O c to b e r 2 0 1 9
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An Unpredictable Equipment Market
BUILDING BETTER BALLAST
Good Drainage, and a Whole Lot More
HIGH CAPACITY I PRECISION I RELIABILITY
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JUNE 20192019 OCTOBER
23 FEATURES
13
A Look Inside
16
CNGMotive
23
New Acela Express Interiors
CNG Fuel Tender Revealed
Financial Desk Book Leasing Stands On a Crossing
34
Building Better Ballast
38
TTCI R&D
40
TOD in Philadelphia
State-of-the-Art Machinery
Looking for Deep Wheel Flaws
Building Better Neighborhoods
DEPARTMENTS 4 6 8 44 44 44 45 46 46 47
Industry Indicators Industry Outlook Market People 100 Years Ago
COLUMNS 2 10 48
From the Editor Watching Washington ASLRRA Perspective
Events Products Professional Directory Classified Advertising Index
On the Cover: CNGMotive’s compressed natural gas fuel tender. Photo: William C. Vantuono
Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 88 Pine St., 23rd Fl., New York, NY 10005-1809. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 220, No. 10. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/ or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2019 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212221-9195. 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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October 2019 // Railway Age 1
FROM THE EDITOR
AILWAY GE Subscriptions: 800-895-4389
Build It, And They Will Want One
H
ere’s a littleknown but significant development: Texas Central, which is developing a privately financed HSR line connecting Houston and Dallas, announced late last month that the Federal Railroad Administration approved a petition for a rulemaking to issue a “Rule of Particular Applicability (RPA).” An RPA (yikes, another acronym!) is described as “a comprehensive set of custom rules that will be applicable specifically to Texas Central and used to govern the railroad’s system and operations.” An RPA is not an FRA waiver, in the sense that most of us know. Essentially, FRA’s RPA approval means Texas Central will be able to build and operate, with virtually no modifications, Japan’s proven and so-far 100% accidentfree (since 1964) Shinkansen HSR technology. The trainsets will be the 200-mph active-tilt N700I (International) Series, jointly developed by JR Central and JR West for deployment outside of Japan. Texas Central filed the RPA petition in April 2016. No suprise that, under the common-sense-railroader leadership of Federal Railroad Administrator Ron Batory, the petition was approved. Texas Central can now move forward with what is likely to be the nation’s first true high-speed rail system—in all likelihood ahead of California. It doesn’t matter where the first U.S. dedicated HSR line opens for
business—California or Deep in the Heart of Texas. During the past 30 or so years, there have been many false starts—so many that most of us have lost count. We’ve fallen, as a nation, way behind the rest of the world. The advocates keep advocating and hoping, sometimes in the face of meanspirited political interference (thank goodness Jeff Denham got booted out of California’s Congressional delegation). That’s good, because somebody has to keep pushing. That’s how we got to the moon 50 years ago, several years after John F. Kennedy was cut down in the prime of his remarkable Presidency. JFK’s vision—“We choose to go to the moon, not because it is easy, but because it is hard.”—didn’t die with him. Suffice to say that once the first true HSR system is up and running, many around the U.S. will say, “Hey! We want one of those!” Just like light rail, eh? Paraphrasing Field of Dreams, “Build it, and they will want one.” For those of you who like to split hairs (or rails), Amtrak’s Northeast Corridor is not true HSR. It’s shared-use, where the majority of trains are regional/commuter, mixed in with some freight. So, in the technical sense, the NEC is higher-speed rail (HrSR). But check out the new Acela Express interiors (p. 13). They’re just the ticket!
WILLIAM C. VANTUONO Editor-in-Chief
Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, 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. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of Simmons-Boardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:
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Editorial and Executive Offices Simmons-Boardman Publishing Corp. 88 Pine Street, 23rd Fl. New York, NY 10005-1809 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr. President and Chairman JONATHAN CHALON Publisher jchalon@sbpub.com WILLIAM C. VANTUONO Editor-in-Chief wvantuono@sbpub.com ANDREW CORSELLI Managing Editor acorselli@sbpub.com BILL WILSON Engineering Editor/Railway Track & Structures Editor-in-Chief wwilson@sbpub.com DAVID C. LESTER Managing Editor, Railway Track & Structures dlester@sbpub.com Contributing Editors: David Peter Alan, Roy Blanchard, Jim Blaze, Peter Diekmeyer, Alfred E. Fazio, Bruce Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Art Director: Nicole D’Antona Graphic Designer: Hillary Coleman Corporate Production Director: Mary Conyers Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors David Briginshaw db@railjournal.co.uk Keith Barrow kb@railjournal.co.uk Kevin Smith ks@railjournal.co.uk David Burroughs dburroughs@railjournal.co.uk Customer Service: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 curt.ciesinski@parsintl.com railwayage.com
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Industry Indicators AAR: “Should We Say Lowlights?” “It seems clear that U.S. railroads are facing a freight recession,” the AAR reported last month. “Total originated U.S. rail carloads fell 4.6% in August 2019 from August 2018, the seventh straight year-over-year decline. The average decline over those seven months was 4.2%, a not-insignificant amount. Meanwhile, U.S. intermodal volume fell 5.4% in August, also the seventh straight monthly decline. For the first eight months of 2019, total U.S. carloads were down 3.4%, and intermodal was down 3.9%. Why? The parts of the economy that generate much of the freight that railroads carry—manufacturing and goods trading—have weakened significantly over the past several months.”
