Railway Age February 2018

F E B RUARY 2 0 1 8

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

uncertainty on the

hill From the Capitol to the White House, Mixed Signals

10 Under 40

Railway Age’s Fast Trackers

M/W Focus

Lubrication, Friction Management railwayage.com

August 2017 // Railway Age 1

CONGRATULATIONS to Kansas City Southern Vice President Investor Relations

Ashley Thorne on being honored

by Railway Age as a FAST TRACKER 10 Rising Industry Stars Under 40

kcsouthern.com

AILWAY GE

AUGUST 2017 FEBRUARY 2018

27 FEATURES

12

Uncertainty on The Hill

16

Fast Trackers: 10 Under 40

27 31

The 2018 legislative landscape

Our annual award-winners

M/W Focus: Lubrication Solutions for sticky situations

TTCI R&D: Hot Topic How braking affects wheels

DEPARTMENTS 4 6 7 33 33 33 36 37 38 39

Industry Indicators Industry Outlook Market People 100 Years Ago Meetings

NEWS/COLUMNS 2 8 11 40

From the Editor Update Financial Edge Short Line & Regional Perspective

Products Advertising Index

On the Cover:

Professional Directory

The railroa d industry faces tough issues with a divided government.

Photo: Shutterstock/Tono Balaguer

Classified

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February 2018 // Railway Age 1

FROM THE EDITOR

AILWAY GE Subscriptions: 800-895-4389

Murphy’s Law at NJ Transit

A

s is the tradition in New Jersey, the state I’ve called home since birth, the incoming governor 1) trashes New Jersey Transit and 2) proceeds to “fix” everything by cleaning house and starting fresh. This political circus has been going on since the state took over a collapsing commuter rail system in the early 1980s. So what else is new?

This time, the circus turned into a virtual freak show. Before he even took the oath of office and set foot in the Statehouse in Trenton, New Jersey Governor Phil Murphy, a Democrat (and in my state, whether you’re blue or red doesn’t matter, because incivility is bipartisan) proceeded to place said foot in mouth by convening a press conference at Penn Station New York, where he called NJT a “national disgrace.”

This was revolting, demoralizing and mean-spirited, especially to the thousands of hardworking NJT employees dealing with difficult circumstances, among them a rail system in need of a major capital infusion, and burdened with having to operate a major portion of its services as a tenant on Amtrak’s decaying Northeast Corridor.

The true disgrace, in this case, was Murphy’s pontificating. But it gets better.

Prior to taking office, Murphy and his transition team proceeded to send letters to approximately two-dozen senior NJT managers, asking them to submit their resignations. This was clearly a case of the

governor-elect overstepping his bounds.

Jettisoning the existing Executive Director?

That’s expected. But sticking a broom into headquarters to sweep away experienced people charged with running the system on a day-to-day basis? That’s unconscionable.

To be fair, some of those forced resignations were justified. Those were the political cronies of outgoing Gov. Chris Christie, practically all of whom held high paying jobs for which they were unqualified, and had no business occupying.

So where does NJT go from here? Is there a light at the end of the train tunnel?

On Jan. 30, it appeared that way, when Murphy announced the nomination of an experienced transportation pro to serve as NJT Executive Director: Kevin S. Corbett, Vice President of Strategic Development at AECOM. There, Corbett had an oversight role on critical projects including Amtrak’s Gateway Project, the first phase of New York City’s Second Avenue Subway, work on Penn Station New York, and PATH restoration after Superstorm Sandy.

Now it’s time for Murphy to stop blowing his air horn, vacate the locomotive cab and allow Kevin Corbett and the good people at NJT to do their jobs, without political meddling, and without taking credit for every improvement. Think he can do that? I’m not holding my breath.

WILLIAM C. VANTUONO Editor-in-Chief

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Industry Indicators In 2017, Modest Gains for U.S. Carloads as Trailers Surprise Class I railroads continued to adjust to a new reality in 2017 as far as commodities were concerned, while seeing good signs in what was an otherwise stagnant market for some segments. Coal seemed to arrest its long decline in what may or may not reflect confidence in policies of the Trump Administration as well as increasing export volumes. Crude oil stopped its slide as global prices ticked upward and renewed activity in drilling helped pump up sand shipments by rail. Intermodal picked up some of the slack, although surging trailer traffic more than doubled the gains of containers for the year.

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

Total employees: 145,416 % change from DEC. 2016: -3.19%

Transportation (train and engine) 60,466 (1.66%)

TRAFFIC ORIGINATED CARLOADS

Four WEEKS ENDING DEC. 30, 2017

MAJOR U.S. RAILROADS

by Commodity

DEC. ’17

DEC. ’16

% CHANGE

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

85,444 3,401 35,649 23,353 125,705 40,996 329,996 4,535 12,135 23,688 26,426 16,708 33,916 13,342 61,902 83,424 125,769 27,680 19,304 21,507

90,986 3,620 36,583 22,968 121,428 40,724 328,680 4,524 11,361 23,422 19,551 16,559 32,962 12,499 64,527 67,792 107,999 24,118 18,945 20,155

-6.1% 6.0% -2.6% 1.7% 3.5% 0.7% 0.4% 0.2% 6.8% 1.1% 35.2% 0.9% 2.9% 6.7% -4.1% 23.1% 16.5% 14.8% 1.9% 6.7%

Total U.S. CarLoadS

998,168

973,562

2.5%

307,774

292,323

9.3%

1,305,942

1,265,885

3.2%

Executives, Officials, and Staff Assistants 8,124 (-9.59%)

CANADIAN RAILROADS

Professional and Administrative 12,151 (-7.41%)

COMBINED U.S./CANADA RR

total carloads

Maintenance-of-Way and Structures 32,454 (-5.67%) Maintenance of Equipment and Stores 26,596 (-6.01%) Transportation (other than train & engine)

5,625 (-5.02%)

Source: Surface Transportation Board

CLASS 1 railroads CONTINUE PURGE OF EXECUTIVE RANKS Do railroad executives have a target on their backs? While linehaul trains continue to get longer, so did the list of those employees in the corner office getting pink slips in December, as the biggest railroads continue to pursue a lean and mean strategy on and off the tracks. The other job categories weren’t far behind in a mostly yearlong downward trend, save for TransportationTrain & Engine. Total rail employment declined by just over 3% for the year.

4 Railway Age // February 2018

Intermodal

FOUR WEEKS ENDING DEC. 30, 2017

MAJOR U.S. RAILROADS

by Commodity

DEC. ’17

DEC. ’16

% CHANGE

112,829 953,136 1,065,965

101,126 910,859 1,011,985

11.6% 4.6% 5.3%

3,791 253,664 347,914

3,556 215,738 303,015

6.6% 17.6% 14.8%

Trailers Containers

116,620 1,206,800

104,682 1,126,597

11.4% 7.1%

TOTAL COMBINED UNITS

1,323,420

1,231,279

7.5%

Trailers Containers TOTAL UNITS

CANADIAN RAILROADS Trailers Containers TOTAL UNITS

COMBINED U.S./CANADA RR

Source: Monthly Railroad Traffic, Association of American Railroads

railwayage.com

TOTAL U.S. AND CANADIAN CARLOADS, DEC. 2017 VS. 2016

1,305,942 DEC. 2017

AILWAY GE

1,265,885 DEC. 2016

Short Line And Regional Traffic Index CARLOADS

by Commodity

ORIGINATED DEC. ’17

ORIGINATED DEC. ’16

% CHANGE

45,417 22,523 24,816 10,932 25,371 5,889 8,282 2,471 15,650 8,360 1,536 1,973 16,417 36,263 8,753 82,615

42,236 20,688 18,851 10.440 26,281 5,671 7,381 2,849 13,756 7,813 1,797 1,828 16,005 52,091 8,595 77,610

7.5% 8.9% 31.6% 4.7% -3.5% 3.8% 12.2% -13.3% 13.8% 7.0% -14.5% 7.9% 2.6% -30.4% 1.8% 6.4%

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 Trailers / Containers Waste and Scrap Materials All Other Carloads

Copyright © 2018 All rights reserved.

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted) 360,000 340,000 320,000

2006 (peak year) 2015

300,000

ARE YOU A RAILROAD OR SUPPLIER SEARCHING FOR JOB CANDIDATES?

2017

280,000 260,000

Visit http://bit.ly/railjobs

240,000 220,000

2016

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

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

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To place a job posting, contact: Jeanine Acquart 212-620-7211 jacquart@sbpub.com February 2018 // Railway Age 5 RA_JobBoard_1/3Vertical.indd 1

8/17/17 10:59 AM

Industry Outlook

MTA Orders 535 New R211 Cars THE New York Metropolitan Transportation Authority plans to spend more than $1.4 billion to purchase 535 new R211 subway cars to replace the oldest cars operating on its lettered lines.

The initial order with Kawasaki Rail Car Inc. was approved by the NYMTA Board of Directors Transit Committee Jan. 22, and the Japan-based company could eventually design and build a total of 1,600 cars for more than $3.6 billion over the coming decade.

The first new R211 test cars are scheduled to be delivered by mid-2020, part of an order that includes 440 standard closedend cars and 20 open-gangway test cars with through-vestibules for New York City Transit, and 75 new cars for the Staten Island Railway. The design for the new cars features wider doors, closed-circuit surveillance cameras, new lighting and color schemes, and improved digital displays.

The NY MTA showed off a mockup of the open-gangway car—a design used in Europe and Toronto and favored by New York Gov. Andrew Cuomo, to add capacity—in December 2017.

The order is the first major equipment purchase under new NYCT President Andy Byford, a native Briton who was hailed for his work leading the Toronto Transit 6 Railway Age // February 2018

Commission, and who served in senior transit posts in London and Sydney.

Reports said that under the terms of the contract to be voted on by the full board January 24, the MTA has an option to have Kawasaki build about 1,100 more cars at a cost of $2.2 billion by the end of 2027.

The R211s will replace R42 cars dating to 1969-70, and some R32 cars, which are more than 50 years old and the oldest in regular passenger service on the system. They will be built at Kawasaki’s facilities in Yonkers, N.Y., and Lincoln, Neb. The new deal with Kawasaki comes after NYMTA in 2012 placed a $599 million order with Bombardier of Canada for new R179 cars. The test cars arrived two years behind schedule and experienced a number of failures soon after delivery.

The contract with Kawasaki includes penalties for late delivery, and the builder has agreed to beef up its warranties on certain parts and systems.

The R211 order is part of the NYMTA’s record $29.5 billion Capital Plan, which includes more than $14 billion for New York City Transit. The agency is expediting the delivery of 300 new R179 subway cars with the first having arrived in late 2017 and all being delivered by September 2018.

The California High-Speed Rail Authority named Brian P. Kelly as its new Chief Executive Officer, the same day it received a new report that found delays and higher-than-expected costs would inflate the price of the project by $2.8 billion.

Kelly’s hiring comes as CHSRA is progressing from the planning phase of the state’s high-speed rail system toward the full construction phase.

The authority said Kelly’s compensation is $384,984.

