Railway Age June 2019

June 2019

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

SPEED

RESTRICTION? CPC-1338 Could Slow Repairs, Retrofits

PREVENTIVE-PREDICTIVEPRESCRIPTIVE Track Geometry Technology Evolves

TRANSIT-ORIENTED development, ONTARIO P3s Key For Growth

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August 2017 // Railway Age 1

Alstom / Ramón Vilalta

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AILWAY GE

JUNE 2019

31 FEATURES

17

CN’s Next Century

19

Equipment Leasing Guide

31

Driven by supply chain integration

Perplexing market, tepid mood

Track Geometry Evolution Preventive, predictive, prescriptive

37

Rolling Asset Health

43

TOD in Ontario

Big Data plus remote monitoring

P3s key to transit growth

DEPARTMENTS 4 6 8 48 48 48 49 50 50 51

Industry Indicators Industry Outlook Market People 100 Years Ago Events

NEWS/COLUMNS 2 10 16 52

From the Editor Update Watching Washington Short Line/Regional Perspective

Products Professional Directory Classified Advertising Index

On the Cover: A tank car inspector at Greenbrier’s GIMSA facility.

Photo: William C. Vantuono

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 220, No. 6. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, PO Box 1407 Cedar Rapids, IA. 52406-1407, Or call toll free (US Only) 1-800-553-8878 (CANADA/INTL) 1-319-364-6167. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital).

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June 2019 // Railway Age 1

FROM THE EDITOR

AILWAY GE

“Any Shareholder Can Cash A Dividend Check”

P

aul Denton retired in 2006 as President and CEO of short line Maryland Midland Railway (MMID) following a distinguished railroading career that started with CSX predecessor Baltimore & Ohio in TOFC, chemicals and minerals marketing. He can teach us a thing or two about our industry’s current state of affairs, which these days are, for lack of a better word, “interesting.”

Yes, we do live in interesting times, with discussions, meetings, hearings, etc., on Precision Scheduled Railroading and Amtrak occupying a lot of space. Here’s a few interesting observations from Denton, who’s “been there, done that” many times.

On PSR: “I wonder, with respect to the Class I’s [except BNSF], if this short-run homage to Wall Street is nothing more than an excuse to hide behind. For example, if any Class I grew its carload volume by 25%, increased the top line 35% and, after taxes, net 45%, would any shareholder ask what the operating ratio was? I don’t think any Class I today would be able to increase its carload volume 10%, much less be able to handle it.

“When we grew MMID substantially and began to pay significant cash dividends, sometimes with extras thrown in, not one shareholder ever asked me what our OR was. We got lots of nice compliments for the good results and dividends (we were a ‘C’ corporation). Yes, we were

small and not publicly traded, and that does make a difference. But any shareholder can cash a dividend check. They can’t cash a quarterly report with a blurb about the latest OR while customers leave in droves for trucks.”

Amtrak is “broken,” a “politically organized fix that got the Class I’s out of the passenger business in 1971. It helped save the Class I’s, but many didn’t expect it to last its first 25 years, much less until now.

Attempting to maintain a 1950s passenger train system is very costly, not needed and only benefits politicians seeking re-election, rail labor and railfans.

“The Class I’s have no financial interest in playing ball with Amtrak—and no moral or ethical recollection of, or interest in, how the government saved their hides in 1971. As a corporation, Amtrak needs to be given a decent burial. To avoid the never-ending AAR/Amtrak wrangling in the future, the DOT should call a ‘Come to Jesus’ session with both, and state—after deliberate planning (think 4R Act)—that it is going to encourage and financially support infrastructure and rolling stock for a 21st-century, market-based, privately owned and operated (think Virgin Rail USA/Brightline) U.S. passenger rail system.”

So Paul, care to tell us how you really feel?

Anyone else want to weigh in? I’m always ready to listen.

WILLIAM C. VANTUONO Editor-in-Chief

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Industry Indicators “It Won’t Win Any Prizes, But It Could Have Been Worse” Cautious optimism seems to be the mood at the Association of American Railroads. “Rail traffic in April 2019 won’t win any prizes, but it could’ve been worse,” AAR noted last month. Total U.S. rail carloads were down 0.9% from April 2018. “That’s the third straight year-overyear monthly decline for total carloads, but it’s much better than the 8.9% decline in March and the 2.7% decline in February,” AAR noted.

“Broad market forces related to the economy and various issues related to specific commodity markets are always impacting rail carloads, but in March and into April, rail carloads were also significantly impacted by flooding in the Midwest, especially in Nebraska and Iowa.”

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

TRAFFIC ORIGINATED CARLOADS

Four WEEKS ENDING April 27, 2019

MAJOR U.S. RAILROADS

by Commodity

APRIL ’19

APRIL ’18

% CHANGE

61,139 (+0.4%)

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

93,273 3,047 36,346 23,608 130,842 51,552 322,199 4,469 13,917 20,611 24,347 15,104 38,736 14,833 67,457 95,628 16,007 31,548 14,337 23,683

97,878 3,098 36,943 24,955 130,877 39,794 316,467 3,818 14,439 22,055 23,186 17,915 39,014 16,555 71,332 106,378 16,861 30,588 13,753 24,768

-4.7% -1.6% -1.6% -5.4% -0.03% 29.5% 1.8% 17.1% -3.6% -6.5% 5.0% -15.7% -0.7% -10.4% -5.4% -10.1% -5.1% 3.1% 4.2% -4.4%

Executives, Officials, and Staff Assistants

Total U.S. CarLoadS

1,041,544

1,050,674

-00.9%

345,170

332,751

1.0%

1,386,714

1,383,425

0.02%

Total employees: 144,223 % change from APRIL 2018: -0.1%

Transportation (train and engine)

7,830 (-0.6%)

CANADIAN RAILROADS

Professional and Administrative

total CANADIAN carloads

11,341 (-0.5%)

COMBINED U.S./CANADA RR

Maintenance-of-Way and Structures

32,069 (-0.2%)

Maintenance of Equipment and Stores

26,254 (-0.2%)

Transportation (other than train & engine)

5,590 (+1.0%)

Source: Surface Transportation Board

near-negligible changes Figures released by the Surface Transportation Board show Class I total railroad employment dropped an almost negligible 0.1% in April 2019, measured against April 2018. Of the six categories, two—Transportation (train and engine) and Transportation (other than train & engine)—saw slight increases, 0.4% and 1%, respectively. The two Maintenance categories each saw decreases of 0.2%, while the Executive and Professional categories dropped only slightly more, 0.6% and 0.5%, respectively.

4 Railway Age // June 2019

Intermodal

four WEEKS ENDING april 27, 2019

MAJOR U.S. RAILROADS

by Commodity Trailers Containers TOTAL UNITS

APRIL ’19

APRIL ’18

% CHANGE

87,782 968,364

99,102 999,876

1,056,146

1,098,978

-11.4% -3.2% -3.9%

0 289,458 289,458

3,606 265,075 268,681

-100.0% 9.2% 7.7%

87,782 1,257,822

102,708 1,264,951

-17.0% -1.0%

1,345,604

1,367,659

-1.6%

CANADIAN RAILROADS Trailers Containers TOTAL UNITS

COMBINED U.S./CANADA RR Trailers Containers

TOTAL COMBINED UNITS

Source: Rail Time Indicators, Association of American Railroads

railwayage.com

TOTAL U.S./Canadian CARLOADS, APRIL 2019 VS. april 2018

1,386,714

AILWAY GE

1,383,425

april 2019

april 2018

Short Line And Regional Traffic Index CARLOADS

by Commodity

ORIGINATED APRIL ’19

ORIGINATED APRIL ’18

% CHANGE

51,237 23,126 29,051 11,400 26,160 8,014 10,827 2,128 18,601 11,391 2,927 2,415 18,304 14,741 45,074 10,717 79,244

46,056 22,899 30,307 11,676 27,328 6,298 10,299 3,048 18,774 10,886 2,087 2,336 18,426 12,945 39,132 10,516 82,345

11.2% 1.0% -4.1% -2.4% -4.3% 27.2% 5.1% -30.2% -0.9% 4.6% 40.2% 3.4% -0.7% 13.9% 15.2% 1.9% -3.8%

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

Copyright © 2019 All rights reserved.

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted)

ARE YOU A RAILROAD OR SUPPLIER SEARCHING FOR JOB CANDIDATES?

278,000 2018

270,000 262,000 254,000 246,000

2017

238,000 230,000

2019

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

Data are 6-week moving average originations, are not seasonally adjusted, do not include

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

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Visit http://bit.ly/railjobs To place a job posting, contact: Jeanine Acquart 212-620-7211 jacquart@sbpub.com

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

8/17/17 10:59 AM

Industry Outlook

KCS Redefines Two Service Metrics In an effort to provide a more complete view of customer service and operational performance on its network, Kansas City Southern (KCS) has revised the definitions of two key service metrics—Operational Cars Online and Gross Velocity—that it uses to measure operating performance.

Formerly Cars Online, Operational Cars Online is now defined as: “A car level metric representing the number of cars on the KCS network that are not at a customer’s location.”

Gross Velocity, formerly Train Speed, is now: “A train-level metric measuring the average velocity of a train between its origin and destination stations, calculated as the sum of the miles traveled divided by the sum of total transit hours.”

Transit hours, KCS noted, are measured by calculating the difference between a train’s origin departure and destination arrival date and times broken down by segment across the train’s route. KCS added that this metric includes all time spent at intermediate locations between a train’s origin and destination (including all crew changes, terminal dwell, delays and incidents).

“As part of its transition to a precisionscheduled network, KCS is pleased to 6 Railway Age // June 2019

provide a more complete view of its operational performance to its customers and stakeholders,” stated KCS Executive Vice President Precision Scheduled Railroading Sameh Fahmy. “These revised metrics will give stakeholders a more accurate understanding of KCS’s operational performance as we strive to improve customer service.”

KCS appointed Fahmy as Executive Vice President PSR in February. He reports to President and CEO Patrick J. Ottensmeyer.

Fahmy has many years of experience implementing and operating PSR networks.

Recently, he served as a consultant at CSX, where he worked alongside the late Hunter Harrison and his successors on adapting CSX’s mechanical and engineering departments to PSR. His accomplishments at CSX include mechanical and engineering expense reductions and an improvement in fuel efficiency.

Prior to CSX, Fahmy spent 23 years at CN—also working for part of that time with Harrison—most recently as Senior Vice President Engineering, Mechanical and Supply Management. He oversaw the mechanical and engineering functions, “improving their safety record, reducing expense, train delays and increasing freight car and locomotive availability,” KCS noted.

The HOUSE AND SENATE bills to make the short line railroad 45G tax credit permanent, HR 510 and S 203, respectively, have recently gained momentum.

Since rail industry members met with hundreds of Congressional Offices on Railroad Day on Capitol Hill on May 8 (p. 52), the House bill now has 202 co-sponsors and the Senate bill has 40 co-sponsors.

“The short line 45G tax credit is simply good public policy—putting more private dollars to work to fund infrastructure rehabilitation and safety improvements on small-business railroads that provide the first and last mile of the U.S. freight rail system,” said Chuck Baker, President, American Short Line and Regional Railroad Association (ASLRRA).

“The short line tax credit has garnered broad support in both parties and in both houses of Congress—in the House, there are 101 Democrats and 101 Republicans on record saying this is a program that continues to make sense and should be made permanent.