Railroad employment, Class I linehaul carriers, AUGUST 2019 (% change from august 2018)
TRAFFIC ORIGINATED CARLOADS
Four WEEKS ENDING August 31, 2019
MAJOR U.S. RAILROADS by Commodity
AUG ’19
AUG ’18
% CHANGE
58,491 (-1%)
Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron & Steel Scrap Motor Vehicles & Parts Crushed Stone, Sand, & Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads
84,511 3,327 36,740 22,886 131,360 49,957 330,734 4,888 13,663 22,036 24,096 15,630 35,858 15,424 68,099 99,982 17,974 36,910 14,495 26,816
89,876 3,224 37,654 23,879 131,121 46,345 367,035 4,539 14,766 24,068 24,950 17,439 41,012 15,683 67,845 105,733 16,233 34,343 16,587 23,726
-6.0% 3.2% -2.4% -4.2% 0.2% 7.8% -9.9% 7.7% -7.5% -8.4% -3.4% -10.4% -12.6% -1.7% 0.4% -5.4% 10.7% 7.5% -12.6% 13.0%
Executives, Officials, and Staff Assistants
Total U.S. CarLoadS
1,055,386
1,106,058
-4.6%
331,482
334,375
-0.9%
1,386,868
1,440,433
-3.7%
Total employees: 139,284 % change from AUGUST 2018: –1%
Transportation (train and engine)
7,703 (-1%)
CANADIAN RAILROADS
Professional and Administrative
total CANADIAN carloads
11,319 (-1%)
COMBINED U.S./CANADA RR
Maintenance-of-Way and Structures
31,629 (-1%)
Maintenance of Equipment and Stores
24,627 (-1%)
Transportation (other than train & engine)
5,515 (-1%)
Source: Surface Transportation Board
EMPLOYMENT DECLINING SLOWLY Figures released by the STB show Class I total railroad employment again dropped 1% in August 2019, measured against August 2018. For the second consecutive month all six employment categories experienced virtually the same percentage drop, 1%, when rounding is taken into account. This most certainly indicates headcount reductions attributable to Precision Scheduled Railroading, as well as economic factors. Longer term, it’s difficult to predict where employment is headed (but we noted that last month, the month before, and the month ... ).
4 Railway Age // October 2019
Intermodal
Four WEEKS ENDING AUGUST 31, 2019
MAJOR U.S. RAILROADS by Commodity
AUG ’18
% CHANGE
103,351
1,089,849
1,048,337 1,151,688
-17.8% -4.1% -5.4%
1 295,354 295,355
0 287,888 287,888
2.6% 2.6%
Trailers Containers
85,001 1,300,203
103,351 1,336,225
-17.8% -2.7%
TOTAL COMBINED UNITS
1,385,204
1,439,576
-3.8%
Trailers Containers TOTAL UNITS
AUG ’19 85,000 1,004,849
CANADIAN RAILROADS Trailers Containers TOTAL UNITS
COMBINED U.S./CANADA RR
Source: Rail Time Indicators, Association of American Railroads
railwayage.com
TOTAL U.S./Canadian CARLOADS, AUG. 2019 VS. AUG. 2018
1,386,868 August 2019
AILWAY GE
1,440,433 August 2018
Short Line And Regional Traffic Index CARLOADS
by Commodity Chemicals Coal Crushed Stone, Sand & Gravel Food and Kindred Products Grain Grain Mill Products Lumber and Wood Products Metallic Ores Metals and Products Motor Vehicles and Equipment Nonmetallic Minerals Petroleum Products Pulp, Paper and Allied Products Stone, Clay and Glass Products Trailers / Containers Waste and Scrap Materials All Other Carloads
ORIGINATED AUGUST ’19
ORIGINATED AUGUST ’18
% CHANGE
52,935 20,711 31,537 10,591 23,894 7,941 9,396 2,582 17,595 11,551 2,672 2,408 18,587 14,535 47,550 10,238 84,888
50,844 25,900 32,193 10,933 24,609 6,978 10,235 3,143 21,184 10,578 2,005 2,394 19,999 15,337 45,627 11,135 91,768
4.1% -20.0% -2.0% -3.1% -2.9% 13.8% -8.2% -17.8% -16.9% 9.2% 33.3% 0.6% -7.1% -5.2% 4.2% -8.1% -7.5%
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?
Visit http://bit.ly/railjobs To place a job posting, contact: Jennifer Izzo Data are average weekly originations for each month, are not seasonally adjusted, do not include intermodal, and do not include the U.S. operations of CN and CP. Source: AAR
railwayage.com
203-604-1744 jizzo@mediapeople.com
October 2019 // Railway Age 5 RA_JobBoard_1/3Vertical.indd 1
9/30/19 3:16 PM
Industry Outlook FRA reports PTC 87% Complete
Surface Transportation Board May Reach Full Strength in 2020 The two vacant seats on the fivemember U.S. Surface Transportation Board (STB) could be filled by early 2020, as a Democrat—to be paired with an already nominated Republican—has emerged as a likely nominee. Robert Primus, age 49 and a career congressional staffer, is in line to be nominated by President Trump following a written recommendation to the White House by Senate Minority Leader Charles E. (Chuck) Schumer (D-N.Y.). If formally nominated, Primus will be paired with Republican nominee Michelle A. Schultz, whose earlier Senate confirmation has been stalled more than two years pending nomination of a Democrat. Primus and Schultz, if confirmed by the Senate, would join Republican Chairman Ann D. Begeman, Republican Patrick J. Fuchs and Democrat Martin J. (Marty) Oberman on the STB, whose current primary mission is the economic regulation of railroads transporting freight in interstate commerce. It is unlikely that the confirmation process could be completed before December. If all goes well, Senate confirmation votes more likely would occur in early 2020. 6 Railway Age // October 2019
Although STB predecessor Interstate Commerce Commission (ICC), created in 1887, had as many as 11 Senate-confirmed members as recently as 1982, that number was paired by Congress to five by 1986—and just three for successor STB when created in December 1995. In 2015, Congress increased the number of Senate-confirmed STB seats to five. Republican Fuchs, age 30, filled one of the 2015-created vacant seats in January 2019, for a five-year term expiring Jan. 17, 2024; while Democrat Oberman, age 74, filled a seat previously occupied by former STB Chairman and Democrat Daniel R. Elliott III, giving Oberman a term to expire Dec. 31, 2023. Democrat Primus would fill a seat left vacant by former STB member and Democrat Debra L. (Deb) Miller—a seat that will expire Dec. 31, 2022. Republican Schultz would gain the second of the 2015-created seats, with a term expiring exactly five years from the date of Senate confirmation. Republican Begeman, age 55, in her statutorily final second term, holds a seat expiring Dec. 31, 2020. —Frank N. Wilner
With 15 months left until the Congressionally mandated Dec. 31, 2020 deadline for full implementation of PTC (Positive Train Control), the U.S. railroad industry is drawing close, according to the Federal Railroad Administration’s Second-Quarter 2019 PTC Progress Report. Based on the railroads’ SecondQuarter 2019 PTC Progress Reports, the 42 railroads subject to the PTC mandate “are making steady progress,” FRA announced on Sept. 9. “As of June 30, 2019, PTC systems were in operation on approximately 50,300 (87%) of the nearly 58,000 route-miles required to be equipped by Congress. This reflects a 4% increase since first-quarter 2019. Nonetheless, railroads must still complete significant work to fully implement their PTC systems by Dec. 31, 2020, especially with respect to activating PTC systems on the remaining required main lines and achieving interoperability with tenant railroads.” The Class I’s reported that PTC systems are in operation on approximately 91% of their required main lines as of June 2019, a 4% increase since the first quarter. As a host railroad (owned trackage), Amtrak reports that approximately 899 of Amtrak’s 901 (99.8%) required route-miles (Northeast Corridor, Michigan and California) are governed by a PTC system. In addition, Amtrak informed FRA that its operations are currently governed by a PTC system on at least 16,032 of the 19,119 route-miles (84%) where Amtrak operates as a tenant railroad on other railroads’ PTC-equipped main lines. Host commuter railroads reported that, as of June 2019, they were operating their PTC systems in revenue service demonstration (RSD), a type of required advanced field testing, on approximately 698 route-miles and in revenue service on 443 routemiles, which, in total, is 37% of the host commuter railroads’ 3,111 required route-miles and a 12% increase since 1Q2019. railwayage.com
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Market New Harsco Rail Tamper For CN Harsco Rail’s TX16 tamper, which it is supplying to CN, is the company’s first new machine since the 1990s. Development began three years ago, and the resulting vehicle completely rethinks Harsco’s previous models. The cab is repositioned at the front, while the vehicle deploys fully automated tamping, integrated measurement and hybrid indexing that, in automatic mode, transforms the role of the operator to largely an observer. The four independent tamping units on two traversing frames increase productivity by 50% compared with previous models, with the tampier completing work on 33 crossties per minute during trials, although it will tamp 30 when in service.