Delays and higher-than-expected costs are driving the anticipated price of construction in the central San Joaquin Valley by more than one-third, to about $10.6 billion, up from the authority’s 2016 estimate of $7.8 billion for the 119-mile section from Madera to Bakersfield in the central San Joaquin Valley. The first phase is planned as the backbone of a route connecting San Francisco and Los Angeles, with train speeds of 220 mph.

The nine-member board unanimously approved Kelly, whose appointment was effective Feb. 1. He succeeds Jeff Morales, who resigned in June, 2017. Kelly previously served as secretary of the California State Transportation Agency since it was established in 2013.

About $725 million of the project’s cost increase is due to ongoing problems in purchasing property needed for the right-of-way through the San Joaquin Valley. That involves having to buy more parcels than originally forecast, as well as paying more than expected for individual properties.

Construction delays account for about $325 million, as well as $450 million for barriers to separate highspeed and freight. Additional costs of $600 million are associated with agreements with outside agencies including utility companies, cities, and counties.

An additional $1 billion is now forecast for other items, including the increased cost of track construction and operating systems. railwayage.com

Metropolitan Transportation Authority / Patrick Cashin

CHSRA: New CEO, $2.8B in Overruns

Market GE Transportation “Moving” in Brazil GE Transportation’s Contagem, Brazil, locomotive assembly plant is operating with a mixed-model moving assembly line, which GE calls “a new approach to manufacturing locomotives.”

“This Lean Manufacturing system, one of the first in the industry, is a more efficient and sustainable approach to locomotive production,” GE says. “Unlike traditional stationary production lines, the mixed-model moving line is designed for employees to assemble different locomotive configurations on the same line as the units slowly move down the track. This new production system enables the plant to increase productivity and optimize the workforce, as well as reduce lead time and inventory.”

WORLDWIDE Agreement has been reached between all major parties in the Danish Parliament to go ahead with the procurement of up to 250 EMU (electric multiple-unit) trainsets, which will form the backbone of the country’s main line rolling stock fleet. The agreement will enable Danish State Railways (DSB) to launch tenders for a framework contract to supply and maintain a minimum of 90 trainsets, the first of which will be delivered at the end of 2023. Under DSB’s Future Train program, the contract will include a Full Service Agreement (FSA),

giving the supplier full responsibility for maintenance of the fleet. The trains will replace DSB’s ageing IC3 DMUs and IR4 EMUs, as well as the ill-fated fleet of AnsaldoBreda IC4 DMUs.

NORTH AMERICA An ACS Group/Hochtief-led consortium has been selected as recommended developer for a $1.95 billion public-private partnership (PPP) project to build an automated people-mover at Los Angeles International Airport and operate it for 25 years. The consortium comprises ACS Infrastructure Development and Hochtief PPP Solutions, each with an 18% stake, plus Dragados USA, Flatiron, Fluor, Balfour Beatty, and Bombardier, which will supply 44 cars.

The roller-coaster-ride story of the Toronto Transit Commission’s 204-unit Bombardier Flexity Outlook light rail vehicle order appears to be leveling off. Bombardier told Railway Age in January that it expects to deliver all 204 LRVs by year-end 2019, the contract’s original

railwayage.com

deadline, and is making steady progress catching up to the original delivery schedule, even though just 59 LRVs had been delivered by year-end 2017 (the original schedule called for 148). The carbuilder said it has overcome the supply chain problems it has cited as the primary reason for the delays.

The first of the new Flexity Outlook streetcars entered service on TTC’s 510 Spadina line on Aug. 31, 2014. The TTC has been forced to overhaul some of its Canadian Light Rail Vehicles and Articulated Light Rail Vehicles, which vary between 30 and almost 40 years of age, to try and fill the gap. The agency said it hopes to recover the costs of doing so from Bombardier. Meanwhile, the non-overhauled LRVs have been failing at an alarming rate, forcing the TTC to replace some runs with buses. About 40 of the CLRVs have been retired, with some of them scrapped; several of the ALRVs are also gone, as they were considered beyond reasonable repair. Bombardier has also been experiencing problems delivering Flexity vehicles for several new-build projects to Metrolinx, the agency responsible for public transportation in the GTHA (Greater Toronto-Hamilton Area). TTC is mostly independent from Metrolinx).

February 2018 // Railway Age 7

Update

Lac-Mégantic verdict: Not guilty

A

Quebec jury on Jan. 19 returned a not guilty verdict in the trial of three railroad employees charged in the July 2013 runaway oil train derailment and fire in the lakeside resort town of Lac-Mégantic that claimed 47 lives and destroyed the historic town’s downtown core.

The verdict means that no person, corporation or government agency will be held criminally negligent for the tragedy, at least not for the foreseeable future.

Montreal Maine & Atlantic locomotive engineer Tom Harding, dispatcher Richard Labrie and operations manager Jean Demaître of the now-defunct Class II railroad were charged with criminal negligence in 2014 by Quebec police.

Harding was accused of criminal negligence causing death by failing to set a sufficient number of handbrakes before leaving the train with its lead locomotive running to maintain brake pipe pressure. A fire in the locomotive led local firemen to shut down the engine, resulting in the loss of brake pipe air pressure and the subsequent eight-mile runaway that culminated in a 65-mph derailment and chain-reaction explosions at the center of town.

Harding was unaware that the train’s 8 Railway Age // February 2018

cargo of Bakken light crude oil destined for the Irving Oil refinery in New Brunswick had been incorrectly classified by its U.S. shipper but was in fact highly explosive, not just flammable. Nor did he make the rules that allowed one-person operation of a 73-car train of hazardous materials over a railroad the Transportion Safety Board of Canada (the Canadian equivalent of the NTSB) cited as having a weak safety culture.

The jury also appears to have agreed with TSB’s opinion that Transport Canada, the Federal Railroad Administration’s Canadian counterpart, had failed to provide adequate safety oversight of the railroad as well as the hazmat it was transporting.

The Transportion Safety Board in its 2013 report on the catastrophe cited Transport Canada and its lax regulatory oversight of the MM&A as a key culprit.

“This was a company with a weak safety culture, a company where people did what was needed to get the job done, rather than always follow the rules,” TSB Chairperson Wendy Tadros said. “A company where unsafe conditions and unsafe practices were allowed to continue. Which begs questions: Who, then, was in a position to check on this company—to make sure safety standards were being met? And yet this booming

industry—where unit trains were shipping more and more oil across Canada, and across the border—ran largely unchecked.

Yes, Transport Canada knew about some of the problems at MM&A, but the follow-up wasn’t always there.”

“If the guard dog doesn’t do its job, then indeed it is to blame,” said TSB Chief Operating Officer Jean Laporte, about whether Transport Canada held major responsibility for the disaster.

Courtroom spectator Jean Clusiault, who lost his daughter Kathy in the explosion, praised the verdict, according to the Canadian Broadcasting Corporation.

If the guard dog doesn’t do its job, then it is to blame.” railwayage.com

Update

Stuart Chirls

Greenbrier Affirms 2018 Guidance In reporting results for its first fiscal quarter (Sept. 1-Nov. 30, 2017), The Greenbrier Cos. reaffirmed its Fiscal Year 2018 guidance. The company expects revenue of $2.4 billion to $2.6 billion and diluted EPS of $4.00, based on deliveries of 20,000 to 22,000 units.

Net earnings attributable to Greenbrier for the quarter were $26.3 million, or $0.83 per diluted share, on revenue of $559.5 million. Quarterly results included $3.4 million ($2.3 million after-tax or $0.07 per diluted share) of expense related to resolution of litigation in a foreign jurisdiction.

Additionally, the tax rate for the quarter was 33.3%, attributable to discrete items and the geographic mix of earnings.

Compared to the previous annual tax rate guidance of 29%, the impact of the higher quarterly rate is $0.07 per diluted share.

Adjusted EBITDA for the quarter was $76.9 million, or 13.7% of revenue. Orders for 3,200 diversified railcars were received during this quarter, valued at more than $290 million.

Greenbrier’s new railcar backlog as of Nov. 30, 2017 was 26,500 units with an estimated value of $2.56 billion. New railcar deliveries totaled 4,400 units for the quarter.

The company’s board declared a quarterly dividend of $0.23 per share, payable on Feb. 16, 2018 to shareholders as of Jan. 26, 2018.

“Based on current business trends, industry forecasts and production schedules for fiscal 2018, and excluding the expected benefits of the recent tax reform act, Greenbrier believes deliveries will be approximately 20,000-22,000 units, including GreenbrierMaxion (Brazil), which will account for up to 10% of deliveries,” the company said.

“Revenue will be $2.4-$2.6 billion; diluted EPS will be $4.00.”

“Greenbrier advanced several key initiatives during the quarter and is on track to achieve our goals for the year,” said Chairman and CEO William A. Furman. “While the new railcar market in North America is challenging, broad-based demand for Greenbrier’s products and services remains steady, and we expect will trend higher as we advance through fiscal 2018. During the recent quarter, Greenbrier received orders for 3,200 cars in a broad range of railcar types including covered hoppers, tanks, railwayage.com

automotive carrying units and our first orders for open top hoppers for use in aggregate service. Greenbrier’s disciplined balance sheet management has resulted in a strong cash position and very low net debt, enabling us to invest strategically and return capital to shareholders. Good backlog visibility combined with a strong balance sheet provides the flexibility we need to build railcars when and where customers need them, across four continents.

“Based on first-quarter results, we are confident in our guidance for the year. As fiscal 2018 progresses, we will continue integration of our new manufacturing investments and will to expand internationally. Greenbrier is well-positioned to achieve its business objectives for fiscal 2018 as growth in North American and international markets drives increased revenues, deliveries and EPS, compared to fiscal 2017.”

“Greenbrier’s revenue was 5% below consensus; EBITDA was largely in line with expectations, but a significantly higher gain on disposition of equipment than we modeled was a key contributor,” commented Cowen and Co. analyst Matt Elkott. “Orders

were 7% above our estimate, and the ASP of orders was 16% above our estimate. The 16% gross margin was just 20 bps better than our estimate and 20 bps below consensus.”

Greenbrier subsidiary Greenbrier Management Services LLC (GMS) as of late 2017 expanded its railcar fleet under management by approximately 85,000 units to 355,000 since Aug. 31, 2016, an increase of more than 30% in this period. GMS now provides management services for more than 20% of the total North American railcar fleet.

Through its subsidiary Regulatory Services Group, GMS in 2017 also launched a new web-based learning management tool that “brings on demand, industry-leading hazmat transportation and non-destructive testing training to tank car management customers,” the company said. “As part of a comprehensive regulatory compliance regime for GMS-managed hazmat shippers, the online training systems allow customers to participate in different types of training at their convenience.”

Greenbrier is based in Portland, Ore., and has operations at several global locations.

February 2018 // Railway Age 9

Update Sanborn Surfaces at Union Pacific

KCS Reduces Planned 2018 Capital Program Kansas City Southern estimates its 2018 capital program will be between $530 million and $550 million; down approximately 4% from 2017.

Railroad executives explained during the 2017 Q4 earnings call that the slight reduction in the planned capital program is due to a number of large projects wrapping up in 2017 rather than an indication that growth opportunities are limited.

“Reductions in the Sasol Investment, which is now complete and other reductions in [Positive Train Control] and Sanchez Yard have somewhat been offset by investments in new projects and continued growth opportunities,” said Jeffrey Songer, Executive Vice President and Chief Operating Officer.