“On the House Ways & Means Committee in particular, more than half of the committee members, including 14 Democrats and eight Republicans, are on record with that same message. It sends a strong message to Congressional leadership that the time to act is now. We are also encouraged to see the Senate Finance Committee call for action on expired credits, creating task forces for the review and evaluation of the various expired tax provisions, including the short line tax credit.”

The 45G tax credit is a federal income tax credit for track maintenance conducted by short lines (Class III) and regional railroads (Class II) in the U.S., including maintenance conducted by contractors. The credit granted an amount equal to 50% of qualified track maintenance expenditures and other qualifying railroad infrastructure projects. railwayage.com

William Beecher

45G Gains Traction

Keeping cities moving with ease takes ingenuity The S700 low-floor light rail vehicle (LRV) is the latest advancement of Siemens’ S70 platform, renowned for its superior engineering and high performance. The innovative S700 delivers a new passenger experience with improved passenger flow and accessibility.

usa.siemens.com/mobility

Market Talgo, SYSTRA Tapped for Rebuild SCRRA awarded a Talgo-SYSTRA tandem a contract worth $138.9 million to rebuild up to 121 Metrolink-operated Bombardier railcars. The base order is for 50 cars with an option for up to 71 more. The work includes updating control voltage and battery systems, lighting, trucks and passenger communications; remodeling restrooms; providing overhauled, eco-friendly HVAC systems; updating door operators and controls; repainting exteriors; providing new seat cushions and coverings; and installing new floor covering. The work will be completed at Talgo’s facilities in Milwaukee, Wis., with delivery of the first cars to Metrolink expected 450 days following the notice to proceed.

WORLDWIDE

NORTH AMERICA

The Council of Ministers of the German State Of Saarland has approved a cooperation and financing agreement with the French region of Grand Est for joint procurement of a new fleet of trains for cross-border regional services. Under the agreement, Grand Est will order 30 trains for operation in Germany and France from December 2024. Ten of the trains will be used in Saarland. Purchase costs are capped at 9.4 million euros per train, valuing the order at 282 million euros. Acquisition costs will be borne by Grand Est, with the partners paying a mileage-based usage fee.

Trinity Industries, Inc. subsidiary TrinityRail Maintenance Services, Inc. (TRMS) is constructing a new maintenance facility in Shell Rock, Iowa. TRMS has chosen a 230-acre site for its expansion, which is expected to employ more than 250 people following Trinity’s planned capital investment of approximately $60 million in the Butler County, Iowa, community. Upon completion, the new facility will provide services such as repairs and maintenance, coatings, cleaning, inspections and testing.

The site’s co-location with the Iowa Northern Railroad and optimal access to the Class 1 railroad network were significant factors in Trinity’s decision to build a new railcar maintenance facility in Shell Rock. TRMS aims to have the new facility operational by the end of 2020 and to be accretive to consolidated financial results by the end of 2021. The development is not expected to impact the company’s 2019 earnings per share guidance.

Virgin Trains USA (formerly Brightline) awarded contracts to Hubbard Construction Company, Wharton-Smith Inc.,

8 Railway Age // June 2019

The Middlesex Corporation, Granite and HSR Constructors for construction of Phase 2 of its expansion between Orlando and South Florida. The contractors will be responsible for the development of 170 miles of new track into the completed intermodal facility located in the new South Terminal at the Orlando International Airport (MCO), representing a total private investment of $4 billion. The construction of Phase 2 encompasses four zones, with Zone One and Zone Two work—which includes the area of the MCO and the Virgin Trains Maintenance Facility—beginning May 21, Virgin Trains USA noted.

Full-scale construction on Zone Three and Zone Four is imminent. The project “will include the laying of 490,000 ties and transporting 2.35 million tons of granite and limestone by 20,000 railcars. Additionally, approximately 2 million spikes and bolts will be hammered and put in place over the next 36 months. During this process, Virgin Trains USA Phase 2 will generate more than 10,000 jobs and over $650 million in federal, state and local tax revenue.” Construction is expected to be completed and service will begin between South Florida and Orlando in 2022. railwayage.com

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SPEED PERFORMANCE RELIABILITY

Update

FRA cancels

C

iting that “no regulation of train crew staffing is necessary or appropriate for railroad operations to be conducted safely at this time,” the Federal Railroad Administration (FRA) on May 23 cancelled its April 2014 Notice of Proposed Rulemaking (NPRM) to mandate a minimum of two crew members on every freight train. Additionally, FRA is preempting— under Article I, Section 8 of the Constitution, which gives the federal government dominion over interstate commerce—all state laws mandating crew size within state borders.

Following numerous comment submissions during the past five years from interested parties on both sides of the issue, FRA determined, in part, that rail safety data as well as comments to the NPRM “do not support a train crew staffing rulemaking.” As well, “a train crew staffing rule would unnecessarily impede the future of rail innovation and automation.” FRA noted that its withdrawal of the NPRM “is an affirmative decision not to regulate with the intention to preempt state laws.”

The Association of American Railroads quickly lauded FRA’s decision to pull the plug. “Train crew size has been a matter of collective bargaining between railroads and 10 Railway Age // June 2019

their employees for decades,” AAR noted.

“Over that time, the safety of train operations has steadily improved even as crew sizes have been reduced, through the bargaining process, from five or more down to today’s standard of two—and in some cases, one.

“The action by the FRA directs federal and state lawmakers to stop pushing crew size legislation and let railroads maintain that record of bargaining with their dedicated and professional workforce to continue to modernize rail operations while enhancing safety.

“Both [USDOT] Secretary Chao and [Federal Railroad] Administrator Batory have made clear that safety is of paramount concern; new technologies can be powerful tools for achieving safety; and overly prescriptive regulations can chill innovation.

FRA’s careful, evidence-driven conclusion that there is no safety justification to lock railroads into their current crew size practices is consistent with these policies and recognizes the technology revolution occurring throughout the railroad industry.

Positive Train Control (PTC) … is one game-changer; others not yet imagined may follow. Allowing railroads the flexibility to adjust their operations to reflect the

capabilities of technologies like PTC will help advance railroads’ mission to achieve an accident-free future.”

Labor and management have been negotiating crew consist size since the Railway Labor Act was passed in 1926. Remarked one industry observer, “The people best-qualified to determine how to safely operate a railroad are those actually doing the work.

Crew consist size should not be determined by politicians or regulators.”

Rail labor—though sources told Railway Age that, privately, labor agrees that crew consist size should be negotiated, not regulated—lashed out at FRA’s decision.

overly prescriptive regulations can chill industry innovation.” railwayage.com

William Beecher

crew-size NPRM

?

?THEN

NOW D N A T I E S T O O U R PA S T — A N D O U R F U T U R E Join us for the Railway Tie Association's 101st Annual Symposium and Technical Conference.

RA I LWAY TI E AS S O C I ATI O N 1 0 1 ST A N N U A L C O N F E R E N C E

Continuing our Centennial Celebration, let's remember where we've been as we look ahead to what's in store. We’ll cover industry issues and technical trends, with a touch of Southwestern color, couture and flair.

The perfect balance awaits you in Tucson. Learn and network amid natural beauty, exotic wilderness and plenty of activities.

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The latest research and tie market innovations

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Railroad purchasing forum with updates on tie demand

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Resource procurement and utilization

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L O E W S V E N TA N A C A N YO N

Luncheon keynote by Genesee & Wyoming President & CEO Jack Hellmann

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The Turquoise & Tapas Grand Awards Reception (dinner with a twist)

TUCSON , ARIZONA

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A look back and a look ahead

OCTOBER 15-18

AND WHEN T HE WORK IS DONE ,

take time to enjoy relaxing music, off-road tours, jewelry making, The Best of the Barrio Experience, and much more.

T O R E G I S T E R , V I S I T: rta.org/2019-conference #RTA100TH for 2019 conference tweets Check out our conference app at: eventmobi.com/rta2019/ © 2019 The Railway Tie Association

115 Commerce Drive, Suite C | Fayetteville, GA 30214 Voice: (770) 460–5553 | Fax: (770) 460–5573 | ties@rta.org | www.rta.org

Update

NTSB: Inadequate Planning, Training Caused Amtrak 501 Wreck Failure to provide an effective mitigation method for a hazardous curve and inadequate training of a locomotive engineer is what led to the derailment of an Amtrak

passenger train that hurtled off a railroad bridge and onto a busy highway in DuPont, Wash., on the morning of Dec. 18, 2017, according to the National Transportation Safety Board (NTSB).

On that day, Amtrak Cascades train 501, on its inaugural run on the Point Defiance Bypass between Seattle, Wash., and Portland, Ore., derailed on an overpass as it entered a 30-mph curve at approximately 78 mph. The lead locomotive and four railcars fell onto Interstate 5, where they struck eight vehicles. Three of the 77 passengers were killed, and 57 passengers and crewmembers aboard the train and eight people on the highway were injured.

The NTSB said during a May 21 public meeting that the Central Puget Sound Regional Transit Authority “failed to adequately address the hazard associated with a curve that required the train to slow from 79 mph to 30 mph in order to safely traverse it.

Positive Train Control was not in use at the curve. In addition, the engineer was somewhat familiar with the route from observational rides and three training runs, but the accident was the first time he operated the train on that route in revenue service.

[Thus], the engineer had insufficient training on both the route and the equipment.�

RENTAL SYSTEMS, INC.

40+ YEARS OF QUALITY TRUCKS AND EQUIPMENT

12 Railway Age // June 2019

Shutterstock

PHILADELPHIA 800.969.6200 DENVER 800.713.2677 DANELLA.COM/RENTALS railwayage.com

Update Furthermore, Amtrak had equipped— though it wasn’t required to by the Federal Railroad Administration (FRA)—the locomotive with an inward-facing image recorder that provided investigators with both a visual and audio recording of crewmember activities during the accident. The recording allowed investigators to reconstruct a second-by-second account of the conductor and engineer’s actions and words throughout the entire trip. According to the NTSB, the pair engaged in brief conversations throughout the trip; as the train passed the only sign warning of a speed reduction prior to the accident curve, the engineer was not engaged in conversation and was looking ahead.

The engineer told investigators that he did not see the speed reduction sign. Recordings show that he took no action to reduce speed prior to the derailment. Investigators concluded that the brief conversations between the engineer and the conductor “did not distract them from their duties or their abilities to identify the speed reduction sign.”

railwayage.com

NTSB investigators also said the trainset involved in the crash, which did not meet current crashworthiness standards and was only permitted to operate through a grandfathering agreement with the FRA, “was structurally vulnerable to high-energy derailments or collisions.”

Responsibility for the planning, safety and oversight of the Cascades service involved numerous organizations, such as Amtrak, the Washington State Department of Transportation (WSDOT), the FRA and the Central Puget Sound Regional Transit Authority. Investigators found there was “a general sense that none of the participants fully understood the scope of their roles and responsibilities as they pertained to the safe operation of the service, which allowed critical safety areas to be unaddressed.”

On the heels of the investigation, the NTSB issued a 26 safety recommendations to the FRA, the Washington State Department of Transportation, Oregon Department of Transportation, Central Puget Sound Regional Transit Authority and the United

States Department of Defense.

WSDOT said it “will work with Amtrak to follow [an] NTSB recommendation to remove the [Cascades service] Talgo Series 6 trainsets from service as soon as possible.