WORLDWIDE
NORTH AMERICA
French National Railways (SNCF): Awarded a consortium of Alstom and Setec Ferroviaire a $55 million contract to supply ERTMS Level 2, configurable to hybrid Level 3, for the Paris – Lyon highspeed line.
The Andersons, Inc.: Selected RailcarRx as the railcar repair software provider for its Rail Group. The Andersons Rail Group “is a trusted expert source for railcar leasing and railcar repair. As a RailcarRx customer, The Andersons is providing RailcarRx RMS (Repair Management System) to its entire North American railcar repair network, including 26 railcar repair shop facilities.” RailcarRx and The Andersons will aim to work to optimize their ability to adapt to evolving business challenges with continued improvements to their platform. RailcarRx RMS is supporting both contract repair operations and AAR running repair operations for The Andersons. The Andersons partnered with RailcarRx in November 2018 and were fully implemented in August 2019.
ALSTOM: Awarded Voith a contract to supply its diesel-mechanical RailPack 400DM power packs for installation in Coradia Lint DMUs over the next five years, with an order for the first 24 units having been approved.
Anacostia Rail Holdings Co. (ARH) and Brown Brothers Harriman Capital Partners (BBHCP): Have formed Precision Terminal Logistics (PTL), a jointly owned entity that will operate, build and acquire transloading terminals across the U.S. PTL, which has 8 Railway Age // October 2019
acquired select assets from Arrow Material Services, LLC, a provider of transloading and related services, will operate from a headquarters in the Pittsburgh, Pa., area, with 23 terminals and facilities in 15 states. PTL’s terminals will provide materials handling, logistics services, transloading, secure bulk commodity storage and facility construction. PTL has appointed Ray Nixon as its CEO; he brings more than 20 years of transloading experience to the new company. Alaska Railroad (ARRC): Issued a Request for Qualification (RFQ) for interested parties to describe their capabilities and concepts for replacing Seward Cruise Terminal, its aging passenger dock and cruise terminal facilities. ARRC said it plans to identify potential partner(s) by the end of 2019, and to negotiate project details in 2020. The Seward Cruise Terminal Replacement project stems from an extensive Seward Marine Terminal Expansion Planning project (a.k.a. Railport Seward) in 2016-2017. The effort resulted in a master plan for developing the railroad’s Seward Reserve, including docks, terminal facilities and uplands. railwayage.com
NE TGEN R A I L W AY A G E P R E S E N T S
FREIGHT RAIL
Beyond Track. Beyond Trains.
#NGFR20
WHERE IS THE GROWTH IN FREIGHT RAIL? DISCUSSIONS INCLUDE:
• Automatic freight train operation: How soon? • PSR after one year: Is it working? • Next-gen motive power: Battery, CNG, LNG • Railroads, shippers, rate cases and the STB • New business worth – or not worth – pursuing • Innovative freight car designs
MAR. 10, 2020
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Watching Washington
Labor Talks Include a Witches’ Brew
P
repare for the oldest lawfully established permanent floating craps game in America— national wage, benefits and work rules negotiations between most Class I freight railroads and their labor unions. Desired contract revisions—Section 6 notices in the parlance of the 93-year-old Railway Labor Act—will be exchanged Nov. 1, followed by collective bargaining. Anticipate initial theatrical bluster trailed by a kabuki-like dance leading to substantive negotiations aided by federal mediation and, hopefully, enlightened mutual compromise. Otherwise, there occurs a strike or lockout—“snake eyes” in dice-game jargon, where Congress imperfectly, and typically to the dismay of both parties, resolves what they cannot. Such intervention is remarkably rare, but this round’s briar patch is particularly barbed. As rail labor contracts remain in force until revised through collective bargaining or third-party determination, there is no time-clock deadline to reach settlement. The previous round began in January 2015 and concluded peacefully in late 2018, with retroactive revisions. THE BASICS Twelve unions representing 140,000 rail workers—some 90% of the workforce— will bargain with the multi-employer National Carriers’ Conference Committee (NCCC), which represents most Class I freight railroads and many smaller ones. The NCCC’s chief negotiator is Brendan
2019 FRA ruled that
“no regulation of train crew staffing is necessary or appropriate for railroad operations to be conducted safely at this time” 10 Railway Age // October 2019
Branon, Chairman of the National Railway Labor Conference. On the opposite side will be the unions’ elected presidents, who typically choose among themselves lead negotiators. Branon is a veteran negotiator recruited last year from Delta Airlines to succeed Kenneth Gradia, who retired. Branon will be joined at the bargaining table by the senior labor relations officers of Class I railroads. While it will be Branon’s first rail bargaining round, airlines also bargain under provisions of the Railway Labor Act, and most of the carrier negotiators have prior experience with their union counterparts. Branon left Delta with a solid reputa-
Managing change, not blindly opposing it, is the stuff of meaningful, long-lasting job and income protection.