Patrick Ottensmeyer, President and CEO, added, “The reduction in CapEx does not reflect that we see lower growth. It’s a function of completing some really major capital projects and in the absence of new projects that come along. It certainly does not reflect

10 Railway Age // February 2018

that we feel different about the growth outlook or that the growth outlook is going to be weaker.”

Half of the capital program will be spent on maintenance, 34% on growth, 7% on PTC and 9% on IT and other expenditures.

Within the growth capital, KCS estimates between $63.6 million and $66 million will be spent on capacity projects and between $42.4 million and $44 million on line rehabilitations in Mexico.

Songer mentioned a few projects KCS is looking to invest in during 2018 including rehabilitation of the F-Line and construction of the Celaya Bypass in Mexico.

Songer said the F-Line is a viable gateway for refined products and cross border shipments and is located between Monterey and the KCS border crossing at Matamoros. A multi-year rehabilitation of the line is driven by the long-term outlook for refined product exports to Mexico.

The railroad is based in Kansas City, Mo.

Cindy Sanborn, the first woman to hold a senior operating executive role at a Class I railroad, and who was unceremoniously axed by the late E. Hunter Harrison in a messy management purge at CSX, has joined Union Pacific as Regional Vice President Transportation-Western Region, effective Feb. 16, 2018.

Sanborn succeeds Richard Castagna, who will retire after nearly 25 years of service. She will lead rail operations in Washington, Idaho, Oregon, California, Nevada, Utah, Arizona and New Mexico. Sanborn will be based in Roseville, Calif., and manage more than 10,000 track-miles.

Sanborn most recently served as Executive VP and Chief Operations Officer at CSX. She held various leadership positions throughout her 30 years at the Jacksonville, Fla.-based railroad, including EVP Operations, VP and Chief Transportation Officer and VP Northern Region.

railwayage.com

Financial Edge

A Preview of REF 2018

T

ony Kruglinski’s 2018 Rail Equipment Finance Conference (w w w.railequipmentf inance. com) will be held March 5-8, 2018 at the LaQuinta Resort and Club in LaQuinta, Calif.

More than 400 rail equipment finance professionals will gather to hear the current state of the equipment market for cars and locomotives, where the lease market is headed and what new-railcar order books will look like in 2018, and to enjoy the best networking available at any conference, in a beautiful setting.

REF 2018 will tackle pertinent issues in today’s rail finance and equipment market.

One topic getting significant attention is the new federal income tax legislation. Price Waterhouse will discuss the new corporate tax rate, the 100% (“bonus”) depreciation available on new and used equipment (when it is and is not applicable), the cap on interest deductions, and other relevant provisions of the new tax law impactful to new equipment investments, leases for old and new equipment, and sales of new and used railcar assets.

At REF 2017, attendees heard about block-chain technology and how it will ultimately change transactional and information service businesses. Looking for an update at REF 2018? Sorry, but block-chain is so, well, last year. Attendees at REF 2018 will find out which information and financial technology is on the horizon, where it is going to show up in your corporation and in the transportation industry, and what you need to know it six months before your

NEW CN HAS ORDERED 200

LOCOMOTIVES

railwayage.com

competitors will be reading about it in the Wall Street Journal.

2017 was a rebound year. Freight loadings were up, lease rates on small-cube covered hoppers bounced back and new cars amazingly began to be built again. REF 2018 will tackle demand for the small-cube covered hopper. Hear from experts on the business of fracking and find out if growth will continue. Will oil rigs continue to be added and sand demand increase, or will rig counts start to decline? How much sand is going in frac wells? Is it increasing or decreasing? Will the wall between the U.S. and Mexico impact small-cube demand?

What might happen to lease rates? At REF 2018, Todd Kahn, Chicago Freight Car, and Nicole Leonard, S&P Platts, will paint the picture you need to see on the sand market.

More rebounds? In addition to the price of crude oil, lease rates for tank cars have made a hockey stick turn from the doldrums of the 2016-early 2017 timeframe.

REF 2018 will cover the tank car market, the current status of today’s tank car regulations, current retrofit demand, and where lease rates and new and used tank railcar prices are headed.

The movie “The Graduate“ doesn’t have the only claim on forecasting the market and demand for plastic. At REF 2018, Graham Brisben, PLG Consulting, will help solve the complicated demand puzzle for plastic pellet covered hoppers, and help investors understand whether this market is headed to overbuilding or if additional capacity is still needed.

REF 2018’s keynote speaker, Adriaan janse van Rensburg, Vice President Polymers, Sasol Chemicals North America, will give his perspective on the domestic plastics market, discussing global competition, the landscape for growth and trends he sees on the horizon.

David Humphrey, Railinc, will discuss the state of the North American railcar and locomotive fleets. Find out what is being scrapped and what is being built. Eric Starks, FTR Associates, will provide REF 2018 his perspective on the rail economy and the future of new builds, and offer his views on whether or not the economy will continue to grow and what hurdles we

more than 400 rail equipment finance pros are expected.” might face in the coming years.

Need your horsepower fix? The third day of REF 2018 will tackle the North American market for locomotives and set the record straight on all power-related issues. Come see experts from the OEMs discuss the changing competitive landscape for building locomotives, alternative fuel solutions and life after the commencement of Tier IV emissions regulations.

We know that CN has ordered 200 new locomotives. Is that the beginning of a new wave of orders or is it an anomaly? Where does the order book for 2018 stand today, and what are the projections for the remainder of the year?

Worried about the value of units already in your fleet? Come here three of the industry’s best—Steven Beal, NRE); Pat Mazzanti, Railroad Appraisal Associates; and Greg Schmid, Residco—discuss yesterday’s, today’s and tomorrow’s values on the new and used power you have in your fleet.

REF 2018 will be the best ever. Come join us in the California desert. After another polar vortex, you will have earned it!

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

DAVID NAHASS President Railroad Financial Corp.

February 2018 // Railway Age 11

LEGISLATION

uncertainty

on the

hill

By FRANK N. WILNER, CAPITOL HILL CONTRIBUTING EDITOR

12 Railway Age // February 2018

railwayage.com

LEGISLATION Productive lobbyists know that to Democrats you speak Democrat, to Republicans you speak Republican, and you always speak of your industry. Today’s irritable political environment compels even more interpersonal dexterities in presenting to lawmakers the railroad legislative and regulatory agenda.

Shutterstock/ Greg Kushmerek

W

here yesterday’s railroads, beset by financial weakness and service degradation, rallied bipartisan congressional determination to reform an antiquated economic regulatory scheme lest looming railroad nationalization drain the public purse, current partisan incivility complicates the task of assembling bipartisan support.

The congressional calendar adds another trouble, as lawmakers traditionally retreat from votes on high profile issues in the months before elections.

With this year’s mid-term House and Senate ballots likely to be the most tumultuous in decades, congressional action not taken before the summer recess will hibernate until a new Congress is seated in 2019.

Leading the railroad Washington agenda is preservation of the North American Free Trade Agreement (NAFTA), as international trade contributes substantially to rail carloadings, revenue and employment.

Another priority is assuring that Congress, in investing in new infrastructure, neither undermines modal equity by favoring rail competitors, nor ignores funding assistance for new Northeast Corridor Hudson River tunnels that are crucial to the region’s economic health.

Also important is permanent extension of the reginal and short line railroad investment tax credit, and legislation allowing performance standards preeminence over prescriptive safety regulation.

As for rail regulatory agencies, festering at the Surface Transportation Board is a backlog of controversial rulemakings; the Federal Railroad Administration, with the delayed arrival of a new administrator, must superintend a year-end and still problematic deadline for Positive Train Control (PTC) implementation, and confront a host of other rail safety issues.

railwayage.com

The congressional agenda NAFTA: With more than 40% of rail carloads and 35% of rail revenue derived from international trade, convincing President Trump—directly, or indirectly through congressional involvement—not to withdraw the U.S. from NAFTA is imperative to railroad financial health and jobs.

Should Canada and Mexico react to a U.S. withdrawal by finding alternative global trading partners, the impact on railroads will be calamitous. American agriculture, for example, currently ships $45 billion worth of goods annually to Canada and Mexico—much of it moving by rail. That volume is up 450% since NAFTA was negotiated.

Tax Credits: Some 600 regional and short line railroads—small businesses representing almost 30% of rail mileage—were created as an alternative to abandonment by major railroads of light-density lines. They are vital in preserving rail service to rural communities, providing employment and reducing highway congestion. Since 2005, an investment tax credit known as 45-G— referring to its Internal Revenue Code section—has facilitated some $4 billion in private-sector capital investments by these small railroads that otherwise would have been unaffordable.

The 50% tax credit—capped at $3,500 per mile—would be retroactive to Jan. 1, 2017, and extend through Dec. 31, 2018, as contained in the Tax Extender Act of 2017 (S. 2256), introduced by Sen. Orrin Hatch (R-Utah).

In the House, Rep. Lynn Jenkins (R-Kan.) introduced the Building Rail Access for Customers and the Economy (BRACE) Act (H.R. 721), to make the investment tax credit permanent. House Ways & Means Committee Chairman Kevin Brady (R-Tex.) says permanence will provide “predictability, clarity and certainty.”

Infrastructure: Who pays for infrastructure,

and who doesn’t, persists as a thorny issue as Congress struggles toward agreement on massive new infrastructure investment requiring a funding source.

Historically, user charges for heavy trucks have been less than the cost of damage they impose on pavement and bridges—and those inadequate user charges make no contribution to highway safety essentials such as snow removal. The underpayment is an unjust subsidy, allowing rail competitors an unearned cost advantage.

The heavy-truck cost responsibility underpayment—some 20% below full-cost recovery, says the Department of Transportation—combined with a reduction in auto miles traveled and improved fuel economy, have emptied the Highway Trust Fund (HTF), which depends for replenishment on a federal per-gallon tax on motor fuels.

That tax hasn’t been increased since 1993, necessitating a $143 billion transfer over the past eight years from general treasury.

The Congressional Budget Office predicts a further $19 billion annual shortfall in the HTF absent an increase in the fuels tax or alternative funding. Yet an anti-tax disposition makes it “very hard” to pass a fuels tax increase, says House Highways and Transit Subcommittee Chairman Sam Graves (R-Mo.), who likely will succeed the retiring Bill Shuster (R-Pa.) in 2019 as chairman of the parent Transportation & Infrastructure Committee.

With a 10-year, $1 trillion infrastructure spending program under consideration—$200 billion in new federal funds leveraging $800 billion in private sector investments—Congress must consider alternative revenue generators. They include increased tolling of roads; a vehicle-milestraveled tax; and a weight-distance user fee that matches miles traveled with gross weight, as weight is the dominant factor in infrastructure damage.

While the American Society of Civil February 2018 // Railway Age 13

Engineers assigns near-failing grades to much of America’s highway and bridge infrastructure, commercial motor carriers seek to increase allowable truck length and weight limits to improve trucking productivity. While they assert that the weight of longer trucks can be spread over more axles to reduce pavement damage, overall vehicle weight is the major contributor to highway bridge failure. Highway congestion and logistics productivity can more efficiently be reduced by policies encouraging more containers and trailers on rail flatcars.