Amtrak is working with WSDOT to determine how to address equipment needs moving forward, and how we’ll provide Amtrak Cascades service without the Talgo Series 6 trains. There are four Talgo Series 6 trainsets currently in service, two sets owned

by WSDOT and two sets owned by Amtrak.

Evaluating what alternative passenger equipment is available and how scheduled train service in the Pacific Northwest is affected will inform our next steps.”

Talgo disputes NTSB’s claim that its railcars are unsafe, and said the Board ignored technical information it provided. “Talgo has been servicing the Cascades Corridor for more than 20 years with an impeccable safety record, thanks to the nature of its technology,” Talgo Vice President Business Development and Public Affairs Nora Friend told the Seattle Times.

June 2019 // Railway Age 13

Update Metro-North Touts Performance, Way Ahead

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MTA Metro-North Railroad President Catherine Rinaldi (above) last month said that Metro-North’s Way Ahead plan has been a boon with regard to safety, service, infrastructure and customer communication, and has even helped the company’s on-time performance exceed expectations.

Metro-North’s 2019 on-time performance through April 30 was 95.7%, 2.1 percentage points higher than last year, with a 74% reduction in canceled and terminated trains and a 50% reduction in trains delayed by more than 15 minutes.

Way Ahead, started in late 2018, “aims to serve as a roadmap that details actions to enhance safety, service, infrastructure, communications and transform customers’ day-to-day commuting experience,” Rinaldi noted.

Some of Way Ahead’s accomplishments include: expansion of TRACKS, Metro-North’s free community outreach program designed to educate and promote rail safety, to more than 100,000 reached in 2018, with the goal to reach 105,000 in 2019; enhancement of 78 grade crossings with LED lights; expansion of communications skills training for employees, with another 1,100 operations employees trained thus far; station ambassadors are now in place at the six busiest Metro-North stations: Stamford, White Plains, Harlem-125th Street, Fordham, New Rochelle and Croton-Harmon; trackside cleanup in the Bronx, with the removal of 47 tons of waste; and track work resulted in a 46% decrease in maintenance defects since 2014, and an 86% decrease in safety defects since 2014.

The railroad said its vision through Way Ahead “is to set the standard for safety, reliability and innovation in the delivery of excellent customer service. Metro-North has realized key aspects of its vision, and that means customers can expect safety upgrades, improved communications, reinvigorated stations, renewed infrastructure, which all translates to an overall more positive commuting experience.”

“The transformation of Metro-North Railroad is no longer a plan, it’s happening,” said Rinaldi. “Operating from our core principles of safety, integrity and innovation, and all the while listening to commuters, we’re changing the railroad so that riding Metro-North is a more positive experience for our customers. We won’t rest on our laurels, and there’s still much work to be done, but we are all well on our way to developing an even stronger Metro-North for the future.” railwayage.com

Update FRA NPRM Aligns Engineer, Conductor Certification

The Federal Railroad Administration last month announced a Notice of Proposed Rulemaking (NPRM) to update the regulation that governs locomotive engineer qualification and certification to make it consistent with the corresponding regulation for conductors. The proposed rule would adopt the conductor certification regulation process established in 2012 by making conforming amendments to the engineer certification regulation, which was first issued in 1991 and last amended in 2000.

“The proposed revisions would modernize locomotive engineer certification regulations to match those for train conductors, and provide regulatory efficiencies and cost savings without compromising safety,” FRA Administrator Ronald L. Batory (above) said. “The proposal would streamline the engineer certification process, and reduce paperwork burdens for the responsible parties. Consistent with Executive Order 13771, the proposed rule would reduce overall regulatory reporting and cost burdens for railroads and locomotive engineers. Harmonization of the conductor and engineer regulations would also provide greater clarity to locomotive engineers.”

The NPRM includes the following five proposed changes to Title 49 of the Code of Federal Regulations, Part 240: • Clarifies locomotive engineer certification requirements (Part 240) and aligns them with conductor certification requirements (Part 242) to make it easier for railroad certification managers to become familiar with and administer both regulations.

• Reduces the reporting burden of a person’s former employer to clarify that only certain listed information in the individual’s railroad service record that directly relates to FRA’s requirements in the certification regulation needs to be shared.

• Defers the requirement for railroads to seek a waiver from annual testing of certified locomotive engineers when individuals take an extended absence from performing service requiring certification.

• Modernizes the dispute resolution process by reducing the paperwork burdens for both employees and railroads and allowing for web-based dockets.

• Simplifies the submission process by which locomotive engineer qualification and certification programs are modified by allowing electronic submissions.

FRA is seeking comments, which may be submitted to the docket for the proceeding FRA-2018-0053, and are due by July 8, 2019. railwayage.com

CONTACT Mary Jo Balve Global Trade Show Services, Inc. 33 Prince Place, Little Silver NJ 07739 T +1 732 933 1118 mjbalve@globaltradeshow.com

June 2019 // Railway Age 15

Watching Washington

Amtrak Bullying Now Targets SEPTA

H

ere we go again with Amtrak.

While complaining that host freight railroads unreasonably impair its legal right to passenger-train priority handling, Amtrak is employing thug-like tactics to escape federal law and extract greater rents and other concessions from commuter-train operators utilizing Amtrak infrastructure including track and stations.

Amtrak is tightening the screws on three commuter operators using its infrastructure—Virginia Railway Express (VRE), Chicago’s Metra and now the Southeastern Pennsylvania Transportation Authority (SEPTA).

In 2015, Amtrak lobbyists buried in a 1,030-page highway bill language to redefine its Northeast Corridor (NEC) to include track owned by Amtrak’s Washington Terminal Company. VRE’s contract operator, Keolis Transportation—which won a competitive bid to replace Amtrak years earlier—uses that track to reach Washington Union Station.

Had the provision—which no member of Congress admitted to sponsoring—not been excised after this column exposed the maneuver, it would have undermined VRE’s ability to seek Surface Transportation Board (STB) relief from Amtrak abuse.

In 2018, Amtrak sought to purge the common carrier status of Chicago Union Station (CUS) by merging it into Amtrak.

The intent, says Metra, which carries 100,000 passengers weekly and accounts for 83% of CUS arrivals and departures, is to

AMTRAK has

SUED SEPTA in federal court

16 Railway Age // June 2019

block Metra’s ability to seek STB relief were Amtrak to impose discriminatory access fees. A Metra challenge is pending before the STB. Amtrak just can’t stop emulating 19th century railroad tycoons—termed “robber barons” in 1859 by The New York Times.

Amtrak’s latest assault on the public interest is directed at SEPTA, which operates over Amtrak’s NEC some 200 daily commuter trains serving 40 stations and carrying 12 million passengers annually.

Amtrak has sued SEPTA in federal court to end SEPTA’s rights to operate over the NEC. Success would allow Amtrak unilaterally to impose hefty station-rent increases, or sell or lease the stations for commercial development.

SEPTA’s opposition relies on a congressional mandate laid out in at least three statutes—the 1973 Regional Rail Reorganization (3-R) Act, the 1976 Railroad Revitalization and Regulatory Reform (4-R) Act, and the 1981 Northeast Railroad Service Act (NERSA). They created and transferred to SEPTA and other NEC commuter railroads permanent rights to operate over the NEC and use the passenger stations.

In exchange, SEPTA bears all station costs directly, and pays Amtrak for use of its tracks under congressionally established cost allocations. SEPTA says it invested more than $228 million over the past 15 years in station capital improvements.

Amtrak pays nothing toward six stations SEPTA and Amtrak share.

If the federal regime that has governed NEC commuter operations for the past 40 years is overturned, SEPTA will be at Amtrak’s mercy, as Amtrak has attempted with VRE and Metra. Absent Amtrak’s consent, SEPTA would lose the right to operate commuter services over the NEC and, crucially, be unable to secure STB oversight of Amtrak terms affecting access.

Notable is that SEPTA’s lead counsel in this matter, Paul A. Cunningham, spent much of his career representing Class I railroads. He has lived with these statutes since working as a staff attorney for the Senate Commerce Committee where

AMTRAK’S ACTIONS ARE OVERRIPE FOR CONGRESSIONAL CORRECTION.” he helped draft the 3-R and 4-R acts. He later was counsel to Conrail when it was given the mandate to operate, and then transfer to SEPTA, commuter services once operated by the fallen f lags consolidated into Conrail.

Cunningham declined to comment on the pending cases.

Unlike squabbles over substituting jelly sandwiches for hot meals, and adjusting routes and schedules to ref lect budgetary realities and changing demographics, Amtrak, in dealings with commuter railroads, is engaging in incomprehensible pretensions to avoid its public interest obligations, shield itself from regulatory oversight and threaten, unchecked, commuter operators with service disruptions and even eviction unless they pony-up more cash.

Thuggish behavior intended to weaken other financially strapped public transportation entities so as to make Amtrak stronger is a reprehensible affront to public trust. Amtrak should be better than that. But with no sign of Amtrak remorse or abatement, Amtrak’s actions are overripe for congressional oversight and correction.

FRANK N. WILNER Contributing Editor railwayage.com

CN 100

Charting the

NEXT CENTURY

By Peter Diekmeyer, Canadian Contributing Editor

At CN, supply chain integration will drive long-term growth.

L

aunching celebrations to mark the 100th anniversary of its founding, CN President and CEO JJ Ruest, Railway Age’s 2019 Railroader of the Year, said at last month’s annual general meeting in Montreal that long-term growth will come from deepening rail-centric supply chains in the consumer products and commodities sectors. Near-term, high-single-digit revenue ton-mile growth and price increases above industry inflation rates are expected.

Key to growth is crude by rail, which has seen short-term softness due to declining spreads between Western Canada Select and West Texas Intermediate crude. Experts say that the “sweet spot” for CBR is when Canadian products (currently between US$10 and US$12 per barrel cheaper than U.S. alternatives) sell at a US$15 per barrel discount. The good news for CN is that continued difficulties in bringing pipeline capacity on stream mean that the mid-term outlook is decidedly bullish. Volumes are expected to ramp up during the second half.

CN also hopes to benefit from new resource export business in the middle of second quarter. These include supply

railwayage.com

deals with the Vista mine to ship thermal coal, and an agreement to deliver Alberta propane to Prince Rupert, where product will be then shipped to Asia. CN is also profiting from continued growth in the hydraulic fracking sector by partnering to secure frac sand volumes in the Northeast U.S. and Western Canada markets. Lumber and grain shipments also are expected to remain solid.

CN’s big worry on the consumer products front remains a sluggish motor-vehicles sector. OEM production backlogs are expected to generate “solid” traffic growth in the second quarter. A vehicle and parts shipments contract renewal with Ford will also help as will new automotive sector import business. However, reports of large inventories of unsold motor vehicles on North American lots raise questions about future demand, as effects from last year’s U.S. Federal Reserve interest rate hikes make their way through the financial system.

That said, a relatively weak Canadian dollar (at US$0.75) should continue to support exports on CN’s North-South routes.

Infrastructure-wise, CN’s biggest challenge remains network capacity issues.

According to Ruest, these are gradually being addressed by record multi-year capex investments to restore fluidity to the network and handle growing volumes.

Projects range from yard expansions to new sidings and double-tracking slated to create more areas where trains can meet and pass.

The company also expects to take delivery of 195 new Wabtec (GE) Tier 4 Evolution series locomotives (following the acquisition of 55 units in 2018) as well as 1,000 new-generation higher-capacity grain hopper cars during the coming two years.