tion. The Air Line Pilots Association chief negotiator on Delta, Capt. Bill Bartels, told Railway Age that Delta “will be challenged to find someone who is as familiar with pilot issues” in future contract negotiations as was Branon. Joining BNSF, CSX, Kansas City Southern, Norfolk Southern and Union Pacific at the bargaining table will be CN (U.S. rail operations). CN’s previously different contract-reopening dates have been realigned to those of other Class I railroads at the table, and while CN stands alone with hourly wage rates for U.S. train and engine service (T&ES) employees, the NCCC says “nothing prohibits” CN from bargaining collectively with carriers having trip rates. Canadian Pacific, with U.S. operations, is not an NCCC member and bargains separately. Many smaller railroads limit NCCC participation to benefits issues. This round could be one of the lengthier
and more difficult, with impasse looming over wage increase demands, healthcare cost sharing and minimum train crew size. WAGES Downward pressure on wage demands will be exerted by a slower-growth economy; a feared long-term economic impact of the trade war; a permanent shift by electric utilities away from higher-margin rail-delivered coal; and a seven-month, year-overyear skid in carloadings—even excluding coal and grain traffic. Railroads will emphasize that their employees rank in the top 6% of wage earners nationwide, with average annual compensation—wages plus benefits—of some $122,000. Since 2006, rail wage rates rose by 43% vs. 29% for other U.S. workers; while since 2015, wages of the highest-paid rail worker increased by some $33,000 annually and more than $16,000 for lower wage rungs. But economists predict America’s unprecedented 10-year economic expansion is ending, as evidenced by deteriorating rail traffic. Unions will cite a profit-boosting pounding down of rail operating ratios; many billions of dollars in stock buybacks and dividend hikes following a $16 billion windfall from 2017 tax reform, spawning rank-and-file resentment; and argue that world-class customer service and safe train operation require a stable, well-trained and motivated work force whose quid pro quo is elevated compensation. HEALTHCARE INSURANCE Healthcare costs continue to soar. Studies say the net cost to railroads for providing employee healthcare insurance—plan costs minus employee contributions—is 52% greater than average employee plans; and even with cost sharing, railroad healthcare plans pay some 90% of each member’s family healthcare costs. Rail negotiators will compare the railroad plan with universally less-generous plans, including those covering congressional staff, whose premiums, copays and deductibles are significantly higher. The message is that if negotiations turn south and Congress legislates a new agreement to end a work stoppage, sympathy for labor’s railwayage.com
Watching Washington
refusal to shoulder additional healthcare costs may be walking its own picket line. In 1991, a Democratic congressional majority voted to end a strike on terms embraced by railroads. Unions will argue that for many crafts, railroading is a dangerous occupation with additional health risks from unpredictable schedules, harsh weather environments, being continually on call and frequent stays away from home. They will cite their lower healthcare cost-sharing as having been “purchased” in exchange for previous lower wage hikes. WORK RULES As carriers pursue revisions to contractual minimum train crew size, look to Shakespeare’s “Macbeth” to describe that witches’ brew—“double, double, toil and trouble; fire burn and caldron bubble.” Union activists still call a 1991 agreement reducing five-person crew size to one conductor and one engineer “a bloody shirt to be waved around.” They are in no mood to discuss further crew-size reductions until, as agreed in 1991, the last protected employee resigns, retires or dies. In their favor, a federal court turned back a 2006 carrier attempt to renegotiate in national handling, ruling that crew-consist changes be sought on individual railroads where they were first reached—and not before all protected employees departed. Notably, when a lone-wolf general committee of the conductors’ union—SMART-TD— reached a tentative pact with BNSF in 2014 to allow one-person crews for non-hazmat trains operating over some 60% of the BNSF network where Positive Train Control (PTC) is in place, ratification failed despite a BNSF offer of lifetime income protection. Many members are said to be rethinking that “no” vote, realizing vulnerability on seniority districts where protected employees have disappeared, giving carriers other options that may not be so generous in return. For sure, PTC—defined by the Federal Railroad Administration (FRA) as “integrated command, control, communications and information systems designed to prevent train accidents by controlling train movements with safety, security, precision and efficiency”—dilutes contentions that railwayage.com
two crew members always are required for safe train operation. In fact, the FRA ruled in 2019 that “no regulation of train crew staffing is necessary or appropriate for railroad operations to be conducted safely at this time”—an edict likely to be upheld by federal courts under the Supreme Court’s 1984 Chevron and 1997 Auer doctrines that “deference” be given expert federal agency decisions. The FRA also exercised federal preemption authority to invalidate application of union-encouraged state laws mandating minimum train-crew size within state borders. As for union-sought congressional legislation mandating twoperson crews, meaningful support is nonexistent, as fewer than 110 of 435 House members have co-sponsored it, and there is no Senate counterpart. Although carriers will not openly talk strategy, an option is to operate some trains with just one engineer, but pay the conductor to be idle and precipitate a contractinterpretation dispute requiring binding arbitration. Carriers might also retest the 2006 federal court ruling blocking renegotiation of crew consist at the national level. As some seniority districts no longer have protected employees, a different court ruling may emerge. Not lost on BNSF conductors is that rival Brotherhood of Locomotive Engineers and Trainmen has on BNSF a “last-man-standing” agreement to boost pay for engineers working absent a conductor. A witches’ brew, indeed, calling for savvy negotiating skills on both sides, with recognition that labor and management, rather than being enemies, must collaboratively innovate to protect and grow railroads’ market share against the real enemy— motor carrier encroachment. Managing change, not blindly opposing it, is the stuff of meaningful, long-lasting job and income protection, as no labor union ever has stopped the advancement of technology—which also is progressing among rail competitors. (Wilner is author of “Understanding the Railway Labor Act,” available from Simmons-Boardman Books, 1-800-228-9670, www.transalert.com.)