Gateway Project: Also competing for infrastructure funding is Amtrak, along with publicly owned rapid transit, light rail and regional/commuter railroads— many of the latter woefully short of funds to invest in new equipment and safety upgrades, including Positive Train Control.

The Trump Administration, however, has called for more than 40% cuts in Amtrak and transit funding.

Additionally, a federal contribution to the Gateway Tunnel Project to construct two new rail tunnels under the Hudson River is in mortal danger following abandonment by the Trump Administration of the Obama Administration’s verbal agreement to fund 50% of the project’s cost. The onus now is 14 Railway Age // February 2018

on Congress to include the federal share in an infrastructure bill.

The existing two tubes, more than a century old, disintegrating and carrying some 200,000 New Jersey Transit and Amtrak riders in and out of Manhattan daily, are an indispensable link in the Northeast Corridor connecting Washington, D.C., with New York and New England.

A tunnel shutdown could cripple the New York metropolitan area’s economy—with the impact estimated at more than $100 million daily.

Labor: There could be a rail work stoppage in 2018, with the expectation Congress will impose a legislative settlement to keep trains running. While a majority of unionized rail workers have ratified new national wage, benefits and work rules agreements, several unions have not settled. If further mediation doesn’t produce ratified agreements, and arbitration is rejected, the Railway Labor Act provides for creation of a Presidential Emergency Board to make non-binding settlement recommendations, which include a series of cooling-off periods totaling up to 90 days.

Further rejection could lead to an economy-damaging rail work stoppage. Well in advance, railroads will seek legislation

imposing similar terms that the majority of other rail unions and their members accepted. A similar situation could arise with Amtrak, which negotiates separately under the Railway Labor Act. Amtrak: In its fifth decade, Amtrak continues its elusive search for that which it cannot find—reliable funding, organizational stability and, unfortunately, safety, as evidenced by a recent spate of humanfactor-caused accidents.

With a new Amtrak president possessing a passenger airline background and eager to purge a culture of fuzzy accounting, impose financial transparency, inject greater accountability and eliminate inefficiencies, Amtrak seeks yet another reprieve from a Congress increasingly skeptical of the passenger railroad’s business plan.

Expect congressional encouragement for non-Amtrak operation of state-supported passenger train routes, and a greater push to open up to three Amtrak long-distance routes to competition from other operators. Lawmakers may also consider a private-sector proposal to separate Northeast Corridor (NEC) train operations from infrastructure by leasing the NEC to a management organization, such as AIRNet21, which would self-finance expansion railwayage.com

Shutterstock/ f11photo

LEGISLATION

LEGISLATION and renewal and earn a profit through user charges assessed passenger and commuter trains, and commercial development.

Congress may also express impatience with the regulatory and judicial fisticuffs between Amtrak and its host freight railroads. In an attempt to impose on freight railroads micromanagement of metrics and standards for passenger train arrivals, Amtrak and the Surface Transportation Board , notwithstanding citing as authority the Passenger Rail Investment and Improvement Act (PRIIA), have suffered courtroom losses. A more fruitful outcome could be a nudging by Congress that Amtrak make financial contributions toward increasing host-railroad line capacity over which its intercity passenger trains operate.

For example, where Amtrak demands that freight trains “take the siding” to allow faster passenger trains to pass, Amtrak— which has been ruled by the Supreme Court a competitor of freight railroads for scarce track capacity—could contribute to construction of sidings that would enhance network fluidity.

Meanwhile, Amtrak’s reservoir of safety problems is brimful, with the National Transportation Safety Board saying that “Amtrak’s safety culture is failing, and is primed to fail again, until and unless Amtrak changes the way it practices safety management.” How Amtrak President Richard Anderson responds may define the length of his tenure.

FRA PTC: It is a decade since Congress, then heeding more than a decade of National Transportation Safety Board urging, ordered Positive Train Control (PTC) safety technology developed, installed and operational.

Specifically, the 2008 Rail Safety Improvement Act ordered every freight, intercity passenger and commuter railroad to complete all hardware installation, relevant employee training and spectrum communications acquisition for PTC by Dec. 31, 2015. A three-year extension was later enacted owing to PTC’s complexity and the fact that its components are not readily obtainable from a Best Buy store or overnight from Amazon.

Additionally, the 2015 Fixing America’s Surface Transportation (FAST) Act allowed railwayage.com

that if Class I railroads and Amtrak have PTC operational or in revenue service demonstration on at least half of their track by year-end 2018 (with a lower threshold for commuter railroads), there is an automatic two-year extension to Dec. 31, 2020, to make PTC fully operational.

Legislation introduced in January by the T&I Committee’s senior Democrat, Peter DeFazio of Oregon, would eliminate the automatic extension (the Positive Train Control Implementation and Financing Act, H.R. 4766). While unlikely to be enacted, a provision granting a federal subsidy to assist cash-strapped commuter railroads in complying with the PTC mandate is ripe for inclusion in an infrastructure spending bill.

Performance Standards: A legislative proposal supported by railroads was introduced by Senate Surface Transportation Subcommittee Chairman Deb Fischer (R-Neb.) to allow data-driven, soundscience-validated performance-based safety standards in place of traditional prescriptive safety regulation.

The Railroad Advancement of Innovation and Leadership with Safety (RAILS) Act (S. 1451) would eliminate, for example, the FRA’s prescribing of mileage-based brake tests and maintenance procedures in favor of specifying a safety outcome— such as a maximum accident-type rate or component failure rate—with each railroad then allowed to devise its own cost-effective means of achieving the target.

Separately, the AAR—seizing an invitation from the Trump Administration to recommend repeal, replacement or modification of outdated safety regulations—has provided the FRA with a list. The outdated regulations, said the AAR, “stifle the railroads’ ability to benefit” from technological advancement. “Technology should be seen as a pathway to enhance safety, not feared as a killer of jobs,” AAR President Ed Hamberger said.

Short lines: Class II and III railroads want the FRA to restore support for regional training courses that instruct small railroad employees in regulatory compliance, and want the FRA to cancel—calling it “regulatory overreach”—a rulemaking requiring that railroads and their contractors submit for approval detailed minimum training requirements for each employee category.

Additionally, short lines and regional

railroads want the Pipeline and Hazardous Materials Safety Administration to add liquified natural gas (LNG) to the commodities list authorized for rail transport, and for Congress to require that states cede to federal agencies the development of oil spill response plans.

STB While partial economic deregulation in 1980 limited rate relief to where shippers lack effective transportation alternatives, shipper grievances remain plentiful. Yet, since Congress in 2015 voted to expand Surface Transportation Board (STB) membership from three to five, with instructions to expedite its docket, the agency has taken a siesta on volatile policy issues awaiting the delayed arrival of reinforcements.

Shippers cannot control the nominations and Senate confirmation process, but they can petition courts, under provisions of the Administrative Procedure Act, to order the STB to perform its functions.

Stand-Alone Cost Test: In 2015, Congress directed the STB to work toward developing a less expensive alternative to its StandAlone Cost (SAC) test for determining rate reasonableness—a multi-year, multimillion-dollar process requiring design of an elaborate, hypothetical railroad for cost comparison purposes. There has been no progress apart from a consultant’s report sent to paper recycling.

Revenue Adequacy: As railroads trim costs, increase revenue and earn their cost of capital—helped by lower tax rates—more are said to be revenue-adequate, which is the ability to attract sufficient capital to assure normalized maintenance and facilities renewal. While the STB promises to be more aggressive in limiting rate increases of revenue-adequate railroads, it hasn’t defined a standard. Railroads say a rate ceiling will impede their ability to remain revenue-adequate through future business cycles—especially when restricted to recovering book value on long-lived assets rather than estimated replacement costs.

Competitive Switching: Since 2011, the STB has delayed deciding a shipper request to require, at certain points and under certain conditions, that a sole-serving railroad carry traffic to an interchange with a competing railroad, allegedly to create rate competition.

February 2018 // Railway Age 15

10 Under 40

UNDER

40 Little, Director of Railway Education at Michigan State University Center for Railway Research and Education, have selected the winning 10 in Railway Age’s Fast Trackers–10 Under 40 contest. These rising industry stars are making an impact in their respective fields, and represent the “best of the best”.

“I was, once again, impressed with the number of excellent submissions this year,” said Little. “These young people have made significant impressions to establish their careers, and to be respected, contributing members of their local communities.”

This year’s award winners will be recognized at the annual Railroader of the Year Dinner, March 13, 2018 at the Union League Club of Chicago, honoring Railway Age’s 55th Railroader of the Year, John “Jack” Hellmann of Genesee & Wyoming .

16 Railway Age // February 2018

Ryan Crawford Manager of Ballast

Herzog Railroad Services

When railroads want to “put their money under the wheels,” they turn to service providers such as Herzog. The ballast specialist relies on the experience and professionalism of Ryan Crawford to handle the challenge of managing ballast on a railway operating 31 high speed trains 24 hours a day, seven days a week, 365 days a year. Over the past six years, Crawford has expanded the staff at Herzog Ballast Group from 35 employees to 70, all the while managing a fleet of 3,800 maintenance-of-way railcars on a daily basis. As part of the team tasked with serving Herzog’s customers, Crawford also believes that responsibility goes hand in hand with a larger goal of continuing to introduce new technology to the industry. Crawford works with AREMA Committee 1 – Roadway & Ballast Track Functional Group, which is responsible for the development and publication of recommended practices and information relating to a range of ballast issues. Outside of work, Crawford volunteers with the Platt County School District Parent Association, and is certified in CPR. railwayage.com

Shutterstock/ SB7

R ailway Age editors, along with judge Nick

10 Under 40

Gregory Deibler

Chief Safety, Security & Compliance Officer Virginia Railway Express

From the beginning of his career crewing freight trains as an entrée into the business, Greg Deibler has worn his enthusiasm for the industry on his sleeve. His goal is, and seems to have always been, to serve as a Chief Operating Officer for a Class I. Armed with experience and perspective from the freight and passenger sides of the industry, he is constantly brainstorming innovative ideas for projects and programs, following the larger picture and asking questions about what other operators are doing. At VRE, Deibler has developed a strong first-responder rail incident safety training program including realistic and challenging full-scale exercises with partners Amtrak, CSX and Norfolk Southern, earning the program a Gold Award from the American Public Transportation Association. Outside of work, Deibler developed a fundraising plan selling craft soda in the region to supplement grant funding to restore and establish a heritage museum at the Lehigh Valley’s former Sayre, Pa., depot, and is a member of its board of directors. railwayage.com

William Downey

Government Affairs and Economic Development Manager RJ Corman

Dsecribed as “an ideal employee and young person climbing the ranks in the railroad industry,“ William Downey studied communications at the University of Kentucky. He won numerous awards starting out in business development for RJ Corman Group. His experience spending long days on the road establishing working relationships with customers in support of Corman’s initiatives led Downey to work with the company to create his current position. He travels the United States to meet with lawmakers, to help make laws and regulations more fair, competitive and safe for all railroad employees. He forges relationships with government officials who can help educate, lead and enforce railroad initiatives for years to come. A leader in the workplace, Downey has been active in local boards and leadership programs, and is a candidate for Magistrate on the Fiscal Court in Woodford County, Ky., where he lives with his wife, Emily, and their daughter, Amelia.