In all, C$3.9 billion in capital spending is projected during 2019, up from C$3.5 billion during 2018.

CN is also making renewed efforts on the safety front—a company priority—in the wake of the tragic death of an employee last year. The company added four automated training inspection portals during 2018 and has slated an additional three, coupled with eight autonomous track inspection cars during the coming two years. These investments, coupled with the recent acquisition of TransX, one of Canada’s largest transportation providers, should further boost efficiencies.

June 2019 // Railway Age 17

Equipment equipment Leasing leasing

PERPLEXING MARKET,

TEPID MOOD

W

All photos: William C. Vantuono

By DAVID NAHASS, FINANCIAL EDITOR elcome to the Railway Age 2019 Guide to Equipment Leasing.

The market for railcars continues to polarize, perplex and flummox investors, manufacturers and operators of both tank and general freight railcars. The tepid mood at Rail Equipment Finance in March 2019 has continued into a difficult spring that has been filled with flooding, service disruptions and system delays. The continuing evolution of PSR (Precision Scheduled Railroading) through the railroad system, along with general decreases in loadings for the calendar year to date, continues to put negative pressure on demand for railcars in the lease markets.

Tank cars remain the brightest spot in the market right now.

Manufacturing continues apace for the time being. Deliveries for 1Q2019 stayed in the 13,000-ish range, holding steady at about that level for five out of the previous six quarters. New orders were at their lowest number since 4Q2014. Prices for new railwayage.com

cars, especially for tank cars, on the heels of increases in steel costs and some momentum (real or otherwise) remain high. The new railcar delivery backlog sits at a robust 73,000 cars (vs. a 1Q2018 low of 53,000) with nearly half of that backlog representing tank cars (easily the biggest star in the railcar galaxy). Rumor on the street is that the order backlog extends into 2Q2020 for certain types of tank cars.

As owners, end users and operators navigate their way through a challenging lease market, many of these same parties have been dealing with a changing landscape of how the DOT and the AAR are approaching ongoing responsibilities of tank car maintenance. DOT/AAR is also changing the focus of their regulatory oversight over certain portions of the supply chain of railcar component parts (both new and replacement) vs. today’s standards.

On Oct. 24, 2018, the AAR issued Casualty Prevention Circular (CPC) 1338, which revises certain definitions and shop certification requirements contained within the AAR Manual of Standards and Recommended

Practices, Section C, Part III, Specifications for Tank Cars. The proposed changes will significantly increase the number of facilities that require shop certification, including facilities that manufacture or maintain packaging components, and their certification requirements. The changes required under CPC-1338 come into effect Jan. 1, 2020. Our analysis, as follows: • CPC-1338 places restrictions on the types of subcontracted components, limits competition and increases operating costs without a clearly articulated safety benefit. As written, manufacturers of a tank car may only subcontract the fabrication of the tank shell, heads, nozzles and sump to their own design. There is no allowance for subcontracting for any other component.

• CPC-1338 imposes requirements on parties involved in the manufacture of packaging components to go through a rigorous AAR certification program to be able to continue to supply components to the rail industry. Earlier standards required the tank car manufacturer/ June 2019 // Railway Age 19

Railway Age Magazine FP/4C Bleed: 8.125” x 11.125” Trim: 8” x 10.875”

Equipment leasing

repair shop to verify the quality of the component prior to application to the tank car. The problem with the AAR certification process is that it imposes added quality requirements on manufacturers of components that are often different from their current quality programs (e.g., ISO-9001). Further, evidence suggests that the current AAR certification process may take more than 12 months to complete, with some companies experiencing longer delays (and sometimes accompanied by lost business).

• CPC-1338 now requires AAR approval to change one manufacturer’s valve or fitting on a tank car with another manufacturer’s valve or fitting on a tank car having the same form, fit and function (i.e., equivalent kind, for example, a change of a 1-inch ball valve from one

manufacturer to another). The earlier standards recognized that “equivalent kind” was not an “identical kind,” and therefore, such changes only required simple documentation of the change (i.e., documented in the industry’s Tank Car Integrated Database). The new standard requires AAR approval of the change, which can lead to significant delays in processing, and prevents usage of the car until the owner obtains approval.

• CPC-1338 will require certification of shipping locations that perform minor repairs to tank cars, such as fixing a broken chain or replacing a worn pipe plug. This will have a major impact on the shipping community, since repairs once made by plant operating personnel will now require the use of a certified mobile repair unit, moving the tank car to a shop or having

the shipping location apply for and obtain an AAR shop certification.

What is the goal of this AAR standard?

On the surface, the goal is to support safer transport of hazardous materials by rail and to avoid non-accidental releases of product.

Below the surface, there can be many motivations: federal pressure, provincialism, concerns about potential failures.

As noted on many occasions in “Financial Edge” columns, the history of the rail equipment industry as a self-policing progressive group has been a positive one.

The AAR and its committees (Tank Car Committee, for example) that make policy and procedure recommendations on these issues are comprised of member companies and trade organizations that support them. These companies and associations are targets of product liability claims when an accident or incident occurs and in particular if there is a release of product.

It is in everyone’s best interest to keep tank cars safely on the tracks—and when an accident occurs to ensure for the crashworthiness of the tank.

I reached out to Railway Supply Institute President Michael O’Malley and Greenbrier Vice President, Regulatory Services James Rader to talk about CPC-1338 and to get their points of view on the issues and on what RSI is doing to help its member companies address their concerns.

As a table setter, one big concern about CPC-1338 is the limitations on subcontracting and how those limitations impact the manufacture of packaging components. Under the federal regulations, the packaging manufacturer (i.e., tank builder) certifies that the completed tank

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(including its valves, fittings, closures and safety systems) complies with the regulations. CPC-1338 pushes the certification down the supply chain and in some cases to sub-suppliers (e.g., casting manufacturers that supply castings to manway cover manufacturers). By pushing additional requirements down the supply chain, CPC-1338 will increase the cost of production, reduce the flexibility to seek out new or additional suppliers, and

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will limit competition as traditional suppliers exit the market.

Specifically, the issues addressed by CPC-1338 are very relevant for cars built before 2014, when the rail industry began to move to the most up-to-date version of the crude-by-rail tank car, the DOT 117J design. Data from railcar shops indicates that as more tank cars are built (and that number has been increasing since 2011) more are shopped. The shop network is constrained as only tank car-certified shops are legally able to work on those cars.

The shop network is further stressed by the high turnover of the repair shop labor force. The market for tank car-specific components is similarly stressed by inventory concerns and with keeping up on the demand necessitated by all of the repairs being made to existing tank cars and with high-volume new production. Additionally, the increasing number of cars being retrofitted (in April 2019, almost 1,000 cars were retrofit to 117R status) adds more complexity to the situation.

In the midst of all of this, CPC-1338 comes into the picture. In speaking with O’Malley and Rader, it is clear from their perspective that the highest priority is the manner in which the rule limits the number of companies able to provide packaging components for replacement and for new manufacturing. In their analysis, the cost for a company getting certified to provide parts under the guidelines proposed by CPC-1338 will cost the packaging component supply chain more than $20.9 million over a 20-year period. Based on a survey of packaging component suppliers commissioned by RSI and completed by GRA & Associates, two-thirds of the current base of suppliers will either exit the market or consider exiting the market because of this new rule. Railcar parts are a small business segment for many manufacturers; the additional investment to be certified may never be recouped. Imagine if, in the next year or two, half of the component supply groups for tank car parts exit the supply base.

How did the DOT/AAR come to this conclusion? The DOT/AAR reviews the number of derailments and the likelihood or existence of conditional release of product from any derailment. Most large releases of product are from tank car punctures (car design and tank thickness) not componentry. In reviewing DOT’s product release data, there is no quantifiable data to suggest that additional AAR component supply chain requirements will improve safety. In fact, there is little, if any, incident data to support that poorly designed packaging components are a cause of concern.

RSI has proposed an alternative to the AAR standard. This recommendation, called RSI 100, “Product Quality Certification,” would authorize AAR-certified tank car manufacturers and repair shops to approve the part design and manufacturing processes of the third-party vendors providing those component parts. This would streamline the approval process, allow for a more cost-effective and efficient supply chain, standardize oversight and enhance component quality.

The goal of RSI 100 is to acknowledge the DOT/AAR agenda but with improved efficiency. RSI 100 would allow for faster and more cost-effective implementation. Regulation that may congest the system, limit competition and bring activity to a standstill is detrimental to the industry.

While RSI says it’s making progress with DOT/AAR on RSI 100, the problem has potential to become critical. There could be as railwayage.com

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many as 150 companies seeking certification. RSI and a group of lessors and manufactures see a critical need for resolution before the Jan. 1, 2020, AAR implementation date. Without resolution, suppliers

asked to absorb the costs may decide to exit the component business altogether.

When asked about the other parts of CPC-1338, concerns about repair shop certification and the approval process for

tank car repairs, O’Malley said RSI was advancing RSI 100 as a positive first step.

The data on repair shops and the turn times in shops making tank car repairs is on an uphill climb. The tank car build cycle is leading to a period of time in the next few years where, with the number of tank cars needing scheduled maintenance and the 2023 equipment changeout for tank cars in ethanol service, shop capacity will likely be at a premium. This is combined with the already existent stress on the shop network for cleaning, retrofits, relining and repainting.

On the expanding scope of the AAR repair approval process, O’Malley and Rader noted that a federal change on this front, if not done in the manner associated with RSI 100 (a pre-emptive), would require a cost-benefit analysis to evaluate the potential alternatives and their benefits and improvements. The cost-benefit analysis is the standard procedure on federal policy matters. It was used, for example, in development of the FAST Act of 2015 and

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equipment leasing had implications on the decision to eliminate the ECP brake requirement from the original FAST Act requirement.

It is important for RSI 100 to demonstrate the DOT/AAR’s ability to work collaboratively with industry resources to improve policies and procedures that are working to make the industry safer. On matters relating to safety and car design, the industry track record has been collective, responsible and forward-thinking. DOT/AAR should work with the companies involved in the process to enhance and improve the process for repair and improvement.

Around the Market As noted in the opening, the railcar market is frustrating and confusing, and remains weaker than investors would like it to be.

Many were hopeful that 2019 would be a year of the turnaround, but halfway through, the turnaround in many car types continues to be out of reach. There are too many cars, too little demand and too many players chasing the same opportunities. PSR continues to

affect car supply negatively, at least for now.

It’s a pretty tough environment for railcar owners. Here’s a brief summary of what is happening in a variety of freight car types: Coal Cars: Even though coal loadings are down 4.3% year-to-date, the coal car market seems to have found a semblance of stability. Some rates have begun to creep up, and newer cars (those built post-2004) are becoming slightly harder to find. Car owners should not count on continued improvement, as the demand cycle for coal is not trending upward. Net rates continue to trend in the low $100s on gondolas and rapid discharge hoppers, while full-service rates move around, depending on service and utilization. Freight continues to be an issue for cars in storage.

Sand Covered Hoppers: Owners must feel like abandoned souls waiting to be ferried to their final resting place across the River Styx.

The impact of growth in more local (and lower cost) brown sand combined with the overbuilding in this segment has put these rates to the mat for the foreseeable future.

Sand companies are again restructuring debt and looking to decrease expenses. Luckily, the industry seems to have stopped building more cars. If owners can find a lease opportunity, the rates are low, near $200 net and squarely below $300 FS (full service).