90% of railroad workers will bargain with the NCCC
90% of employee healthcare costs are paid by carriers
43% increase in wage rates since 2006
FRANK N. WILNER Contributing Editor October 2019 // Railway Age 11
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Amtrak Interiors
Amtrak Vice President Northeast Corridor Caroline Decker in a mockup of an “Acela Class” car.
a look inside All photos: William C. Vantuono
Amtrak’s new Acela Express is spacious, comfortable, and designed with ergonomics in mind. By William C. Vantuono, EDITOR-IN-CHIEF
A
mtrak’s Acela Express, which replaced the iconic Metroliner service that helped define the Northeast Corridor for the better part of 30 years, is now approaching age 20 (kind of old for a passenger train). The equipment, popular with customers but sort-of-affectionately called “The Fast Pig” in railroading circles because of its heavy weight (25-ton axle loads), will soon be replaced with new, lighter, sleeker and faster trainsets from Alstom now under construction in Hornell, N.Y. railwayage.com
Here’s a look inside the sleek new equipment. While the existing trainsets are comfortable, some of the interior features tend to be on the clunky, bulky or unwieldy side. Not so with the new trainsets. This time, the designers got it right. Based on the mockups Railway Age saw at Alstom’s plant in New Castle, Del., these new trainsets are inviting, comfortable, ergonomic, spacious, and conducive to working, or just plain ol’ relaxing—the polar opposite of flying, which is what train travel is meant to be. The engineer’s cab is, well, unusual for North America, with
a center-seating position a la TGV, and smartly placed controls. This is rather “European,” but definitely “American,” if we’ve defined the look and feel of an American high(er) speed trainset. Perhaps we have. Here’s what Northeast Corridor passengers can look forward to sometime in 2021, when the first trainset is expected to enter revenue service: • Larger windows with pull-down shades. • Winged headrests with built-in adjustable reading lights. Every seat has convenient, center-mounted electrical October 2019 // Railway Age 13
Amtrak Interiors
The engineer’s position in the cab is located in the center, a location identical to that of the French TGV. Forward visibility is quite good, and occupant protection is excellent. The trainsets are being built to Federal Railroad Administration Tier III crashworthiness standards, with CEM (Crash Energy Management) technology. The passenger coaches feature OVI (Occupied Volume Integrity) construction, whereby energy travels through the carbody structure.
outlets and USB ports. There are builtin aisle hand-holds. There are also grab bars for stability, and what Amtrak calls “gap fillers to cover the space between the train and the platform, creating a smooth surface for entering/exiting the train.” In other words, retractable bridge plates. As well, when you’re walking between cars, you won’t have to step on a large, rubber, accordionlike contraption in the vestibules. Those have been smoothed over, making passage between cars much easier than the current equipment. • Streamlined, open overhead luggage racks and large, end-of-car open luggage racks, a vast improvement over the airline-type enclosed compartments with clunky, flip-up doors that often get left in the open position, creating an opportunity to bang one’s head. • The tables with facing seats have individual flip-up extensions, so a tablemate with a laptop or a meal doesn’t have to be disturbed from working or eating if you need to leave your seat. • More legroom, and flip-down footrests that riders say they like to have. 14 Railway Age // October 2019
• Two-tiered, fold-down at-seat tray tables. They’re light, a vast improvement over the current, anvil-like tray tables that often get stuck when you’re trying to slide them out. • Indirect, crew-adjustable lighting.
Overall, the new equipment is a significant improvement over the current Acela Express. • Spacious, fully accessible restrooms with “touchless” features and a 60-inchdiameter door turning radius. • E ach nine-car trainset will seat 378. There will be seven “Acela Class” cars (replacing “Business Class”) with 49 to 59 seats; one “First Class” car with 44
Two-tiered, lightweight fold-down at-seat tray tables are a vast improvement over the current equipment’s anvil-like tray tables that often get stuck when you’re trying to slide them out.
seats; and one Café car with no seats. The Café car will have, in addition to an attendant providing hot food, “self-select” refrigerators. These are not vending machines. You get what you want and pay for it at the counter. Amtrak calls this “convenient dining options, offering easy access and greater selection.” • High-resolution-LCD digital signage. • Individual receptacles for trash and recycling (sustainability—about time!). • Digital seat displays. Amtrak is evaluating an advance-seat reservation system. • Onboard Wi-Fi to “enhance the digital experience.” • Safety systems, such as CCTV cameras, that “provide real-time monitoring and ensure a safe and comfortable ride.” At this point, it looks like the new Acela Express will be well-worth the wait. Amtrak Vice President Northeast Corridor Caroline Decker, one of Railway Age’s first “Women in Rail” honorees, her staff, and the people at Alstom and numerous sub-suppliers deserve a round of applause. Hopefully, when this new equipment enters service, they’ll be worthy of a standing ovation. railwayage.com
Amtrak Interiors
Tables with facing seats have individual flip-up extensions, so a tablemate with a laptop or a meal doesn’t have to be disturbed if you need to leave your seat.
railwayage.com
Each nine-car trainset will seat 378. There will be seven “Acela Class” cars (replacing “Business Class”) with 49 to 59 seats; one “First Class” car (pictured) with 44 seats; and one Café car with no seats. The Café car will have, in addition to an attendant providing hot food, “self-select” refrigerators.
October 2019 // Railway Age 15
ALTERNATIVE FUELS Kasgro Rail Corp. built the prototype of what CNGMotive expects will be a fleet of compressed natural gas locomotive fuel tenders.
We’ve Got gas! 16 Railway Age // October 2019
railwayage.com
ALTERNATIVE FUELS CNGMotive has completed the industry’s first compressed natural gas locomotive fuel tender. Norfolk Southern will test it. BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF
All photos: William C . Vantuono
F
railwayage.com
ollowing seven years of painstaking research and development, CNGMotive, Inc., has rolled out the rail industry’s first compressed natural gas (CNG) locomotive fuel tender. The company co-founded in 2015 by David I. Scott and Pedro Santos has partnered with Norfolk Southern for a revenue service test. Kasgro Rail Corp. of New Castle, Pa., best known for building and operating Schnabel railcars, constructed the tender, which externally looks something like a combination of an intermodal well car and hi-cube boxcar. The Hale Hamilton Valves Ltd. business unit of U.K.-based CIRCOR provided the CNG pressure reduction and control systems. Scott, who retired from the former General Motors Electro-Motive Division after 38 years as Executive Director-EMD Locomotives, began his career as an EMD diesel engine design engineer and has pursued this CNG fuel concept tirelessly. Santos, who holds numerous patents in compression, natural gas storage and transportation and thermodynamic processes involving gas and hydraulics, conceived and invented CNGMotive’s foundational technologies, described as “nearisothermal multiphase compression technology,” field-proven and developed at Hicor Technologies, a company he founded. R. Thomas Scott designed the tender’s structure. He also had a long career at the former ElectroMotive Division of GM and in private consultation. An expert in locomotive structural design and analysis, suspension design, and noise and vibration analysis, Scott’s designs and patents cover areas of locomotive underframe structure, design of large castings and weldments, suspension design, isolated cab designs, linear and torsional vibration, interior noise and wayside noise control. Another key CNGMotive staff member is Sales and Marketing Director Graciela Trillanes, a former New Product Introduction Leader at GE Transportation (now Wabtec) Global Locomotive October 2019 // Railway Age 17
ALTERNATIVE FUELS
The tender incorporates two banks of 14 CNG cylinders, for a total of 28.