February 2018 // Railway Age 17

10 Under 40 Noah Heulitt

Aage Lindstad

Bombardier Transportation

Genesee & Wyoming Railroad Services, Inc.

General Manager

Noah Heulitt was appointed General Manager of NJ Transit’s Bombardier-operated RiverLINE light rail in 2015.

Since he had joined the company only a few years earlier, the decision was met with initial skepticism from internal and external stakeholders. However, Heulitt succeeded by relying on input from his team as well as on his own judgment, being creative in his approach to traditional railroad issues to optimize processes, and leading by example. He has also demonstrated a strong commitment to customer service by bringing a lean manufacturing mindset from his prior experience in steel production.

Safety has been a leading management priority for Heulitt. As a result, the light rail team has gone 4,710 days (as of Jan. 3, 2018) without a lost time accident. He led a project to reduce the line’s DMU emissions, earning a grant from the Delaware Valley Regional Planning Commission to retrofit the fleet. In the community, Heulitt teamed up with NJT, Cooper University Hospital and the Ronald McDonald House of Southern New Jersey to create a Polar Express Train for 20 children and their families.

Director of Automation

Aage Lindstad has been instrumental in improving railroad efficiency not only at G&W but for the industry. With his leadership, the G&W North America customer service team achieved a record 96% automation level in 2017. When G&W doubled in size with the RailAmerica acquisition in 2013, Lindstad drove the successful integration of RailAmerica’s customer service center into G&W’s customer service operations. As a RailAmerica employee prior to acquisition, Lindstad helped RailAmerica’s customer service team transition from 0% automation to 92% automation in just three years’ time.

Lindstad would like to serve in a senior leadership role that focuses on continuous improvement in processes and technology, delivering an even greater experience for internal and external customers.

He has a true passion for continuous improvement and approaches each automation challenge with enthusiasm and determination.

Lindstad is an authorized volunteer for Operation Lifesaver, and a congregant of the Shepherd of the Woods Lutheran Church Council in Jacksonville, Fla.

would like to congratulate our own

Ryan Crawford on being named a winner of

‘Under 40 Fast Trackers’!

18 Railway Age // February 2018

railwayage.com

10 Under 40 Kyle Mulligan

Assistant Chief Mechanical Engineer Canadian Pacific Railway

•

In the short time Kyle Mulligan has been with CP, he’s become an up-and-coming leader in the wayside detection field. He has focused on improving safety and operational efficiency by implementing systems that predictively identify safety concerns, and his work helped reduce road setouts by 91%. Mulligan developed a novel patent-pending algorithm that uses acoustic bearing detector (ABD) technology to predict on-line railcar roller bearing failures. He formed a close working relationship with CP’s Information Technology department and, through his cooperative leadership style, managed to direct the team to deliver results on time and on budget. Mulligan trained and qualified as a locomotive engineer and freight car inspector, and has used this first-hand experience to further understand impacts of his systems on operations in the field. He earned CP’s CEO Award in 2017, and is a mentor with FIRST, a group that inspires young people’s interest and participation in science and technology. Mulligan volunteers as an engineer for CP’s kiddie train and with Grow Calgary, Canada’s largest community farm.

Jacqueline Peets-Graves

Manager Strategic Planning Norfolk Southern Corporation

With 10 years at NS, Jaqueline Peets-Graves began her career as a management trainee and assistant trainmaster, and has worked in three departments within the company.

As a planning manager, she handles projects that add velocity, fluidity and capacity to the network. This includes coordinating public-private partnerships with municipalities and working cross-departmentally to identify and coordinate sound investments in the NS infrastructure. She is also responsible for recommending objectives and strategies to senior management in order to develop the overall corporate direction to achieve Norfolk Southern’s vision. She has led two Employee Resource Groups, YoungNS and The J. Whitaker Group, where she used her platform to help foster a diverse and inclusive workplace aligned with Norfolk Southern’s mission and values. As a thensingle mother, Peets-Graves was a first-generation college graduate and in May will earn a graduate degree. Now the wife of a fellow NS employee, she balances her career with raising a teenage daughter and preschool son.

OUR MOST IMPORTANT SUCCESS FACTOR IS OUR EMPLOYEES

Congratulations to Noah Heulitt, Bombardier’s General Manager of Operations and Maintenance for the River Line system at New Jersey Transit, on being selected as one of Railway Age’s Fast Trackers – 10 Rising Industry Stars Under 40.

We are proud of Noah and all the dedicated men and women of the Bombardier Services team for providing industry-leading reliability, fleet utilization and safety performance at transit agencies and airport transit systems across North America and worldwide.

www.bombardier.com

railwayage.com

February 2018 // Railway Age 19

SPEcial Advertising Section Railcar Reliability Excellence

The Greenbrier Companies, long a leading integrated railcar solutions provider headquartered in Lake Oswego, Oregon, manufactures new railcars in five countries on three continents, for the North American, South American, European and Middle Eastern markets. In North America, Greenbrier combines manufacturing with wheel and parts services, leasing and management of more than 355,000 railcar assets. Through joint ventures, it is a preeminent provider of railcar repair and refurbishment services as well as tank car retrofits.

Large-scale management of rail assets through subsidiary Greenbrier Management Services (GMS) is a key to growth and success, reaching every constituency in the rail business to aide compliance with federal, industry, and car owner requirements. GMS sets itself apart to achieve reliability excellence: First, by employing the industry’s best professionals for asset management and regulatory compliance. Second, with the industry’s largest and most advanced dedicated software and technology development team, and the integrated web-based management platform, Enspire®. Third, a laser-focus on reliability of repairable systems, managing and preventing failure through Enspire®.

20 Railway Age // February 2018

Asset Management The GMS asset management teams in Lake Oswego and Ft. Worth, Texas, perform a range of functions for railroads and industrial shippers, including car hire administration, ad valorem tax preparation, car repair

Reliability is the probability that an item will perform without failure under stated conditions for a stated period.

billing audits, and the management of maintenance events such as shop selection, estimate review and invoice payment. Highly-skilled asset managers work directly with each maintenance provider and car owner to ensure compliance with standards and asset uptime, managed on the Enspire® platform to connect data and analytics across service areas.

Fleet Engineering Greenbrier’s engineering teams in Portland and Colleyville, Texas, and at manufacturing locations in Europe and South America, provide essential support for new car design and operational changes.

Greenbrier’s engineering expertise is essential, since designs and changes often require approval from regulatory bodies such as the Association of American Railroads (AAR). GMS recently introduced a comprehensive tank car reliability and maintenance (“RM”) program that collects quantitative RM inspection data using an international ISO standard. The RM program comprises detailed work instructions, collection of quality data, taxonomy, and specific terms and failure definitions to perform a reliability analysis of components.

This helps car owners understand how or when a component might fail, ensuring that cars perform at a high level of reliability, are safe and in proper condition for transportation.

Compliance to Standards Located throughout the U.S., the GMS regulatory support team has national certifications in quality, nondestructive testing and welding. To comply with the Department of Transportation’s Hazardous Materials Regulations and AAR rules and standards, audits, training and development of written work instructions are the focus at shipper facilities, repair shops, and railcar parts manufacturers.

On-site and field inspections document the overall condition of a railcar and can include cost estimates to restore the car to interchange standards.

Greenbrier’s experience, expertise, and integrated business model and GMS’ focus and dedication to car owner’s interests continues to provide value to our customers through the sharing of knowledge and IT capital. railwayage.com

10 Under 40 David Strezo

Ashley Thorne

OmniTRAX

Kansas City Southern

VP, Network Operations & Customer Service David Strezo started in 2003 as a data entry clerk working for OmniTRAX at the CSX Intermodal ramp on the south side of Chicago. After six promotions and a relocation to corporate headquarters in Denver, he now serves as Vice President of Customer Service and Network Operations for all 21 OmniTRAX-managed railroads. Tasked to transform the OmniTRAX customer service team to become more proactive and support the company’s slogan “Rail Made Easy,” Strezo over the course of a few months led the redesign of the organization, created an account management team with defined geographic and customer assignments, and developed training and management processes to radically transform performance. Strezo has established a strong working relationship with GE Transportation, and over the past five years, OmniTRAX has been the recipient of five GE Fast-Track awards in which he either led the activity or played a significant role in the implementation. A youth sports coach, Strezo his wife Tabitha make their home in Aurora, Colo., with their children Payton, MJ, and Mia.

Vice President, Investor Relations

Since joining KCS in 2008, Ashley Thorne has held progressive roles within Insurance & Risk Management, Finance & Financial Planning and Analysis and Investor Relations, and was promoted to her current position in 2017. She believes the key to overcoming obstacles is to maintain a perspective that all challenges are opportunities to improve. Shortly after accepting the position of Insurance Manager in 2010, Hurricane Alex damaged portions of KCS’s network in Mexico. Despite being new to her position, Thorne managed the $66.5 million insurance recovery. This effort required collaboration between multiple departments including Finance, Marketing and Operations, and she also maintained constant communication and coordination with the insurance community.

The claim was ultimately resolved and Thorne developed a deeper appreciation of the complexities of the rail network. As FP&A Director, Thorne took her diverse view of KCS and the industry and applied it the financial planning process, empowering her team to work independently, promoting cross-functional collaboration.

In recognition of his work toward achieving our Core Purpose —to be the safest and most respected rail service provider in the world—

G&W is honored to congratulate

Your Leading Rail Industry Solutions Provider INCREASE OPERATING EFFICIENCIES IMPROVE SAFETY PERFORMANCE ENHANCE PASSENGER COMFORT

Aage Lindstad,

Director of Automation,

®

on being named one of Railway Age’s FAST TRACKERS—10 Rising Industry Stars Under 40.

lbfoster.com US: 1.800.255.4500 Intl: +44(0)114256222

Genesee & Wyoming Inc. www.gwrr.com

22 Railway Age // February 2018

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1/29/2018 2:35:58 PM

10 Under 40 Justin Vonashek Vice President, System Safety

RUNNERS-UP

Metro-North Railroad

Following incidents at MetroNorth from 2012-14, Justin Vonashek was brought in to lead the Office of System Safety and change the safety culture.

With his goal to make MetroNorth the safest railroad in the nation, his team of 58 has grown exponentially, implementing safety programs and developing a partnership with the Operations Department. He has shown how the Office is a partner to assist with, rather than point out, “gotcha” issues. Vonashek led development of a community outreach program to improve grade crossing and rail safety called TRACKS (Together Railroads and Communities Keeping Safe). TRACKS began 18 months ago and has reached more than 125,000 members of the general public. Vonashek is consistently working to find ways to reduce suicides and improve mental health—important issues that impact the railroad. He has worked closely with the Mental Health Association of NYC and National Suicide Lifeline Center to develop and implement a suicide awareness campaign. Vonashek’s personal goal is to someday move up within Metro-North to senior vice president or president.

railwayage.com

Christofer Daloisio

Vice President Railroad Construction Co. of South Jersey, Inc.