For cars in place (renewals), rates might be higher. This is a lessee-favorable market right now. Long on this asset class? Hold on—it’s going to be a bumpy ride.

Tank Cars: These shine as the brightest light in a dim galaxy. With the order book for tanks into 2020, inventory is key, and cars seem to be renewing into rate strength for the car owner. Having said that, new tank railcars continue to be leased at rates that are sub-optimal vs. their purchase prices. The order book seems to be slowing, and the Alberta (Canada) provincial government has sworn it would exit the previous administration’s crude oil car deal. There is a sense of weakness here.

Refined products into Mexico may be the only continued strong growth segment.

However, the U.S. Class I’s continue to push

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Equipment leasing against using 117R cars (or maybe they’re not, as it changes day to day and customer to customer), and that sows some uncertainty in the market for DOT 111A cars, whether they were built to the CPC-1232 standard or not. Rates range from the high $700s FS for smaller-capacity 23,000- and 25,000-gallon cars, 117J design) to the low $1,100s for crude oil tanks (ready to go right now). Pressure cars are a bit tighter, with rates closer to (or slightly above) $1,000 per car per month, FS. Grain Covered Hoppers: This continues to be a tough market for investors as newer cars coming on the market (possibly through railroad purchase) continue to stress rates on investor-owned equipment. Early rate pickup in smaller-cube cars (4,750cf) was a nice change for investors seeing weakness, but expectations are that this will not continue for the long term. Rates on smaller cars are in the mid $200s FS, and on 5,200cf cars rates are holding in high $200s to $300.

Inventory seems long, so expectations for increasing rates should be tempered.

Mill Gondolas: Steel tariffs did increase mill capacity (operating in the low 80% range), but they haven’t done anything for the scrap industry as June scrap rates are heading down to the $260 per ton for

The railcar market is frustrating, confusing, and weaker than investors would like it to be.

Chicago heavy melt #1. The PSR impact on mill gon lease rates seems to have found its footing. Car rates have come down into the low $400s for 54-foot mill gons, while

66-foot cars continue to sit in the mid $500s (FS for both). Summer is usually weak for scrap rates, so hopes rest for a resurgent fall.

Check back in September for the Railway Age Railroad Financial Desk Book to see what happens. Talk about a cliffhanger!

Coil Cars (Finished Steel): The mill rates have helped stabilize these car types and generate some additional interest in new building.

Rates are in the mid $600s for newer cars, but older cars can be had in the mid $400s per car per month, FS. There’s lots of variety in cover type and condition impacting rates.

Everything Else: A rush in centerbeam flatcars seems to have slowed slightly.

While a 286K GRL riser-less car remains in demand, sub-optimal cars remain sidelined. Boxcars continue to move sideways with small pockets of TTX-generated building. The aggregate car market seems to have cooled slightly without direction from Washington on infrastructure and aggressive rate offerings on new and existing cars.

Rates are in the low $400s.

Profiles follow on p. 28.

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26 Railway Age // June 2019

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Leasing Resource Directory The 2019 Guide to Equipment Leasing (pages 19 through 26) is supported by companies that provide equipment leasing and financial services and products to the rail industry. All of these firms have advertisements elsewhere in this section or have used paid profile space to present their background and capabilities.

TrinityRail®, provides an integrated platform of railcar products and services designed to provide value by optimizing the ownership and usage of railcars.

The TrinityRail lease fleet is composed of more than 122,000 railcars that TrinityRail wholly or partially owns as well as railcars it manages for other companies.

Available are comprehensive railcar leasing options, administrative services, railcar management, procurement, brokerage services, as well as services for institutional investors seeking to invest in railcars.

Also available are extensive manufacturing resources as well as maintenance, aftermarket parts support and on-site field support for operational assistance and training.

Additional information on TrinityRail’s full range of products and services may be found at www.trinityrail.com.

Brian Madison, President, TrinityRail Leasing and Management Services 2525 Stemmons Freeway, Dallas, TX 75207 Phone: 800.631.4420

www.trinityrail.com

28 Railway Age // June 2019

RailSolutions provides a broad variety of railroad equipment-related consulting, technical and advisory services to financial institutions, railroads, shippers and fleet operators with a primary focus on equipment valuation and appraisal services. Additional areas of expertise include railcar and locomotive inspections, equipment repair and overhaul cost analysis, and portfolio valuations.

RailSolutions draws on over 40 years of railroad industry experience in developing multiple quantitative valuation models supported by both a sound base of market data and advanced analytical techniques.

Rob Blankemeyer - President 2593 Wexford-Bayne Road, Suite 205 Sewickley, PA 15143 724-766-6699

rblankemeyer@railsolutionsinc.com Investors’ Guide Inquiries: info@railsolutionsinc.com

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CIT’s rail division offers a full suite of railcar leasing and equipment financing solutions to rail shippers and carriers across North America. We leverage our extensive experience and one of the youngest, most diversified railcar and locomotive fleets in the industry to empower customers to succeed and prosper. Our solutions can help free up capital for your growth priorities, increase efficiencies and reduce out-of-service time. Contact us to learn how our transportation solutions may empower your business.

Visit cit.com/rail or call 312-906-5701

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equipment leasing guide

VTG Rail, Inc. and VTG North America, Inc With more than 30 years of experience in the rail and finance industries, Progress Rail serves as a full-service professional leasing firm, specializing in leasing railroad maintenance equipment. We finance and refinance Maintenance-of-Way equipment, intermodal equipment, locomotives, railcars, and other rail-oriented equipment. Our experts’ dedication and uncompromising focus on quality sets us apart from the competition. Progress Rail develops leasing programs to cut equipment costs and provides leasing structures that are tailored to meet the rail industry’s specific and everchanging needs. In addition, we offer finance and operating leases, sales/leaseback programs, and short and long-term rentals.

Progress Rail, A Caterpillar Company Equipment Leasing Division 15173 North Road, Fenton, MI 48430 (810) 714-4626 Voice • (810) 714-4680 Fax

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are the US subsidiaries of VTG AG, one of Europe’s leading rail car leasing and rail freight logistics companies with a fleet consisting of more than 94,000 railcars worldwide.

VTG Rail offers a full range of railcar leasing and fleet management services, providing a broad range of tank and general freight cars under a variety of lease structures. We are an experienced team committed to maximizing productive use of rail assets, enabling our customers to focus on their core business.

Call (618)343-0600 email sales.northamerica@vtg.com

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The David J. Joseph Company The David J. Joseph Company’s Rail Group provides a broad range of transportation services throughout North America: single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchases and sales of portfolios, and private fleet management.

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

The David J. Joseph Company Rail Equipment Group 300 Pike Street • Cincinnati, OH 45202 Tel.: 513-419-6200 • Fax: 513-419-6221 Contact: info@djj.com

www.djj.com

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SMBC Rail Services LLC is committed to providing innovative rail car leasing products and services to North America’s vital rail industry.

Let one of our experienced professionals show you how.

Visit us at our website: www.SMBCrail.com, or email us at sales@smbcrail.com.

Gene Henneberry, President and CEO SMBC Rail Services LLC 300 S. Riverside Plaza, Suite 1925 Chicago, IL 60606

When evaluating your railcar needs, you need a partner with industry experience, deep asset knowledge, and the strength to offer competitive and flexible terms.

From flat cars to covered hoppers and beyond, the Rail Finance team at PNC Equipment Finance offers the inventory of assets to meet your needs combined with the industry-leading financial expertise to maximize ROI. Whether you need Full Service Lease options, including maintenance or a simple net lease, short term or long term, we bring comprehensive railcar solutions for the miles ahead.

Rail Finance Team Ken Roseberry, SVP 513-455-9617, ken.roseberry@pnc.com Sales & Marketing Christopher Bell 513-455-9620 / christopher.bell@pnc.com Robert Hogan 513-455-9056 / robert.hogan@pnc.com James Weaver 251-654-2166 / james.weaver@pnc.com

www.pnc.com

Katandin Railcar Services (KRS) is the rail industry’s newest certified tank and railcar repair, cleaning, testing and heavy repair shop located in Milo, Maine.

We are the only M-1002/1003 certified tank car shop in New England that can handle all your tank car repair needs, with 20 working car spots under roof, as well as provide short and long-term storage. Our tank car cleaning system is a state-of-the-art, automated, hi-pressure water jet system. We have a flare and steam system that allows us to work on commodities in accordance with our Maine DEP issued Air License. This facility is serviced by CMQ Railway every day with direct interchanges with CP, CN, PAS, MNR, NBSR, VTR, and SLQ. KRS also offers mobile car repair in Maine.

Chad Mowery, 207.631.4348, chad.mowery@cmqrailway.com Shelby Weston, Customer Service, 207.943.4086, customerservice@ krs-cleaning.com

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June 2019 // Railway Age 29

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Track Geometry

Preventive to Predictive to Prescriptive

The evolution in track geometry technology.

A

By David C. Lester, Contributing Editor

s railroaders know, establishing and maintaining proper track geometry requires frequent attention to maintain safe and fluid operation. Despite best efforts, derailments will occasionally occur due to geometry exceptions, prompting track engineers to look for more effective methods of correcting issues before they become problems. (See “Strategic Initiatives to Reduce Derailments in a Changing Operating Environment,” by Gary Wolf, Railway Track & railwayage.com

Structures, June 2019, pp. 14-21.)

The evolution of technology for evaluating track geometry has occurred at lightning speed over the past several years.

Plasser American describes this evolution as a series of transitions: from manned to autonomous geometry measurement; from data measurement to information to knowledge; and from preventive to predictive to prescriptive maintenance.

Most readers are likely familiar with the term Big Data, which is a bit of a buzzword introduced a decade ago that refers to the

hardware, communication and software capabilities to handle tremendous amounts of data and enable planners across many industries to work more effectively. One of the benefits to railroading has been the move from preventive to prescriptive track maintenance. Plasser points out that assets have traditionally been used until they fail, but the “run to failure” approach is costly because it is reactive, and resources are not allocated and activities not scheduled until failure occurs. Preventive maintenance, on the other hand, is more cost-effective and June 2019 // Railway Age 31

Track Geometry

extends the service life of the asset, but because of the tremendous amount of data that must be evaluated manually (and, time constraints prevent the review of much of it), this carries the risk of replacement of assets while substantial service life remains.

During the past 10 years, numerous software applications have been developed to enable Big Data analytics to evaluate information from different sources and provide recommended courses of action, known as prescriptive maintenance. These software applications allow statistical data analysis, image processing, model-based

simulation, deep learning and rule-based activity selection and scheduling to review data automatically, identify issues and estimate time-to-failure, and issue work orders that can be reviewed by an expert. This overall process, including the individual components, is also known as artificial intelligence (AI).

While leveraging Big Data analytics has been the key development in evaluating track geometry over the past several years, there are several, less complicated developments that have also raised the bar for those involved in this arena. For example, most

are familiar with Holland Rail Engineering’s hi-rail TrackSTARŽ vehicles that include a Gauge Restraint Management System (GRMS), which measures track strength under dynamic loadings. The system takes an unloaded measurement at the front of the vehicle, and a loaded measurement taken at the split loading axle, which delivers a vertical and lateral load that locates the weakest track locations.