Operations. Trillanes was responsible for the 24 dual-fuel LNG (liquefied natural gas)/diesel-electric locomotives now in operation on Florida East Coast Railway, and also worked closely with the Federal Railroad Administration for approval of that technology. CNGMotive’s 4,600 DGE (Diesel Gallon Equivalent) fuel tender began life in 2012 as a Pedro Santos sketch on a white board. At the Sept. 19 rollout ceremony at Kasgro Rail, David Scott described CNG as “a transformational opportunity for the rail industry.” Norfolk Southern, which according to Director of Locomotives Mark Duve “really wanted to try CNG,” will be conducting a minimum-six-month test on a 400-mile, four-crew-district stretch of its Pocahontas Division between Williamson, W.Va., and 18 Railway Age // October 2019
“CNG represents a transformational opportunity for the rail industry,” says co-founder David Scott. Lambert’s Point, Norfolk, Va., in “captive” coal loop (loads and empty returns) service. CNG refueling, conducted by Roanoke Gas Company, and locomotive servicing will take place midway at Shaffer’s Crossing in Roanoke, Va. BNSF is loaning two EMD
locomotives originally used in its LNG testing program, 9130 and 9131, to NS. CNGMotive will provide the tender, fueling infrastructure, maintenance and training. The CNGMotive tender carries multiple CNG cylinders that hold methane gas at a high supply pressure in order to carry the required amount of fuel to operate the locomotives, which will be configured back-toback with the tender in the middle, between refueling operations. When the locomotives’ prime-movers are started and the throttles are placed in Notches 3 through 8, the high-pressure CNG is lowered by the tender’s PRS (pressure reduction system) to 100 psi at 40 to 70 degrees F before it crosses the fuel coupling over to the locomotives. When this low-pressure CNG is injected into the combustion chamber, a very small amount of “pilot” diesel fuel is railwayage.com
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ALTERNATIVE FUELS
The Hale Hamilton Valves Ltd. business unit of U.K.-based CIRCOR provided the tender’s CNG pressure reduction and control systems.
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simultaneously injected to compression-ignite it. As the locomotive consist increases in speed and horsepower, the amount of gas injected rises accordingly. The BNSF locomotives to be used in the test program require no changes from their prior LNG configuration. As such, “they are agnostic to the fuel,” Trillanes explains. “They can burn CNG or LNG. The pressure and temperature at the fuel coupler is the same, as well as the 21-pin electrical connectors for the control system.” Refueling of the locomotive/tender set, accomplished with Chill Fill® technology, is much faster than that of LNG. “There is multiyear successful application of the Chill Fill® technology in the oilfield and industrial virtual pipeline markets, and CNGMotive is the sole licensee of this intellectual property for locomotive fueling applications,” the company notes. “Our proprietary technology allows us to refill very large storage vessels in a 40-minute fill time and a less-than-one-hour total fill cycle.” In terms of safety, CNGMotive says it has followed 49 CFR 229 Subpart E, which applies to the regulation of locomotive electronics, in conducting and completing the tender’s safety analysis. The company has also complied with AAR M-1004 “Interoperable Fuel Tenders for Locomotives” specifications for crashworthiness, shock and vibration. The CNG specifications for M-1004, originally developed for LNG fuel tenders, are “ready for release,” according to Mark Duve. “The CNG tender and locomotives have safety systems that, in case of a leak, enable them to shut down immediately,” NS points out. “If a leak occurs, the methane gas will immediately vent off and move vertically into the atmosphere, due to this gas being lighter than air. It will not collect in low-lying pockets and present a safety railwayage.com
ALTERNATIVE FUELS hazard like other gases such as propane. Every safety component that has been installed for this application, as well as extensive FEA (Finite Element Analysis) and physical testing of the tender structure, is a vital component of the CNG fuel tender.” NS says that it “is committed to investing in the training of firstresponders along our test route on responding to accidents involving CNG.” The railroad will be employing its Operation Awareness and Response Safety Train to help educate first-responders, the general public and surrounding communities about the use of CNG as a fuel source. NS will also be educating these groups on the safety precautions that have been incorporated “to prevent any possible personal hazard.” NS adds that it is “working diligently with the FRA to address all safety issues that might arise during this preliminary test operation. Regulations can be expected to be developed to ensure that the safety of CNG as a railroad fuel is not compromised.” NS has requested an FRA letter of concurrence for test approval. CNGMotive expects that CNG locomotive operations “will result in a 95% reduction in particulate matter and a 20% reduction in carbon dioxide [compared to diesel]. 60% fuel substitution will mean significant cost savings with each round trip. CNG is currently an accepted transportation fuel for many applications: on-highway semi-trucks, buses, waste removal trucks, UPS delivery trucks and farm pick-ups. According to the American Gas Association, use of natural gas is becoming increasingly prevalent, as there
railwayage.com
Left to right, the CNGMotive team: R. Thomas Scott, Tom Gallagher, David Scott, Graciela Trillanes, Tim Kohler, Pedro Santos, Emily Logan, Tim Scott, Jim Irmis, Keith Fanta, Doug Coffey, Bob Spenk and Xuepel Yuan.
are 600,000 new natural gas customers each year. American businesses have saved $105 billion through the use of natural gas since 2009, and 42 states have adopted, or are considering, proposals to expand natural gas infrastructure.”
