP MAGNUM FORCE™ tools will stay on the job, eliminating costly downtime. The ATP Magnum Force™ tools are CE approved for global sales.

The ATP MAGNUM FORCE™ series features 16 standard models featuring twin hammer mechanisms; available square and spline drive anvils; pistol grip and inline straight tools; and available inside and outside trigger configurations.

This new line further strengthens the Hy-Tech / ATP product line, offering the world’s broadest offering of industrial impact tools as well as more than 20,000 replacement parts for many recognized leading OEM brands.

For additional information, contact Hy-Tech Engineered Solutions at 800245-1148; www.hy-techinc.com.

December 2019 // Railway Age 37

equipment Sale/Leasing

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ALL MAJOR CREDIT CARDS ACCEPTED

RAIL NEWS DELIVERED TO YOU AT HIGH SPEED RAIL GROUP NEWS brings you a daily round-up of news stories from Railway Age, RT&S, and IRJ. This email newsletter offers North American and global news and analysis of the freight and passenger markets. From developments in rail technology, operations, and strategic planning to legislative issues and engineering news, we’ve got you covered.

RAIL From Railway Age, RT&S and IRJ GROUP http://bit.ly/rail_news NEWS RA_RailGroupNews_Half_HighSpeed_2019.indd 1 38 Railway Age // December 2019

ROUND-UP of NEW

RAILWAY

3/4/19 1:03 PM railwayage.com

Ad Index Company

Phone #

cit

Fax #

URL/Email Address

Page #

212-461-5781

212-461-5632

James.Spencer@cit.com

C2

L.B. Foster Co.

412-928-3506

412-928-3512

glippard@lbfosterco.com

31

Loram Maintenance of Way Inc

763-478-6014

763-478-2221

sales@loram.com

18-19

next-gen train control

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conferences@sbpub.com

3

Pandrol USA, L.P.

800-221-CLIP

856-467-2994

Plasser American Corp

757-543-3526

757-494-7186

plasseramerican@plausa.com

14-15

Progress Rail, A Caterpillar

256-505-6402

256-505-6051

info@progressrail.com

16-17

Rail Insights

212-620-7205

212-633-1165

conferences@sbpub.com

12

railway educational bureau

402-346-4300

402-346-1783

bbrundige@sb-reb.com

32,C3

SMBC Rail Services LLC

312-559-4800

888-RAILCAR

sales@smbcrail.com

25

trainyard tech llc

724-443-8881

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20

trinity rail

800-631-4420

trinityrail.com

C4

33

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 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, KY, Jon Chalon 88 Pine St., 23rd Floor New York, NY 10005 (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 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

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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 Jennifer Izzo 800 Connecticut Avenue, Norwalk, CT 06854 203-604-1744 Fax: 203-857-0296 jizzo@mediapeople.com

AILWAY GE December 2019 // Railway Age 39

Perspective

Amtrak vs. Freights: Shippers, You Are Impacted!

U

.S. Sen. Dick Durbin (D-Ill.) has introduced a bill that would allow Amtrak to sue the freight railroads for preventing Amtrak from meeting suitable on-time performance standards. The senator alleges, “By empowering Amtrak to hold the freight railroads accountable ... we can improve Amtrak’s on-time performance and save taxpayer dollars. The people of Illinois— and Amtrak riders nationwide—deserve assurance that they can arrive at their destination in a safe and timely manner.”

Realistically, the risk is that the freight shippers who use railroads will actually pay the price burden. Railroad companies could write penalty checks to Amtrak if this is enacted into law and then enforced.

The theory of this column is that priority shipper freight will instead be delayed. That will be the price paid. Shippers, consider this brief as your alert message.

By the numbers, here are approximate ranges of delay costs per hour that various train types face. It’s a theoretical time value, using logistics and time delay analytics. The numbers represent relative values: • Amtrak: $300.

• Amtrak Passenger: $30.

• General Merchandise Freight: $500 • Customer Freight/Gen. Merchandise Car: $50.

• Intermodal: $800.

• Customer Freight/Intermodal Unit: $150.

• Express Intermodal: $1,000.

• Customer High-Value/Intermodal Unit: $500.

When broken into per-hour costs, the implied dollar spread shows that it is freight customers who pay fully allocated

per-hour train delay cost

intermodal

$500 40 Railway Age // December 2019

costs for all of the rail company track and dispatching capacity. Amtrak pays only a fractional percent of what we call avoidable railroad company costs. The Amtrakestimated value of its long-distance trains has a relatively low delay time under these logistics assumptions.

What about Amtrak’s asserted profitability? Amtrak’s overall income statements reflect a continuing long-term “going concern” loss. Translation? Amtrak says it loses money on most of its intercity routes—even where its trains use the rail freight tracks at a discount price.

Said differently, as Amtrak approaches its 50th year of subsidized life, it’s still financially dependent upon a low-trackuse discounted price—a low price set by Congress for freight railroads as a condition of relief from those passenger train losses occurred a lifetime ago.

A lifetime ago? Yes. In economic terms, many economists consider 50 years to be “forever” from a risk analysis point of view.

That part of the grand bargain a half-century ago? The part for Amtrak profitability? Never happened. Only the discounted somewhatransom-like track use fee seems to live on.

What are the consequences if Amtrak wins its case? Freight railroad train dispatchers will have to put freight shipments “into the hold track.” Shippers actually will bear that delay cost. Are shippers paying attention?

The above costs are representative. Shippers, do you know what your delay costs actually are? How much delay might each of you be willing to absorb for Amtrak before you switch mode to truck?

Who is addressing these shipper-risk questions? Not Congress. Not the Surface Transportation Board. Have the freight railroads discussed this potential exposure with their customers? Probably not.

Agreed, the above represents contrarian thinking about Amtrak passenger train delay. Perhaps that’s exactly what’s needed before a policy or a legal decision gets made.

We are talking about comparative logistics.

Isn’t this shipper impact a bit aggressive?

Not if your supply chain exposure is high.

As a railroad customer, have you assembled your delay cost numbers? Have you

who is addressing shipper-risk questions?

Not Congress.” calculated your exposure?

Shippers, if you’re a major rail customer, you can’t depend on the above examples.

You need real “inside numbers” arrayed against projected Amtrak delay dollars.

Protecting Amtrak as rail freight market share declines is the other side of this public policy issue. Back in the 1970s, rail freight market share was about 20% or more of tonnage and shipper freight payments, higher for commodities like coal. But coal is clearly fading. Today, as Amtrak becomes more insistent on its track priority rights, the supporting freight customer share moved by rail is in some cases down to about 10%. For some of the highest-value freight shipments, it’s calculated by some experts at less than 3%.

Squeezing the freight railroads while they face such market shifts isn’t prudent public policy. Instead, why not invest government capital for building dedicated Amtrak train schedule recovery tracks (passing sidings and improved signaling).

The outlook for continued passenger train costs shifting to the rail freight carriers and their customers seems short-sighted.

Shippers, it’s best that you not be bystanders in this public policy struggle.

Jim Blaze Contributing Editor

railwayage.com

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