Holland recently developed a smaller version of its hi-rail geometry vehicle, the 850-series (400-series pictured, opposite). This TrackSTARÂŽ vehicle features a

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Track Geometry

loaded-gauge, split-axle system that applies a consistent 2,500-pound lateral load to the track to look for gauge-widening and broken spikes. This vehicle is designed to supplement testing done by rail-bound track geometry cars, and a key benefit is that one operator can complete the measurement. This vehicle also includes Holland’s patented Argus® system, which measures and calculates geometry parameters and generates exceptions in real time. One Class I research and test engineer said that he had been waiting for 10 years for a hi-rail vehicle like this, and that he determined the gauge measurements on curves

made by the Holland truck were identical to those made by the road’s large geometry car.

A historic problem for analyzing track geometry has been getting track time to deploy rail geometry cars and hi-rail vehicles. Since it’s difficult to hold traffic on a busy main line to make way for geometry evaluation, the industry is increasingly using crewless, autonomous geometry vehicles that can be part of regular freight train consists. Several Class I’s are using Ensco’s Autonomous Track Geometry and Rail Profile Management System, built into a modified boxcar.

Ensco’s autonomous boxcar operates in regular freight trains, evaluates track and provides exception editing. Geometry parameters assessed by the car include gauge, cross-level, warp, twist, surface, alignment and rail wear. The car has concrete ballast, and solar energy, batteries and fuel cells power the onboard equipment. A beam from the bottom of the car provides data on track conditions, which is communicated wirelessly to headquarters in real time. Nearly all of the Class I’s have deployed this type of car, which is managed by the railroads’ geometry departments.

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June 2019 // Railway Age 33

Track Geometry The number of defects found and corrected on the national rail network has increased significantly, as much more track evaluation occurs at any given time.

Autonomous cars are supplementing the work of crewed geometry cars. The traditional geometry car is usually a train that includes a locomotive, an equipment car to gather the track data, and a coach car with computers, printers and viewing screens so engineers can monitor track conditions as the train travels along its route. Crewed geometry cars can also be single, selfpowered rail-bound cars, but while these are common in Europe, they are rarely, if ever, used in North America.

BNSF Assistant Vice President and Chief Engineer for System Maintenance and Planning Matt Hammond says, “BNSF leverages both [crewed] and crewless geometry cars to supplement visual inspections on our network. We currently have three crewed and two [crewless] geometry cars, and we expect to expand our use of autonomous geometry cars by exploring emerging technology to

Track geometry hardware and software have made significant strides in the past five years. augment optical inspections.” Hammond adds that “BNSF has both hi-rail and railbound vehicles for track geometry testing.

We generally use rail-bound cars for inspection on the main line and supplement them with geometry hi-rail trucks. Hi-rail geometry trucks are primarily used to inspect our yards, industry tracks and crossovers.”

During the past five years, software and hardware for track geometry evaluation have made significant strides. “BNSF has

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developed predictive tags and alerts based on the data collected from geometry cars,” notes Hammond. “Once that data is sent back to our geometry team, it leverages artificial intelligence to effectively analyze the hundreds of millions of bytes of information that help drive our track maintenance. A tagging system, for example, is used to identify track conditions.

A yellow tag is a ‘warning.’ Now, with AI data, we can predict which of the yellow tags have the highest probability of turning into red tags—track needing immediate attention— within the next 30 days. Today, we classify them as orange tags, elevating the need for maintenance before the track is taken out of service.”

BNSF is also a proponent of what’s called “performance-based geometry testing.”

This testing captures scenarios that involve multiple factors in track geometry that could lead to a derailment in a particular situation. This level of testing is in addition to the Federal Railroad Administration (FRA)-mandated evaluation. Says Hammond: “BNSF applies a wide variety of technologies to test for FRA-regulated defects. We also test for additional defects to enhance the safety of the railroad and leverage both [crewed] and [crewless] geometry cars to measure the performance of the track under operating conditions. Geometry cars allow us to precisely measure the health of the track while under load and at train speed. By adding geometry car inspections, BNSF can enhance inspection efforts on areas where there may be conditionbased concerns as a result of heavy loads while also performing federally mandated calendar-based inspections.”

Maintaining proper track geometry will always be important to safe railroading. The innovations in just the past five years have been phenomenal. It’s worth noting that machine vision systems are becoming much more common on geometry cars, both the larger and smaller ones. Who knows what existing technology, including technology yet to be developed, will offer those charged with track safety and efficiency in the next five to ten years? Advances in Big Data analytics will increase the industry’s ability to establish prescriptive maintenance programs, but, for the time being, at least, human verification and approval of the prescriptive information will be required. railwayage.com

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ANALYTICS Health

Rolling

Asset Health

Combining Big Data analytics with remote monitoring.

All photos: Railinc

A

By Chip Summey, Director, Asset Services, Railinc CORP.

dvancing safe and efficient rail operations continues to be a primary focus of North American freight railroad operations. What is particularly exciting right now is that the data available to railroads, both in its detail and volume, enables them to manage their operations in ways that were not possible before.

Monitoring and maintaining the health of the industry’s rolling assets is a key enabler of this progress, which is why railroads continue to invest in an array of devices and processes. These include condition-based detection systems, data warehouse and Big Data systems that support data mining and advanced analytics—all railwayage.com

to support the health of the freight car fleet.

Today, the industry has proactive, condition-based monitoring that helps maintain a safe and efficient rail network. With more sophisticated wayside detection systems, tracking of critical railcar components, better operating practices and advanced analytics, railroads are recognizing potential mechanical issues earlier than ever.

These systems generate data available in detail and quantities that were unimaginable just 10 years ago. The railroads are leveraging this data to identify potential mechanical problems earlier and take proactive measures that prevent those problems from causing track damage or train delays.

Plus, the railroads’ continued investment

in detection systems, the ongoing development of new detector types, improvements in the quality of field inspections and new analytics has made it possible to identify potential railcar problems sooner and before interruption in service occurs. With more than 1.5 million cars in service today, these improvements decrease costs and make the rail network more reliable.

One of the primary drivers for the increase in data and the ability to use it is the efforts railroads have made to share data with each other, and the car owner and car repair community. An example is the cooperative, industry-wide program coordinated through the Association of American Railroads (AAR) known as the Asset Health Strategic Initiative (AHSI).

June 2019 // Railway Age 37

Analytics Advanced railroad detection systems using image, laser, acoustics and impact sensors are identifying potential problems with components such as wheels, axles, bearings and brakes.

Launched in 2012, AHSI encompasses the entire rolling stock health cycle, which incorporates prevention, detection, planning, movement, repair and interline settlement. The AAR, Railinc and Transportation Technology Center Inc. (TTCI) are helping advance this program with the railroads.

The goals of AHSI are: • E nable industry-wide improvements in safety, velocity and capacity.

• Enable more-reliable service through more-effective asset health management.

• Optimize capital investment in track, yards and equipment

required to handle increased rail volume.

• S upport safe and cost-effective operations.

Through this program, advanced railroad detection systems using image, laser, acoustics and impact sensors are identifying potential problems with components such as wheels, axles, bearings and brakes. Advanced analytical programs flag suspect cars that can be removed from service and fixed before issues arise. This program is helping the industry improve on a record of safety and efficiency that is already at historically high levels.

Each railroad closely monitors and acts on flags that come from automatic and manual detection systems on their lines. Collectively,

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ANALYTICS they send this data to Railinc’s Asset Information Repository (AIR), an aggregated North American database that provides continuous visibility into the health status of freight cars and locomotives.

This comprehensive view enables faster identification and resolution of cars that are developing mechanical defects. As an example, when a freight train goes into emergency brake mode and the train crew is unable to identify a specific car or cars that could have caused the brake application, that event is sent into AIR. The event is stored with other similar events across the industry and tracked over time.

The cars in such a train can move across North America, interchanging among railroads, resulting in multiple event reports to the Asset Health Mechanical AIR system. The Asset Health Mechanical algorithms in the system can identify specific cars involved in these events on multiple railroads. Railinc, with its view of unintended emergency brake applications across North America, flags those cars, isolating a specific car or cars that become suspect. Once identified, Railinc notifies the industry so that qualified mechanical shops can inspect the equipment. Cars that are repaired and returned to service will increase velocity by eliminating future issues.

This is just one example of how the use and development of analytical programs has been part of a broader strategic focus at the network level to support equipment health. AHSI was made possible by the investment of Class I railroads and their commitment to work together to further safety and efficiency to make a better freight rail network.

There are many other systems utilized by the North American rail industry that help advance safe and efficient rail operations, including: •T he UMLER® equipment database provides the foundation for AHSI equipment information. This foundational system is the industry’s central electronic resource for critical equipment characteristic data. It is used by railroads, equipment owners, shippers, ports, suppliers, industry consultants, government agencies and car maintenance facilities for the safe and efficient placement, movement, and interchange of cars. The UMLER system provides secure access to equipment management and reporting tools.

• The Equipment Health Management System (EHMS) is an application that communicates the condition of equipment and sends alerts to the responsible parties when repairs are needed. In cooperation with TTCI, EHMS scrubs, stores and distributes data from multiple wayside detectors. These detectors are deployed to identify potential issues to critical components such as wheels, bearings and trucks while the train is in motion; this gives realtime feedback to host roads. Railroads share this information to eliminate potential issues long before any issue can arise.

•T he AAR Component Tracking Program is a multi-phase, multi-year initiative to create an industry process and related technology tools for capturing railcar equipment component data. Providing rail industry participants with visibility into component health and performance, it tracks individual components as they are applied to specific cars. More component types are being steadily brought into the program like side frames, bolsters and couplers; brake valves; and slack adjusters. railwayage.com

The AAR Equipment Health Monitoring Committee and other industry committees guide this effort.

• Damaged and Defective Car Tracking (DDCT) enables users to update, retrieve and share information on cars moving to shops.

It is an industry collaboration for incident reporting, management of equipment disposition and repair reporting. DDCT puts reliable data at the disposal of car owners, rail carriers and repair shops, helping them make better and faster decisions about equipment requiring attention.

The AAR, Railinc and TTCI, through AHSI, support the industry’s commitment to continuous improvement, and it has yielded significant results. AHSI was built on existing systems including UMLER, EHMS, Component Tracking and DDCT, along with an increasingly sophisticated array of detectors, to enable a new level of data analytics that supports safe and efficient movement of goods that are critical to the North American economy.

Freight rail safety is strong, and getting stronger. Railroad investment to modernize and improve America’s freight rail network has significantly contributed to freight rail’s strong safety record. In fact, there is a direct correlation between the increase in rail network investments and enhanced safety performance. With record levels of private spending on capital improvements and maintenance over the past five years and more than $25 billion annually on average, America’s privately owned freight railroads are at the forefront of advancing safety.

June 2019 // Railway Age 39

Analytics 1.5 million cars, 600 railroads, one industry focus

L

ess than a decade ago, things looked quite different in the world of freight car management.

A growing rail industry understood that its future success was tied to better management of the burgeoning data stream, and that rapid advances would be required in how data was gathered and processed.

Today, the industry is experiencing the benefits of that vision as it conducts op-

2018 rail safety data continues to show that recent years have been the safest on record. According to recent Federal Railroad Administration data, based on permillion train-miles, since 2009 the train accident rate is down 10%, the equipmentcaused accident rate is down 11%, the track-caused accident rate is down 26%, the derailment rate is down 9% and the hazmat accident rate is down 48%.

erations on nearly 600 North American railroads with some 1.5 million cars.

A cross-functional task force of senior representatives from throughout the railroad industry developed a strategy for a multi-year program to address rail network challenges related to asset health. In 2015, the Asset Health Strategy Committee was created by bringing that task force together with partici-

North America’s railroads never stop looking for ways to improve operations.