Xiang Liu

Assistant Professor & Founding Director, Rutgers Rail Program Rutgers University

Virgil Roundtree

Director of Operations ConnectWork

Erwin Bernal Ruiz

AVP Transportation, Northern Region Kansas City Southern de México

February 2018 // Railway Age 23

LIGHT RAIL 2018 PRESENTED BY RAILWAY AGE AND RT&S

PLANNING, ENGINEERING AND OPERATIONS APRIL 26 & 27 Baltimore Marriott Waterfront Baltimore, MD

TOPICS INCLUDE: • • • • • • • • •

North American New-Builds & Expansion Programs Vehicle Technologies: Electric, Diesel, Hybrid Public & Private Funding Strategies Carbuilder Roundtable Shared-Use Operations with Freight Rail Operating Personnel Education &Training Signaling & Train Control Technologies Expedited Service: History & Present-Day Developments Safety & Security Issues

Professional engineers will receive PDH certificates

REGISTER

www.railwayage.com/lightrail

Sponsorships & Exhibits Available Contact Jonathan Chalon at 212.620.7224, jchalon@sbpub.com 18 RAILWAY AGE January 2016

Keynote Address Kevin B. Quinn Jr. Administrator Maryland DOT MTA

Change & Growth in Toronto Josh Colle Chairman Toronto Transit Commission

Maintenance Quality & Asset Management Anthony Fazio, P.E. Director, Track Engineering & Design SEPTA Supporting Organizations

Hotel Block Our group rate at the Baltimore Marriott Waterfront is $209/night until April 4.

Call 877.212.5752 and mention Railway Age Light Rail.

January 2016 RAILWAY AGE 19

RAILWAY AGE CONFERENCE & EXPO

JUNE 7-8 Union League Club of Chicago Chicago, IL

EXPLORE THE CHALLENGES, ISSUES, & TRENDS AFFECTING THE NORTH AMERICAN RAIL MARKET

OPENING SESSION

REGISTER

WWW.RAILWAYAGE.COM/INSIGHTS Jim Squires

Chief Executive Officer Norfolk Southern

AN INTERACTIVE DIALOGUE AMONG TOP-LEVEL EXECUTIVES, RAILWAY AGE’S EXPERIENCED EDITORS, AND ATTENDEES

QUESTIONS? 212.620.7205 | conferences@sbpub.com

SUPPORTING ORGANIZATIONS

SPONSORSHIPS & EXHIBITS AVAILABLE Contact Jonathan Chalon at 212.620.7224, jchalon@sbpub.com

RailInsights_OnePageAD_Feb_2018_2-2.indd 1

2/2/18 8:53 AM

.

FRICTION SOLUTIONS

Orgo-Thermit TrackSafe Lube system.

optimized friction

By MISCHA WANEK-LIBMAN, ENGINEERING EDITOR

solutions

Managing friction at the rail and wheel interface can sometimes be a sticky situation. Service providers are working closely with customers to improve solutions.

E

mbracing customer input to direct enhancements to products and friction modifiers can help service providers as they work toward reducing wear and uptime while decreasing total cost of ownership.

Loram: Evolving Products Loram Maintenance of Way, Inc., says it has revamped its TOR and gauge face equipment for improved efficiency. “Significant developments have been invested and tested to work with smarter algorithms to meet any railroad requirement. This includes developments in controllers that are remote monitoring capable for both cellular and wi-fi systems. Loram has invested substantial efforts into advancing its friction railwayage.com

modifiers, as well,” says the company.

Loram explains that it has added “depth and breadth” to its Friction Management Division to provide custom solutions to a wide spectrum of needs. “Product innovations have been developed and tested to focus on addressing customer demands, as well as providing value.” Additionally, all of its track-mounted equipment “has received improved engineering to be cost-effective and maintenance-friendly.”

Loram is expanding its modifier product offerings in 2018 and says it will continue to provide advanced modifications to existing friction modifiers and equipment.

“Combining knowledgeable personnel, advanced equipment, intellectual property and proprietary designs, give Loram an unparalleled product portfolio to offer our

customer industry leading products, services and maintenance for a complete friction management solution, “ says the company.

L.B. Foster: Value-Added Solutions Steve Fletcher, Director of Global Friction Management, explains that the goal of L.B. Foster Co. is to become more customercentric by providing value-added product and service solutions.

“Over the past year we have focused on increasing system robustness and improving uptime and reliability by providing an all-in service model. We are also introducing new consumable materials, new equipment designs and a broader deployment of our Remote Performance Monitoring (RPM) technology,” says Fletcher.

February 2018 // Railway Age 27

FRICTION SOLUTIONS to deliver new solutions to our customers.

Our success will be tied to becoming a more customer-centric organization to drive demand for our various product and service solutions. Our goal is to be recognized as solutions experts combining our expertise and materials capabilities.”

Loram gaugeface friction modifier system.

The company is introducing a line of on-board solid stick locomotive wheel flange lubricants that Fletcher says provide the same level of lubricity as current wayside product offerings.

“Field testing has shown that our products can last up to 17 times as long, providing maximum benefits by minimizing the chance that the stick applicator will run empty. Our patented interlock design also significantly reduces stick wastage,” according to Fletcher.

The company plans to introduce several new products in 2018, including the nextgeneration, water-based TOR KELTRACK® ER Plus friction modifier, which can also be bundled with the company’s INFINITRACK® TOR lubricant.

Per John Cotter, senior global product manager, “This all-season product is designed to provide our customers with optimal total cost of ownership, that is, the cost of rail conditioning per mile of track, while maintaining effective friction management on the railhead.”

Cotter anticipates that the company will significantly expand its Gauge Face (GF) portfolio of greases as it works to develop new, optimally formulated products. He notes the company’s SYNCURVE® grease is durable enough to handle a heavy-haul environment while the BIOCURVE® premium quality biodegradable grease has found acceptance among industrial, short 28 Railway Age // February 2018

line/regional and transit customers.

Fletcher also mentions enhancements on the equipment side including the redesigned PROTECTOR® IV tanks, which maximize product flow and consumable application and a new control box, which ensures more consistent consumable output given varying environmental conditions. “L.B. Foster has also pioneered the all-in service model with the North American Class I railroads, as well as offering specific service contracts,” he says. “This model has allowed our customers to optimize the value of their friction management system investment by maximizing equipment uptime to apply friction management consumable materials. The industry has really begun to embrace this model as a way to lock in the long-term benefits of friction management, such as improving fuel economy and increasing the life of the rail.”

“2017 has been a much better year than 2016, when the industry scaled back, but still relatively flat when compared to prior best years,” Fletcher notes. “The North American heavy-haul market has moved from the growth phase to a more stabilized, mature phase. Despite that, we expect continued improvement in our business conditions into 2018. And we anticipate opportunities to evolve in the industrial, short line/regional and transit markets.

To take advantage of these situations, we continue to invest in people and facilities

Whitmore Rail: Incorporating Input Whitmore Rail recently introduced an electric trackside applicator, AccuTrack® 2.0, which the company says includes enhancements such as a new remote monitoring add-on option. The option allows the user to track unit activity from anywhere at anytime and provides self-diagnostics, which aides in on-site troubleshooting. The company notes its LubriCurve® mechanical trackside applicator provides “an affordable alternative with outstanding results.”

Whitmore Rail says its wiping bars were designed with ease of installation and maintenance in mind and can be paired with trackside applicators for precise product distribution. Its gauge face wiping bars are available in 16- to 48-port configurations that, with its TOR wiping bars, are suitable for freight and transit applications.

The company points to its TOR Armor® as a solution to reduce noise, wear and lateral forces, but mentions its full line of rail curve and switch plate lubricants all promote reduced wheel flange and rail wear, extended rail and wheel life, reduced fuel consumption and wheel squeal.

Whitmore Rail explains it continues to create and improve on its lubricants and application equipment with input from its railroad customers: “Our customers continue to demand robust and reliable products that provide value and performance. The global rail market remains brisk, and Whitmore Rail is positioned to meet our customers’ challenges. We expect 2018 business to remain strong for our overall product offering while our heavy freight and transit customers focus on products and services that reduce their total cost of ownership.”

Orgo-Thermit: Automated Systems Orgo-Thermit, Inc., has introduced TrackSafe Lube, an automated system designed by the Goldschmidt-Thermit Group. The railwayage.com

FRICTION SOLUTIONS company installed the system on various transits in 2017 and expects more in 2018.

“With the demands for rail and wheel wear reduction and improved ride quality, transits have realized the most benefit out of our system,” says GeorgeAnne Tutunjian, director of Business Development.” Due to its size and flexibility, it can be applied to almost any rail situation. To date, we have installed lubricators on main lines, elevated structures, dispatch yards and tunnels.”

The solar-powered gauge face lubrication system has the capability of being connected to the grid and can pump almost all market available greases, including those with metal powder. Orgo-Thermit says its eightgallon grease tank is good for a minimum of 500,000 axles. A sensor mounted on the field side of the rail sends a signal to the control unit, which then dispenses a uniform and precise dosage of grease on the gauge face.

The company says its manifold “guarantees the grease is distributed evenly among the grease bars to ensure sufficient distribution while reducing waste.”

“Technology advancements and increasing efficiency have been driving the demand for our units,” explains Tutunjian. “TrackSafe Lube establishes a cellular connection and transmits a daily status report of the unit, including the voltage level of the back-up battery, the axle count, the level of grease in the tank and whether the cabinet has been accessed in the past 24 hours. This data has proven to be beneficial to users and will give them the important information they need without them having to physically access the unit in the field.”

Robolube: Equipment Options RBL, Inc./Robolube’s new wayside lubrication technology, the Robolube “Linear” Wayside Lubricator, was introduced at Railway Interchange 2015 and is currently undergoing testing at TTCI. “We have seen much more activity in the top-of-rail friction management area,” says RBL President Rober Pieper. “Robolube has developed a Combination Hyrail Lubricator that is capable of standard gauge-face

lubrication and applying TOR friction modifiers in a hi-rail configuration.”

The company has also developed a new, smaller Model MR-50 Hyrail Track Lubricator in response to customer requests for a lighter vehicle. Pieper says the unit will fit into a 30 x 30 x 18-inch envelope, weighs 275 pounds and is capable of holding between 50 and 100 pounds

Whitmore Rail AccuTrack® 2.0 electric trackside applicator.

YOUR #1 SOURCE FOR FRICTION MANAGEMENT • Gauge Face & Top of Rail • Lubricator Sales, Service & Instillation • Bulk Lubricant Sales & Delivery • All Major Brands • Maintenance Plans & Surveys • Remote Monitoring • Bulk Pumping Stations & Hy-Rail Delivery

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MERIDIAN OIL & EQUIPMENT 8135 State HWY 43, Webb City, MO 64870 Office: 417-624-LUBE (5823)

railwayage.com Asbell_HalfPageAd.indd 1

www.asbellcompanies.com February 2018 // Railway AgePM 29 1/30/18 2:46

FRICTION SOLUTIONS

RBL, Inc./Robolube’s new wayside lubrication technology, the “Linear” Wayside Lubricator, is currently undergoing testing at TTCI.

of grease. Pieper explains that with this addition to RBL’s product line, the railroads have more options for weight reduction and unit capacity based on the size of their territory.

“Though we had steady orders in 2017, with restricted budgets this past year, we did not see the activity we are accustomed

to experiencing,” says Pieper. “We are optimistic that 2018 will be a much more active year for track lubricators.”