October 2019 // Railway Age 21
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
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2020 FINANCIAL DESK BOOK
Railcar Leasing
Stands On a Crossing
Bruce Kelly (cover and above)
W
elcome to the 2020 Railway Age Railroad Financial Desk Book. It is the time of the Harvest Moon, and a time when the hard work of the summer turns into the bounty of fall. It is also the time when fall conference season begins and companies plan for succeeding year budgets, demand forecasts and revenue projections. Woe to anyone looking to plan for 2020, considering the current state of the rail economy. The summer doldrums are turning out to be just doldrums in general. Rail is beset by a malaise that looks to be sitting squarely across all segments of the industry. Loadings are down generally (-3.7% YOY) with intermodal (-4% YOY), grain (-5.3% YOY) and coal (-6.6% YOY) showing decreases. Tariffs is a word whispered and yelled. It is impacting pricing, manufacturing and economic growth. Projections for car builds in 2020 are drifting downwards. The industry is on pace to deliver approximately 55,000 units in 2019 and then step down to deliver 20% to 30% fewer units in 2020. Sorry, that is a lot of negative news at one time. Decreases in loadings along with the
railwayage.com
movement by the railroads on the Precision Scheduled Railroading (PSR) front has led to decreases in lease rates across almost every commodity class. The likely potential optimism of early 2019 is being replaced by some concern and some worry. What fascinates the novice and the expert about the current state of the railcar market is the ongoing placement of additional orders even in the face of this weakness (12,000 car orders placed in 2Q2019). Looking backwards to mid-year, at the Railway Age Rail Insights conference, the discussion on the lease market had at its core fundamental questions that continue to demand an answer: Is the railcar operating lease market undergoing fundamental changes, and are these changes permanent or temporary? Answering those questions requires a few key pieces of information. Rail is a cyclical market that runs though boom/bust cycles that tend to last from 5 to 7 years. By one definition, the current boom cycle for railcars in North America has lasted roughly 10 years. In every year leading back to 2010, North America has built more railcars annually than replacement requirements. In other words, there has been continued
BY DAVID NAHASS, FINANCIAL EDITOR
expansion over the past 10 years. The total number of railcars in the North American fleet has increased by 10% since 2010. The period since 2010 has also been a period of low interest rates. What is so bad about measured growth? What’s bad is that the growth has been in car supply only. In the same time frame (2010-2018), total railcar loadings are at about the same level as they were in 2010, when the economy was coming out of the great recession. (See Figures 1 and 2, above and opposite.) The mix of these factors, continued expansion, cheap capital and slow overall growth has led to a market saturated with investors and assets. How did they get here? Flush with low-cost capital, investors have flooded the rail market enticed by the returns demonstrated by the long-term success of established operating lessors. Rail leasing has an attractive historical profile: better-than-average credit quality, long-lived fungible assets with a multitude of redeployment opportunities for most car types, and a monopoly on certain types of service where rail is often the first choice, the choice of last resort or the only choice for the longhaul nature of many commodity businesses. October 2019 // Railway Age 25
2020 FINANCIAL DESK BOOK Select Commodity All Traffic Autos, Trucks & Parts Chemicals …Agricultural Chemicals …Industrial Chemicals …Plastics Coal Crude Industrial Sand Crude Oil Crushed Stone Grain & Soybeans …Corn …Soybeans …Wheat Lumber and Wood Metallic Ores Pulp and Paper Steel & Other Metals
Cars Originated by U.S. Class I Railroads All Traffic
Carloads or Intermodal Units (000)
30,000
25,000
20,000
15,000
10,000
5,000 Include Zero on Vertical Axis Yes
0
No
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Data include the U.S. operations of CN and CP. © 2014–2019, Association of American Railroads.
Figure 1: Total railcar loadings are about the same as they were in 2010, following the Great Recession.
Companies rushing into the railcar leasing space armed with low-cost capital came to steal market share. They did this by buying assets at higher prices (both new and used) and placing them into leases at lower prices. New railcar prices remain relatively high in comparison to recent downturns in the market. In discussions with shippers and lessors, the prices quoted by manufacturers, even in the face of declining deliveries over the next 12 months, remains relatively high. Some of this is due to commodity prices. In spite of a weak and hopefully bottomed-out scrap market, railcar steel is still expensive. So railcar leasing today sits at a crossroads trying to interpret what happens next.
New money continues to enter the market or to search for avenues of entrance into the market; established players lament the level of competitiveness; and decreasing margins stress profitability and place limitations on opportunities for investment for companies that are used to higher returns. The current environment is a trend to the commoditization of the railcar leasing business, where the lowest price is victorious. Railcar leases contain a variety of highly negotiated business points (inbound and outbound freight, maintenance, conditions at return). However, at the end of the day, if price is what matters to an operator of rail equipment, price can almost always emerge
victorious. The question that hangs in the air for established players, new money and old money, is whether what we are seeing in railcar pricing today (a price war where the railcar is a commodity rather than a part of a lease product offered by a car owner) is the future of railcar leasing. Certainly, established players would prefer to return to days gone by (say pre-2010 or thereabouts), when rail moved through traditional boom/bust cycles and lessors ebbed and flowed with the tide. Perhaps that ship has sailed. In a highdollar volume market (and yes, rail, at 50,000 railcars averaging $100,000 each, is a high-dollar volume market), it would
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Rob Blankemeyer-President 2593 Wexford-Bayne Road, Suite 205; Sewickley, PA 15143 724-766-6699 rblankemeyer@railsolutionsinc.com www.railsolutionsinc.com Investors’ Guide Inquiries: info@railsolutionsinc.com 26 Railway Age // October 2019
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2020 FINANCIAL DESK BOOK
Figure 2: The total number of railcars in the North American fleet has increased 10% since 2010.