As technology moves forward, so will the freight railroads. It is an exciting time to work on technology projects in the industry, and we see more excitement to come as more intelligent devices and analytics are applied to the data produced.

Chip Summey joined Railinc as a Senior Business Analyst in 2008. In 2012, he was

pants from each Class I railroad, Amtrak, private car owners, the Association of American Railroads, TTCI and Railinc.

Today, the Asset Health Strategy Committee continues its work to apply information technology solutions and processes to address asset health challenges.

This industry-wide focus on continual advancement of safety and efficiency supports a strong railroad network.

appointed a Product Manager, and in 2015 assumed his present post as Director, Asset Services. Prior to Railinc, Summey was a Project Manager at Dallas Area Rapid Transit (DART), and an IT Analyst at Hillsborough Area Regional Transit Authority (HART), Tampa/St. Petersburg.

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We’re current, are you? FRA Regulations Mechanical Department Regulations

FRA News:

A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound.

Part Title 210 Railroad Noise Emission Compliance Regulations Updated 4-15-19.

215 Freight Car Safety Standards Updated 11-27-18.

216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment Updated 11-27-18.

217 Railroad Operating Rules Updated 11-27-18.

218 Railroad Operating Practices - Blue Flag Rule Updated 11-27-18.

221 Rear End Marking Device-passenger, commuter/freight trains Updated 11-27-18.

223 Safety Glazing Standards Updated 11-27-18.

225 Railroad Accidents/Incidents Updated 11-27-18.

229 Locomotive Safety Standards Updated 1-22-19.

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TOD ONTARIO

CANADA

p3s key for TOD

By James Purkis and Tom Kyle, Stantec

The Blatchford redevelopment on the site of a 217-hectare urban airport in Edmonton, Alberta is one of the largest sustainable developments in the world. The carbon-neutral, transit-oriented P3 development will be home to 30,000 future residents and connect to the city’s LRT system.

Stantec

Toronto’s unprecedented growth has spurred conversations on new ways to approach Transit-Oriented Development, with lessons for both Canada and the U.S.

T railwayage.com

he two previous articles in our series on TOD (Transit-Oriented Development, Railway Age, March 2019, p. 42; and April 2019, p. 25),

looked at how New York got TOD right and how California is doing something different in TOD. Toronto has a history of trying to do the right thing in building transit-adjacent communities, but

sustained growth has put the city at a crossroads when it comes to development and transit planning.

In March 2013, Toronto got a big ego boost. The city had surpassed Chicago to June 2019 // Railway Age 43

TOD ONTARIO

44 Railway Age // June 2019

for the region. This is welcome news for the city’s 2.7 million daily transit riders and commuters within the GTA. But in a city on a path for serious growth, nothing will feel different until much-needed transit and housing are built.

Toronto does have a history of highdensity development in areas of transit, an earlier iteration of what is now labelled TOD. Looking at the city, dense pockets can be observed at arterial junctions along the original Yonge subway line from Eglinton Avenue to downtown. This was done quite intentionally, with zoning for increased density near that transit line.

While many North American downtowns are served by several highways, Toronto has only two—the Gardiner Expressway and the Don Valley Parkway. Personal automobiles are limited to two or three lanes of traffic each way to reach the downtown core, with transit serving most commuters.

That means the Toronto Transit Commission (TTC) and regional rail (GO Transit) need to do much of the serious heavy lifting

when it comes to moving people—and ridership is on the rise.

TOD as a tool to address growth Ask anyone in Toronto about the biggest challenge facing the city, and you’re likely to hear one of two answers: housing and transportation. The city needs more housing of all kinds to support its growing workforce and temper ballooning real estate prices that have nearly doubled on average in the past 10 years. Capacity needs to be added to existing transit lines to meet increased ridership, and new lines are needed to make the connection across the GTA. Making those connections continues to encourage TOD, and Metrolinx, the regional transit planning agency, has actively engaged stakeholders to overlay the regional rail network onto city transit and other regional transit agency services.

Metrolinx has been working for several years to enhance GO services to create an all-day, 15-minute-headway, two-way railwayage.com

William C. Vantuono

be the fourth-largest city in North America by population, after Mexico City, New York and Los Angeles. At least that’s when local media seized on estimated census data to set the city abuzz.

While estimates and rankings only tell one part of a city’s story, one fact is clear: Toronto has been growing quickly. The Greater Toronto Area (GTA) is now home to more than 6.5 million people, according to 2016 data. Growth in the area has led to skyrocketing real estate prices in both the downtown and the suburbs, and put a strain on the city’s transit system.

Toronto has four subway lines with 75 stations and 7 regional rail lines with 67 stations, and is well-positioned to surpass Chicago, its Great Lakes counterpart (with eight lines and 145 stations), as it enters the next stage of development.

The GTA is investing in an additional 22 new stations and further LRT and GO Transit Expansion developments. The new Ontarion provincial government recently announced a C$28.5 billion transit plan

TOD ONTARIO commuter system with additional suburban communities with the potential services at peak times on many parts for densification and connection to a larger of its network. The agency has worked network. Giving up a life beholden to the closely with the city to deliver a plan automobile is not just something for downcalled SmartTrack (an election platform of Mayor John Tory), which will improve and adapt commuter rail corridors for urban transit use. This will help create new opportunities for TOD and new connections that didn’t exist before, with more intersections, and more access to other rail lines and to the larger network.

Couple that with Toronto’s young educated workforce interested in communities with alternative modes of transit, and there is an enormous potential for TOD developments. With good planning, new developments can tap into the millennial desire for vibrant communities and alternative modes of transit, becoming localized multimodal hubs highly attractive for busi- town dwellers. Residents in well-connected outlying neighborhoods and cities of the ness and retail investment.

On the developer side, there is increased GTA could, in the future, get where they interest in meeting this market, not only in need to go without a private car. This idea is also gaining traction the downtown core, but in outer urban and1 8/17/16 1_2pgHorzWrkStTraining2016.qxp_Layout 3:25 PM Pagein 1 other Ontario cities

Giving up an automobile-beholden lifestyle is not just for people in Toronto’s downtown core.

with their own transit expansion plans, such as London, Waterloo and Ottawa.

TOD has been considered as a solution for many years, but the difference now is that it’s seen as a win-win solution for both the public and private sector. This is accelerating discussions, proposals and ideas to improve future urban communities.

Actively looking at a new approach to TOD When it comes to involving the private sector in capital projects, Canada has a more mature process than the United States. Governments across the country have a good track record of engaging public private partnerships (P3s) for large-scale, single-use projects such as roads, hospitals and schools. Now that the industry has seen the potential of P3s, it’s looking at ways to partner on transit projects.

This is manifesting itself within the TOD market, where developers are more comfortable with the idea of building on public land, and with approaching government

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June 2019 // Railway Age 45

TOD ONTARIO agencies with ideas for development. Transit corridor studies are something developers watch carefully, and government agencies have been increasingly willing to listen to their proposals.

These conversations being led by the private sector represent a more-integrated, cooperative approach that has the potential to allow for improvements in communities, to the mutual benefit of more parties than ever before.

Those benefits include offsetting capital investment costs while creating better communities and increasing transit ridership. Metrolinx and TTC leadership have put TOD high on the agenda to align land use planning more effectively than has been done previously.

The idea of pioneering new forms of TOD agreements is gaining momentum in Ontario. Another government agency, Infrastructure Ontario, has a mandate to support project management and to get infrastructure built. The agency also has extensive P3 experience and can assist with

these project frameworks.

Many U.S. jurisdictions are still developing an approach to private investment and use of P3s, but strides are being made in this direction. Some U.S. agencies are actively

Private-sectorled efforts represent a more-integrated, cooperative approach to TOD. watching what is happening in Ontario, with open lines of communication with their counterparts north of the border.

The P3 experience in Canada may not be as extensive as in Europe, but it provides an

interesting case study for American jurisdictions—and one that’s closer to home geographically, politically and culturally.

There is still plenty to learn on both sides of the border as our cities grow and our transportation systems change with increased transit investment and the adoption of new mobility options.

In the end, increased collaboration and greater integration of public and private investment will result in the progressive development of more connected communities with better design for people to live, work and play.

James Purkis is Stantec’s Rail and Transit Leader. He has more than 30 years’ experience across the globe in transit and transportation systems. Tom Kyle is a Principal in Stantec’s Toronto office, and a trained architect with a focus on transit, civic and education facilities. Founded in Canada in 1954, Stantec is a global design and engineering firm specializing in buildings, interiors, power, environmental, water and many other disciplines.

See www.stantec.com.

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

RAIL GROUP From RAILWAY AGE, Railway Age,RT&S RT&S and and IRJ IRJ NEWS http://bit.ly/rail_news ROUND-UP of NEWS STORIES FROM:

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46 Railway Age // June 2019

3/4/19 1:04 PM

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People / 100 years / Events Farrukh A. Bezar CSX

High profile: CSX has appointed Farrukh A. Bezar as Senior Vice President and Chief Strategy Officer. He will lead the development of strategic initiatives that support CSX’s “intensified focus on growth,” the company said. Bezar reports to CSX President and CEO Jim Foote. He joins CSX with more than 25 years of experience in transportation and logistics. He most recently served as founder and managing partner of Lynwood Partners. Prior to Lynwood, Bezar served in senior roles within the transportation and logistics functions at Clarendon, Booz Allen Hamilton and A.T. Kearney. He also held sales and marketing positions at BNSF predecessor ATSF and served as a financial analyst with Chase Manhattan Bank. Bezar received a BA in Economics and Political Science from Northwestern University and an MBA in Management, Marketing and Transportation from the J.L. Kellogg Graduate School of Management at Northwestern University.

C

N appointed Rob Reilly EVP and COO effective July 1, and promoted Michael Foster to EVP and Chief Information and Technology Officer, effective June 3. Prior to his appointment as COO, Reilly, 54, had 30 years of experience in the rail industry. He joined the Atchison, Topeka and Santa Fe Company (currently BNSF) in 1989. A graduate of Washburn University, Reilly completed the Executive Program at Stanford University. His career in the rail industry has taken him across the U.S., most notably in Chicago and the west coast. His leadership experience includes safety, rail operations and field application of rail technologies. The 52-year-old Foster joined CN in March 2018 as SVP and CIO. NJ Transit named Faisal Jameel as Chief Technical Officer. Jameel has more than 20 years of experience in the IT sector.

Most recently, he served as the

digital transformational lead for European pharmaceutical company Sanofi, where he managed an employee base in multiple locations around the world. Prior, he worked at the Institute of Electrical and Electronic Engineers (IEEE) and Astea, a multinational technology company specializing in field service workforce management. Jameel holds a bachelor’s degree in electrical engineering (avionics) and a master’s degree in computer science from the University of South Alabama.

STV, Inc. promoted Brandon Swartley, P.E., to Vice President. Swartley joined STV in 2015 and served as the Transportation and Infrastructures Division’s chief electrical engineer of power systems. He’s a senior IEEE member, chair of the IEEE Philadelphia Chapter Vehicular Technology Society and a member of the Electrical Association of Philadelphia.