SKF/Lincoln: Waste Reduction Eric Nieman, SKF Product Manager, Railway Products at SKF/Lincoln, explains that the company has expanded its options

Introducing the Sargas Railroad AEI Reader

Finally, there is a low price RF tag reader that can read AEI identification tags on railroad vehicles It is now economical to automatically identify railcars at: • Wayside detect detectors • Scales • Remote control switches • Loading and unloading equipment • Entry doors • Individual tracks For more information go to:

for wayside lubrication system monitoring following customer interest in tapping the benefits surrounding the remote monitoring of lubricant levels and equipment uptime.

Additionally, “a significant development is expansion of our knowledge base for customers inquiring about drilling channels in rail for lubrication holes,” says Nieman. “This has been a common practice in some areas of Europe for many years.

Through close work with our European application engineers, we now can assist customers that may be interested in drilled lubrication channels. The main advantage of drilled lubrication channels vs. applicators is the ability to apply lubricant directly to the area of rail where it is needed.”

Nieman says the company sees a clear trend toward minimizing lubricant consumption while maintaining the level of wear-reduction. “Waste and spillage reduction is a driver, and we are currently examining this, making use of our large portfolio of lubrication technologies,” explains Nieman.

MICHIGAN STATE UNIVERSITY

RAILWAY MANAGEMENT CERTIFICATE PROGRAM

“ Get on the Right Track” 2018 Registration Now Open Sue Lonier • 517.353.5667 railway.broad.msu.edu

www.aeitag.com

1098 Venetia Road • Eighty-Four, PA 15330 Tel. 888.872.4612 or 724.942.1473 sales@signalcc.com

30 Railway Age // February 2018

railwayage.com

TTCI R&D

HOT TOPIC How does braking effect wheels?

By Scott Cummings, Scientist, Transportation Technology Center, Inc.; and Sawan Dumbre, Senior Product Development Engineer, TTX Company

Bruce Kelly

T

ransportation Technology Center, Inc. (TTCI) is investigating the effects of tread braking on wheel wear and tread damage by monitoring the performance of three articulated five-unit well cars and five coal hopper cars with disabled brakes operating in otherwise normal revenue service conditions.

Comparisons of the wheel wear patterns, wear rates, and tread damage will be made between wheels with disabled brakes and wheels operating in the same trains and/or same cars with fully functioning air brakes.

Although the ability to control train speed is a fundamental aspect of railroad railwayage.com

operations, the manner in which braking occurs could potentially be adjusted to promote wheel longevity. Without an understanding of the effects of tread braking on wheel wear and tread damage, it is difficult to evaluate potential improvements.

In the well car test, one of six wheelsets with disabled brakes and three of six wheelsets with normally operating brakes have been removed due to high impact loads after less than a year in service and about 60,000 accumulated service miles. An inspection was conducted on the one wheelset removed from a truck with disabled brakes and shelling was clearly visible on the tread of both wheels, as shown in the photo on p. 32. The

other three removed wheelsets from the well cars were not available for inspection.

No wheelset removals have occurred yet from the coal hoppers.

Wheel profiles show typical early wear patterns on both braked and non-braked wheels: discernable wear on the flange and tread with little or no wear in the flange root. As additional mileage accumulates, more detailed wheel wear analysis will become possible.

The Federal Railroad Administration granted an enforcement discretion for these eight cars to operate in revenue service with disabled brakes for up to three years as part of this study. Trains moving these cars must February 2018 // Railway Age 31

TTCI R&D Shelling is clearly visible on the wheel tread of a wheelset removed from a truck with disabled brakes.

contain a sufficient number of cars to maintain at least 95% operational brakes. The brakes in the D truck of the three well cars were disabled along with the entire brake system of the five coal hoppers. New wheelsets were used for the test group and the control group to eliminate the influence of pre-existing conditions.

High impact loads are generated from wheel tread defects such as shells. The development of shells is thought to be accelerated at elevated temperatures in a process known as TMS (thermal mechanical shelling). Analysis of wheel temperature data has shown that the number of wheels exposed to TMS can potentially be reduced by as

much as 88% just by reducing the variation between wheel temperatures.

Wheel wear rates and patterns can be affected by braking. brake rigging Asymmetries in typical cars can force the brake shoes to shift laterally with respect to the wheels and begin asymmetric wheel wear.

Wheel wear due to tread braking is also a potential contributor to the hunting issues associated with loaded grain cars.

Although the wheel shelling and wear issues related to tread braking could be addressed with changes to components (such as the brake rigging designs and brake shoe properties) or operating practices (such as the increased use of dynamic braking), it is not clear how much effect any such changes would produce. It is possible that the abrasive action of the brake shoe, in some limited durations and at proper levels of force, may act to extend rather than shorten wheel life.

This testing program is critical to providing direction for future wheel/brake interface research.

John H. Armstrong’s

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What It Is, What It Does 5th Edition

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Company invoicing available in US/Canada. All other countries, pre-payment is required and appropriate S&H will be added. You may fax orders to: 402-346-1783. US funds only. Allow 15 days for delivery. Nebraska residents add appropriate sales tax.

32 Railway Age // February 2018

railwayage.com

People / 100 years / Meetings March 7, 2018

JEFF LYTLE

Railroad Day on Capitol Hill 2018

CIT Rail

High profile: CIT Group Inc. named Jeff Lytle, a 22-year vet-

eran of the railcar leasing industry and currently a senior vice president at CIT Rail, as President of the division, effective April 1, 2018. Currently, Lytle is senior vice president in charge of leasing for CIT Rail’s tank, plastic hopper and boxcar railcar portfolios.

Lytle will report to CIT Chairwoman and CEO Ellen R. Alemany and serve on the company’s Executive Management Committee. George Cashman, President of CIT Rail, has elected to retire in June 2018, and will work with Lytle over the coming months to ensure a smooth transition. Prior to joining CIT Rail, Lytle was Senior Vice President of Sales for GE Rail for nine years. He also held several management positions at Ashland Chemical. In related news, Mike Jones, who previously led the company’s Equipment Finance business, was named President of the Business Capital unit. He joined CIT in 2016 as managing director, Equipment Finance.

C

anadian Pacific realigned its Sales and Marketing team, adding Coby Bullard as Vice President Sales and Marketing for ECP and Merchandise. Bullard comes to CP from C.R. England and Crest Logistics, where he was most recently President, Intermodal, and also worked at BNSF. Eileen Pedante-Stone leads the Grain and Fertilizers business unit as Vice President. Stone joins CP from UPS Freight, where she had more than 25 years of experience in sales and marketing. Jonathan Wahba, who joined CP in February 2017 as Vice President of Sales and Marketing, Intermodal and Grain, will now lead Sales and Marketing for Intermodal and Automotive.

Scott Hudson has been named Senior Transit and Rail Manager in the Dallas office of WSP USA, formerly WSP | Parsons Brinckerhoff, the engineering and professional services consultancy. Prior to joining

WSP, he was a project manager in the Fort Worth office of AECOM, providing project management and engineering for transportation projects, primarily freight railroads and rail transit.

Harsco Rail has promoted Allen Branham to Vice President of its North America Sales and Global Contracting Services division. Branham has more than two decades of experience with Harsco Rail, most recently as Director of U.S. East Sales.

Walter J. Winzen, founder and chief executive of Transportation Products Sales Company (TPSC), died at home Jan. 19. Winzen founded three companies that serve the North American rail industry: Transportation Products Sales Company in 1986; Automated Railroad Maintenance Systems (ARMS) in 1990; and Railroad Battery Services (RBS) in 2006.

Washington, DC Information: www.aslrra.org

March 4-7, 2018

RAIL EQUIPMENT FINANCE CONFERENCE La Quinta, CA https://www.railequipment finance.com/

March 13, 2018

Railway Age Rail Freight Business Development Conference Union League Club of Chicago Information: http://www.railwayage. com; conferences@sbpub.com.

March 27-28, 2018 23rd Annual AAR Research Review

Cheyenne Mountain Resort Colorado Springs, CO and Transportation Technology Center Pueblo, CO Information: https://www.aar.org/.

April 7-10, 2018

ASLRRA 2018 Connections Convention Gaylord Opryland Nashville, TN Information: www.aslrra.org; kcassidy@aslrra.org.

April 26-27, 2018

100 years ago in railway age gazette February 1918

Nation’s Railroads Now Under Government Control The railroads of the United States passed from the control of their individual managements and into the possession and control of the government for the period of the war … under the direction of W.G. McAdoo, President Wilson’s Secretary of the Treasury and Director General of Railroads. The Director General issued several general orders to emphasize the fact that the railroads are to be operated as a coordinated system.

railwayage.com

Light Rail 2018, presented

by Railway Age and RT&S Baltimore Marriott Waterfront Baltimore, MD http://www.railwayage.com; conferences@sbpub.com.

June 6-7, 2018

Railway Age Fourth Annual Rail Insights Conference Union League Club of Chicago Information: http://www.railwayage. com; conferences@sbpub.com.

February 2018 // Railway Age 33

RAILWAY AGE PRESENTS

BUSINESS DEVELOPMENT MARCH 13, 2018 UNION LEAGUE CLUB CHICAGO, IL

Investing in Growth & Infrastructure Attend this event to learn how to develop and maintain a reliable, cost-effective multimodal freight network that creates jobs, supports U.S. businesses, and benefits the economy.

Rail Freight Business Development focuses on: • Using federal, state and local funding mechanisms and raising private financing for expansion • How to work within the design-build-operate model • Building partnerships across sectors and organizations • Interfacing with the trucking and marine modes to expand capacity • Working with third-party logistics providers • Railway business development research initiatives

REGISTER www.railwayage.com/railfreight

Supporting Organizations

Speakers Include

Keynote Address

Rail Gateway to the Future

Global Perspective

JJ RUEST Executive Vice-President & Chief Marketing Officer CN

CHRIS BONURA Dir. of Maritime & Rail Integration, Port of New Orleans

JOHN C. HELLMANN Chairman, President & CEO Genesee & Wyoming Inc. Railway Age’s 2018 Railroader of the Year

Luncheon Address

Infrastructure Funding & Tax Reform: What’s In It for Railroads?

Time for a New North American Rail Strategy

MICHAEL FLYNN Sr. Account Dir., Cushman & Wakefield

DARRELL WILSON AVP Government Relations, Norfolk Southern

LEE A. CLAIR Managing Partner, Transportation & Logistics Advisors, LLC

Sponsorships & Exhibits Available

Questions?

Contact Jonathan Chalon at 212.620.7224 | jchalon@sbpub.com

212.620.7205 | conferences@sbpub.com

Products EDGE3 Solution Detects, Analyzes Operator Behavior

E

Kymeta Delivers Satellite Mobile Internet Service Kymeta of Redmond, Wash., and Intelsat S.A. announced that Kymeta KĀLO internet access is now available with broad initial geographic coverage for trains and other mobile and fixed environments.