100 years ago in railway age June 1919

The Cost of Neglecting Auxiliaries A striking example of the economy of a high standard of equipment maintenance is to be found in the report on the air consumption of locomotive auxiliary devices presented at the recent convention of the Air Brake Association. To one who has not made a special study of the situation, the air used by these devices seems negligible, yet tests under actual working conditions demonstrated that the cost of the fuel required to supply air for their operation ranged from $100-$300 per year per locomotive, depending upon the type of air compressor used.

48 Railway Age // June 2019

JUNE 18-21, 2019

wheel-rail interaction 2019 Hilton New Orleans Riverside Brandon Koening, 847-808-1818; www.wheel-rail-seminars.com

JUNE 23-26, 2019

APTA 2019 Rail Conference Toronto https://www.apta.com/mc/rail/ Pages/default.aspx

JULY 8-11, 2019

AAR 127th Damage Prevention and Freight Claim Conference Omaha https://dpfc.configio.com/ pd/336/2019-aar-damageprevention-and-freight-claimconference

JULY 15-16, 2019

Midwest Association of Rail Shippers 2019 Summer Meeting

Lake Geneva, Wisc. https://www.mwrailshippers.com/ event/2019-summer-meeting/

JULY 23-25, 2019

4th annual icri workshop on rcf and wear Segal Centre, Vancouver, B.C. www.icri-rcf.org/icri-workshop

SEPTEMBER 22-25, 2019

RAILWAY INTERCHANGE 2019, PRESENTED BY RSI, REMSA, RSSI, AREMA, and the CMA. Minneapolis https://railwayinterchange.org. info@railwayinterchange.org. exhibitionsponsorships@ railwayinterchange.org. aremaconferencesponsorships@ railwayinterchange.org.

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Products

Real-Time Video/Graphics Analytics AIoT Platform Global advanced edge computing products provider ADLINK Technology, Inc. has released the fanless NVIDIA Quadro embedded AIoT (AI and IoT) platform, the PIS-5500, designed for realtime video/graphics analytics applications in the passenger rail industry.

Artificial Intelligence (AI) technologies are being adopted globally by all industries to drive efficiency, improve productivity and reduce costs—and the rail industry is no exception. These AI-driven applications only function with proper data input that is collected by massive numbers of Internet of Things (IoT) devices installed in stations, on trains and along tracks. A successful implementation of such rail applications requires a seamless integration of AI and IoT technologies. By leveraging more than 20 years of expertise in developing highly reliable and available embedded computing systems, ADLINK brings advanced AIoT solutions to rail transportation, enabling customers in developing a variety of applications that can deliver true value and performance.

Powered by an Intel® Core™ i7 processor and integrated NVIDIA Quadro GPGPU module, ADLINK’s EN50155-certified PIS5500 AIoT Platform is not only ruggedized for both wayside and onboard deployment with its wide-range DC input and isolated I/O design, but also provides an ideal solution for real-time video/graphic analysis applications that are vital to today’s railwayage.com

increasingly complex railroad operations.

The target applications include but are not limited to passenger information systems, railroad intrusion detection, train station surveillance, onboard video security and railroad hazard detection.

ADLINK’s PIS-5500 is being tested and deployed commercially by leading rail system integrators worldwide. In one application, the intelligent platform is installed on special inspection trains to process captured images of key wayside equipment in real-time. With a sophisticated algorithm driven by parallel computing and deep learning, the application can effectively identify potential equipment faults at a train speed of 75 mph, and raise the alarm to notify maintenance crews. In another application, the PIS-5500 is used in a train station control office to analyze the real-time video stream received from the platform.

The application is able to not only detect suspicious behaviors and trigger alerts, but also conduct post-event analysis.

To meet varying application requirements, the PIS-5500 is also available in variants featuring an additional two USB 2.0 via M12 connectors and two 2.5-inch SATA 6Gb/s drive bays, as well as a version supporting +12VDC power input only.

“As a premier supplier to the rail market, ADLINK is committed to helping customers gain competitive advantages by allowing them to focus their development efforts on differentiating their end applications,” said

Crystal Tseng, ADLINK Senior Product Manager. “We’re leveraging our industryleading expertise in AI, IoT and edge computing to significantly expand our already extensive rail product portfolio with new products based on these disruptive technologies. The addition of the PIS-5500 delivers an advanced AIoT solution that further strengthens our ability to serve our customers with products that provide superior reliability and versatility. For rail transportation, AI brings enormous opportunities to suppliers like us. We believe that AI can transform traditional rail operations by driving improvements, including fast and convenient ticket-free check-in, accurate arrival-time predictions, personalized infotainment and onboard services, real-time track heath diagnostics, and rapid response in an emergency.”

ADLINK offers not only a field-proven, cost-effective and extensive commercial-offthe-shelf (COTS) portfolio enabling both wayside and onboard applications, but also a variety of fast-time-to-market custom solutions with best-in-class ODM capabilities. ADLINK’s long-held support of COTS technology and open standard systems enables flexible platforms that are modular, scalable and rugged enough for extended deployment in both brown- and green-field projects.

Information: https://www.adlinktech. com/Products/RuggedRailwaySystems/ Boxed_Computer/PIS-5500_Series.

June 2019 // Railway Age 49

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ALL MAJOR CREDIT CARDS ACCEPTED 50 Railway Age // June 2019

railwayage.com RTS_RailBriefAd_QuarterPage_Final_2019.indd 1

3/1/19 4:05 PM

Ad Index Company

Phone #

Fax #

URL/Email Address

Page #

alstom

514-673-5278

847-623-6139

elaine.west@transport.alstom.com

C2

Amsted Rail Group

312-922-4516

312-922-4597

kskibinski@amstedrail.com

36

cit

212-461-5781

212-461-5632

James.Spencer@cit.com

26

Danella Rental Systems, Inc.

561-743-7373

561-743-1973

SBolte@danella.com

12

David J Joseph Company

513-419-6200

513-419-6221

txs@djj.com

18

Dixie Precast

770-944-1930

770-944-9136

fbrown142@aol.com

39

HARSCO RAIL

803 822-9160

803 822-8107

railinfo@harsco.com

13

Holland Lp

708-672-2300

708-672-0119

rgehl@hollandco.com

33

katahdin Railcar services

207-848-4287

207-848-4346

customerservice@krs-cleaning.com

25

Loram Maintenance of Way, Inc

763-478-6014

763-478-2221

sales@loram.com

9

724-864-8900

724-864-8909

bspringer@irwincar.com

32

49 30 30381852

49 30 3038 2278

just@messe-berlin.de

15

next gen train control

212-620-7205

212-633-1165

conferences@sbpub.com

35

Pandrol USA, L.P.

800-221-CLIP

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plasser american corp

757-543-3526

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PNC Equipment Finance

513-455-9056

Progress Rail A Caterpiller Co

256-505-6402

RailSolutions, Inc.

LTK Engineering Services Messe Berlin GMBH

38 plasseramerican@plausa.com

C3

robert.hogan@pnc.com

21

256-505-6051

info@progressrail.com

23

757-903-4606

757-903-4705

jhusband@railsolutionsinc.com

20

railway tie association

770-460-5553

770-460-5573

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11

rce equipment solutions, inc.

866-472-4510

630-355-7173

dennishanke@rcequip.com

14

railway educational bureau

402-346-4300

402-346-1783

bbrundige@sb-reb.com

30,41,46

630-685-461

859-885-7804

sales@salcoproducts.com

3

salco products inc SIEMENS

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7

SMBC RAIL SERVICES

312-559-4800

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24

STV Inc

212-777-4400

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34

TRAINYARD TECH LLC

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40

trinity rail

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C4

vtg rail

480-248-2457

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22

212-529-5237

888-379-2347

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.

railwayage.com

June 2019 // Railway Age 51

Perspective: Short Line & Regional

Telling Our Story on Capitol Hill

O

n May 8, more than 400 representatives from the railroad industry participated in 350 Congressional meetings as part of our annual Railroad Day on Capitol Hill. Participants came from every part of our industry—short lines and Class I’s, rail labor, suppliers, contractors, shippers and local economic development officials.

It was a show of force that focused the attention of Congress on our industry’s importance to the economy, the environment, our geographic reach and the critical role railroads play in providing the competitive transportation services that keep American businesses moving. It was an exhausting (but fun!) day for participants, and we owe them hearty thanks for taking the time and expending the energy needed to make this day a success.

Railroad Day is all about telling our story, both at the industry-wide level and at the individual railroad level. There are more than 600 short lines in the country, working with thousands of different customers to solve transportation problems every day, so there are near endless stories to choose from, but here are two good ones: The Texas & New Mexico Railroad (TXN) found itself in a quickly changing oil market where supply and demand and changing transportation patterns for frac sand and diesel presented an opportunity to substantially increase rail traffic.

Diesel needs began to exceed pipeline capacity, requiring inbound diesel for operations to be trucked 450 miles. Crude oil production had also exceeded pipeline

400+ railroaders participated in 350 meetings

52 Railway Age // June 2019

capacity, and truck shortages resulted in some 300,000 barrels of oil per day being stranded in place.

The solution required the cooperation and financial resources of the shipper, the short line and the Class I connection. The shipper made an underutilized terminal on its property available. TXN required new access points into the terminal and capacity increases on its own property.

TXN interchange partner Union Pacific would also have to fund capacity increases and obtain enough DOT 117 cars to move the product.

All this planning and facility improvement was accomplished in 120 days from inception to completion, and 4,000 carloads of crude oil were shipped in the first four months.

Lake State Railway (LSRC) customer Weyerhaeuser operates an Oriented Strand Board (OSB) production facility in Grayling, Mich. In 2018, Weyerhaeuser proceeded with a planned shutdown to retool the facility to extend the life of the plant. During the shutdown, LSRC would lose rail traffic, and local loggers would lose work.

While planning for the shutdown, Weyerhaeuser noted that, following Hurricane Florence, it had to furlough workers at its OSB mill on the Appalachian & Ohio Railroad (A&O) in Heaters, W.Va., due to a lack of local logs. LSRC saw an opportunity to move logs from Michigan to West Virginia but faced significant hurdles.

Neither LSRC nor the connecting railroads had the specialty equipment needed for the move. The participating railroads would have to offer a rate that could compete with what was historically a cheaper short-haul move. Neither LSRC nor Weyerhaeuser had a suitable loading site for the logs.

The solution involved working out a very competitive rate with LSRC’s connecting partners, CSX and A&O, and locating suitable LSRC yard track capacity for loading.

The third piece of the puzzle was securing the specialty equipment, none of which was available on the three railroads. In this instance LSRC located a fleet of underutilized CN log cars in neighboring Wisconsin. CN was not en route, and the car-hire

our elected officials should know the importance of what we do .” on the cars was not sufficient to justify sending them off line. But CN was eager to make this work for those with whom they did business elsewhere, and a satisfactory arrangement was made.

The results are a win-win-win-win for everyone. The LSRC has moved 40,000 tons of logs in the first quarter of 2019, and Weyerhaeuser was able to keep the West Virginia facility open and mitigate job losses.

These stories are being replicated in state after state across the country. They are stories about cooperation that preserve competitive rail service for shippers and jobs for employees. They are stories that demonstrate the creative spirit and problem-solving mindset of railroad entrepreneurs. They are the stories that highlight the railroad industry’s constant effort to do things better today than yesterday.

They are the stories we told members of Congress during Railroad Day on Capitol Hill, and that we must continue to tell so that our elected officials understand the importance of what we do and the need for them to enact public policies that allow the railroad industry to succeed.

Chuck Baker President ASLRRA

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