KĀLO internet services, powered by the IntelsatOne® Flex network, deliver broad connectivity when paired with the world’s only commercially available flat-panel, electronically steered satellite terminals from Kymeta as well as other satellite terminal

solutions. Kymeta™ KyWay™ terminals and mTennau7 antenna subsystem modules open new markets for the satellite industry and enable organizations that require highbandwidth mobile internet access to do business while on the move. For sectors such as rail that have traditionally had difficulty accessing reliable, affordable internet in the past, KĀLO provides a one-of-a-kind solution delivering up to 4 Mbps mobile internet service. Information: ww.kymetacorp.com.

New Southco Rotary Latch Solution Southco, Inc., a producer of engineered access products, has recently expanded its line of rotary latching solutions with the launch of the R4-81 Rotary Latch with Paddle Actuator. The newest addition to the R4 Rotary Latch series combines a compact rotary latch with a heavy-duty paddle actuator, enabling direct actuation without the need for a connected cable.

Available in

36 Railway Age // February 2018

corrosion-resistant plastic and diecast steel, the R4-81 offers a stylized paddle design with custom finish options and versatile key-locking security. By combining both rotary latch and actuator into one solution, the R4-81 enables simplified rotary system installation for a variety of transportation applications including rail and marine, off-highway, and heavy-duty truck.

Southco said the R4-81 has a high ultimate load for heavy-duty applications and an environmentally sealed design.

Information: www.southco.com/en-us.

DGE3 Technologies’ Train Driver Monitoring Solution combines vision analytics and artificial intelligence to identify distracted behaviors before they become unsafe habits. The system has been designed with a flexible architecture so it can take advantage of existing in-cabin cameras or leverage EDGE3’s complete end-to-end solution that includes camera hardware, DVR, vision analytics software and telematics.

Good behaviors detected include: hands on controls, eyes on the tracks, proper posture, limited cabin clutter and more.

Bad behaviors detected include: cellphone use, eating, drinking, smoking, hands out of position, averted eyes, elbows on controls, head bobbing, and unauthorized occupants.

Edge3, based in Tempe, Ariz., says its system is the only solution available that can directly identify specific types of distractions. The EDGE3 Technologies Solution analyzes the entire video feed directly, thus identifying habits or unsafe behaviors that could eventually lead to accidents.

EDGE3 states that the system decreases the need for manual spot checking by managers for driver performance; quickly zeroes in on content that matters most and use additional insight like driver rank metrics to better asses risk and performance, and improves overall operator performance. Information: www.edge3technologies.com.

railwayage.com

Ad Index Company

Phone #

Fax #

URL/Email Address Page #

Amsted Rail Group

312-922-4516

312-922-4597

kskibinski@amstedrail.com

C4

asbellcompanies

417-649-1269

417-649-1900

jenglert@asbellcompanies.com

29

Bomdardier transportation

215-441-1864

maryanne.roberts@rail.bombardier.com

19

Dixie precast

770-944-1930

770-944-9136

fbrown142@aol.com

32

genesee & Wyoming inc

203-202-8900

203-656-1092

corpcomm@gwrr.com

22

greenbrier companies the

800-343-7188

503-684-7553

Herzog railroad services inc

816-385-8233

jhansen@hrsi.com

18

Kansas City Southern

816-983-1372

dcarlson@kcsouthern.com

C2

L B Foster Company

412-928-3506

glippard@lbfosterco.com

22

Light Rail

212-620-7208

loram

763-478-6014

763-478-2221

sales@loram.com

3

Michigan State University

517-353-5663

517-353-0796

littlen@broad.msu.edu

30

Rail Freight

212-620-7208

conferences@sbpub.com 34-35

Rail Insight

212-620-7208

conferences@sbpub.com

26

railquip inc.

814-684-8484

770-458-4157

sales@railquip.com

23

402-346-4300

402-346-1783

bbrundige@sb-reb.com

C3

SALES@SIGNALCC.COM

30

jnewman@tccortho.com

10

railway education bureau softrail

888-872-4612

town & country crossings

636-227-8226

412-928-3512

gbrx.info@gbrx.com 20-21

conferences@sbpub.com 24-25

636-686-9194

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

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

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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 Jeanine Acquart 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7211 Fax: (212) 633-1325 jacquart@sbpub.com

AILWAY GE February 2018 // Railway Age 37

equipment Sale/Leasing

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RFP NOTICES

The Railway Educational Bureau Books

Railroad Resources

Guide to North American Diesel Locomotives

PUBLIC NOTICE

Jeff Wilson's new book, Guide to North American Diesel Locomotives, offers more than 300 pages of detailed information on diesel locomotives produced in North America from the 1930s to today. Hardcover.

MASSACHUSETTS BAY TRANSPORTATION AUTHORITY BKGNADL

CABOT YARD & MAINTENANCE FACILITY IMPROVEMENT CONTRACTOR FORUM Date: Wednesday, February 7, 2018 Time: 1:00pm – 3:00pm Location: State Transportation Building, 10 Park Plaza, 2nd Floor Board Room Suite 2890, Boston, MA 02116 Approximate Contract Value: $195M This project will be the sixth construction project issued to bid as part of the Massachusetts Bay Transportation Authority (MBTA) Red Line and Orange Line Infrastructure Improvements Program. The forum provides interested contractors the opportunity to learn more about the scope and schedule of the project, and to connect with other potential partners/subcontractors. Interested parties are recommended to attend.

PROJECT: This large-scale project involves two major components.

The first is the replacement of various elements throughout Cabot Yard located in South Boston, Massachusetts and includes improvements to drainage, track, traction power, signals and lighting. The second is the rehabilitation and modernization of the maintenance facility, originally built in the 1970’s and includes a new roof, lighting, doors, and windows; improved communications, AC/DC power and MEP systems; hazardous materials remediation; installation of new gantry cranes, wheel truing machine, electronics room, access platform, spray paint booth & other specialty equipment; and an upgraded carwash. Ultimately the Cabot Yard & Maintenance Facility Improvements project allows for the safe operation, proper maintenance, and reliable servicing of the new Red Line vehicle fleet.

BACKGROUND: To meet the goal of improving revenue service, reliability, and customer experience on the Red Line and Orange Line (RLOL), the MBTA has two major programs underway.

The first program, the New Vehicle Procurement Program, procures new Red Line and Orange Line vehicles, and the second program the Red Line and Orange Line Infrastructure Improvements Program, provides for critical infrastructure improvements and signal upgrades on the Red and Orange Line systems to support these new vehicles. The Cabot Yard & Maintenance Facility Improvements project forms a core part of the RLOL infrastructure program.

Please RSVP to Mike Fitzgerald at mfitzgerald@mbta.com

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Guide to Couplers and Draft Systems Learn maintenance procedures on various types of coupler and draft systems used on railway equipment. This book covers comprehensive information that identifies the various components, identification, inspection and gauging details for various systems used on railway freight cars. Now in soft cover format.

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railwayage.com

February 2018 // Railway Age 39

Perspective: Short Line & Regional

Five Things for 2018 To-Do List

T

he short line and regional railroad industry’s 2018 “to do” list is considerable, challenging and consequential. Here are five important items on that list.

The Tax Credit: To our great disappointment, the 45G short line rehabilitation tax credit was not included in 2017’s tax reform bill. Fortunately, the Senate Finance Committee has included 45G in a package it hopes to pass in subsequent legislation, and make retroactive for 2017. We will continue to make this critical extension our top legislative priority.

Regulation: Virtually any businessperson one talks to is encouraged by the Trump Administration’s effort to bring some common sense to an over-regulated economy. The recent U.S. Department of Transportation/Federal Railroad Administration decision to repeal the ECP (electronically controlled pneumatic) brakes mandate for certain trains carrying flammable hazardous materials is one example.

We still face a variety of proposed regulations, including mandatory two-person crews and duplicative training record-keeping, both of which bury us in paperwork with no corresponding safety benefit.

Short lines and regionals will continue to devote considerable time and money toward improving safety training and embedding a superior safety culture into each of their organizations, because it is the right thing to do. Those efforts will be greatly enhanced using the time and resources wasted on what may be well-meaning but ineffective government intervention.

2018 will bring an effort to increase truck size and weights

40 Railway Age // February 2018

The Short Line Safety Institute (SLSI): Championing the work of the SLSI remains a top priority. The SLSI has completed 42 Safety Culture Assessments of short line railroads in 24 states impacting 4,152 railroad employees; presented safety culture training at 27 meetings of short line railroads; and provided 23 webinars. Across the railroads assessed to date, there are highly evident positive practices, such as an employee’s comfort in approaching management with safety concerns; feeling accountable and responsible for safety; and mutual trust among employees, both labor and management. These attributes contribute to a better railroad safety culture.

Further opportunities for improvement are also evident, and the SLSI will be working to provide best practices and training in these areas for the industry.

Truck Size and Weight: It appears that 2018 will bring yet another effort to increase truck size and weight. Bigger trucks mean more expensive damage to our highways and bridges, more congestion, more danger for the motoring public and more diversion from rail to truck. While big-truck advocates are plowing old ground, this time around they have added a new twist, asking for a 2,000-pound weight increase for trucks powered by electricity. New technologies will inevitably shape the debate on transportation issues, but they should not be used as a backdoor approach to allowing bigger trucks on the nation’s highways.

Carload Traffic: This is the lifeblood of the short line industry, and we need to do a much better job of increasing that traffic.

In particular, we need to work hard at finding the sweet spot that makes developing carload traffic a win-win situation as our Class I partners assess their position in a changing marketplace.

Three things need to be done: First, we need better data, and tools to analyze that data. We need to know with far more certainty what is moving on the system and where, and why there are interchange issues or infrastructure problems that hinder our ability to be truck-competitive. That data exists today but is spread among multiple parties and sources. Railroads and their shippers need to collect and

Proposed regulations threaten to buRy short lines in paperwork.” organize that data in a much more systematic and analytical way.

Second, we need a greater willingness to communicate candidly about what the data is showing. By “we,” I mean all the parties: short line, Class I and shipper. This has been a difficult problem between short lines and their Class I connections, where each side often rationalizes why a failure to capture traffic is the fault of the other. We operate as a network, and we can’t improve it if the players aren’t on the same page.

Finally, we need a digital platform if we are going to compete effectively in this new pushbutton economy. A number of our short lines are putting together pilot projects with individual shippers to test how we can build just such a platform. The same kind of Uber-type interface that allows us to plan our personal mobility would improve freight mobility on the rail network. If these pilot projects are successful, we believe they could form the basis for a much more competitive railroad service offering that will significantly grow carload traffic.

If we can make progress on all these items in 2018, it will be a successful year for short lines and regionals, their employees and their customers.

LINDA DARR President ASLRRA

railwayage.com

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Part Title 210 Railroad Noise Emission Compliance Regulations 215 Freight Car Safety Standards Updated 4-3-17.

216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment Updated 4-3-17.

217 Railroad Operating Rules Updated 4-3-17.

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221 Rear End Marking Device-passenger, commuter/freight trains

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Part 229: Locomotive Safety Standards

Current FRA Regulations Item Code

49 CFR Part 243, Training, Qualification, and Oversight for Safety-Related Railroad Employees. In response to a petition for reconsideration of a final rule, FRA proposes to amend its regulations (Training, Qualification, and Oversight for Safety-Related Railroad Employees) by delaying certain implementation dates an additional year. FRA previously delayed the regulations' implementation dates for one year in a final rule published May 3, 2017 (May 2017 Final Rule).

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