be naïve to think that market efficiency wasn’t inevitable. In the early days of this historic run of low interest rates, the return on invested capital earned by investors in rail (operating lessors) stayed at historically normal levels. Those returns started to look outsized vs. returns being received by other investors in other markets (such as aerospace), and rail became more interesting, more lucrative and created more opportunities to deploy capital. Companies are public (GATX, Trinity, CIT, etc.) so there were few places to hide. When capital piles into a market, it wants to buy. Every manufacturer and lessor is a willing seller. As the saying goes, everything is for sale; it
is a question of at what price. In the lifecycle of a market, the piling in of money willing to accept lower returns is generally met by a willingness to accept more risk, followed by a culling of investors who exit the market looking for higher returns elsewhere. In technical terms, this is known as market “maturity.” However the cyclicality of railcar building, loadings volume and railcar demand spins this top a little differently. There is a generalized consensus that following a resolution to the tariff-based conflicts currently at play with China and other countries (in a pre-election fit of benevolent largess by a President Trump up for re-election), manufacturing and the overall
market will begin to rebound in the second half of 2020 and lead to a strong 2021. This could lead to a rising tide and a strengthening of demand, rates and lessor returns. This is only one half of the puzzle. As railcar loadings go, so goes the railcar-leasing marketplace. Considering the difficulty in maintaining increases in loadings across most types of bulk freight over the last 10 years, lessor and customers have to be concerned about the source of growth and demand. Precision Scheduled Railroading (PSR) and the “Cult of OR (Operating Ratio),” as our friend (and perennial Rail Equipment Finance speaker (www.railequipmentfinance.com) Anthony “Tony” Hatch (www.abhatchconsulting.com)
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October 2019 // Railway Age 27
2020 FINANCIAL DESK BOOK calls it, has had an impact on how the railroads view loadings growth and how customers view railroad service and each railroad’s desire to haul freight. Hatch has gone on record as saying, and has done so in a “Financial Edge” column, that the PSR teardown is a step along a longer pathway to railroad growth. He identifies CN as the example of how a PSR rationalization of assets turns into a growth story. In this case, Hatch is absolutely correct. CN has been vocal about its desire to grow its rail franchise. CN began its PSR revamp more than 15 years ago. What is difficult for rail consumers and car lessors to determine is how deep of an asset rationalization have the other PSR-adopting Class I railroads (CSX, NS, UP, KCS and CP) entered into, and how long will it take for them to turn, like the CN has, more aggressively toward growth? There are other factors at play. PSR and OR are directly tied to Wall Street and the market capitalization of the railroads. Both Barons and the Wall Street Journal have noted that the railroads have already
captured the benefits of PSR in their stock prices, and that additional volume declines will hurt stock prices. (As of this writing, five of six publicly traded Class I’s are trading at a price that is within 10% of their 52-week high; CSX is within 15%.) The point seems to be that the question of growth, strategic or otherwise, has no clear answer right now. That indeterminate strategy leaves all involved parties—lessors, customers, OEMs—scratching their heads. Better grip those chair arms a little more tightly; 2020 is likely to be a bumpy ride. Has the market for leasing really changed? The problem with definitive statements of that ilk is that the only constant regarding change is change itself. This cycle has some time to run to see if the mix of market efficiency and new seed and acquisition capital has the longevity to weather the ups and downs of railcar leasing. AROUND THE MARKET As if the rest of the Desk Book wasn’t filled with enough joy and optimism, here is a
1_2pgHorzWrkStTraining2019.qxp_Layout 1 7/17/19 10:00 AM Page 1
current update on the lease market. Covered Hoppers for Grain: 4750cf cars seem to be holding steady at $225 PCPM fullservice. They are one of the few bright spots (average age of this fleet is likely greater than 30 years). 5150 (5200)cf cars are in the low $300s. New cars (5400s) are in the high $300s to low $400s. This fleet is oversupplied, and with grain loadings decreasing, this seems unlikely to change in the short term. Covered Hoppers for Sand: The overabundance of cars in this market segment will persist for a number of years. Net rates in the low to mid $100s will persist. Anyone forecasting a rebound in this market on a set time horizon is using hope as a forecasting tool. Don’t believe it. Covered Hoppers for Plastics: There is optimism here as well as concerns about overbuilding. Rates are lower than they should be at low $500s net for newer or new cars, but the growth in plastics manufacturing facilities continues to build the order book for this car type. Boxcars: Demand here is about average,
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www.RailwayEducationalBureau.com 28 Railway Age // October 2019
railwayage.com
2020 FINANCIAL DESK BOOK with some building (TTX fleet replacement) but little overall expansion. The market is at mid $600s for newer cars, full-service. Coal Cars: Aluminum gondolas are off the mat, but no one really knows for how long. There are so many variables here (price of natural gas, environmental policy, price of scrap) that it could shift quickly. Prices range from the mid $200s to the low $300s full-service, but each deal has nuances (maintenance, return conditions, transportation, etc.), so that to keep cars working, there are lower numbers; to avoid paying to return cars, there may be higher numbers. Rapid-discharge cars are about the same, but there is less inventory here, and a shift in demand could cause those prices to rise higher and faster. Don’t believe the hype: Car supply is not yet close to parity, and the Henry Hub price for natural gas won’t even blink, even if oil moves north of $65/barrel. Mill Gons: Well, the scrap market is just ugh, ugly. With ferrous scrap in the mid $200s, everyone is waiting for a rebound that seems to keep being pushed further
out. As an aside, aluminum scrap is in the dumps as well. Mill gons, like many other car types, suffer from a critical logic flaw: The car price of a new car is too high to support the lease rates in the market. Lease rates are in the mid $300s full-service for existing cars (52-foot cars). There is some expectation for improvement here, but it is modest. Strategically, this market is likely to languish for the near term. Centerbeam Flatcars: Housing stops (er, starts) and Millennials. Enough said. Tank Cars for Crude: For 117J cars (built DOT spec), rates have come down from the lofty perches of the first half of 2019. The conundrum here is that car prices have only decreased a fraction of lease rates. Rates are squarely below $1,000 drifting down into the low $800s full-service for newer (and occasionally new) cars. For 117R (rebuilt DOT spec) cars, the market is like a kids’ ride that spins as fast as one can make it go. It starts out fun, but then there’s nausea. The railroads are quietly letting the world know that they do not intend to
move crude or ethanol in 117Rs long-term. It’s not public, and they will not legislate it, but by refusing to offer contracts and penalizing tariff rates, the trend is clear. These cars are moving product, some into Mexico, some in other services, so there is a real risk and reward here. Rates on these cars are in the low to mid $500s, but the first generation is heading for requalification and will soon need retrofitting. The future is unclear here. Pressure Tank Cars: There is some strength here, but it is only a matter of time before these rates start to decline as well. Mid $800s-$900s full-service. Aggregate Cars: The commodity market is similar to scrap. New-car pricing does not support investment. This market is crying for the infrastructure bill that never arrived. Limited demand and limited opportunity keep this market close to parity, running older equipment.
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October 2019 // Railway Age 29 3/14/19 4:50 PM
2020 FINANCIAL DESK BOOK DIRECTORY FINANCE COMPANIES
BUNDY GROUP Bundy Group is a boutique investment bank that specializes in representing business owners and management teams in business sales, capital raises and acquisitions. The firm is a senior-driven organization with offices in Charlotte, New York and Virginia. Bundy Group has been a recognized expert in the rail and transportation industry for more than a decade and has numerous successfully closed transactions in the segment. In representing a business and its shareholders in exploring a sale or recapitalization, Bundy Group is focused on managing a structured process and delivering premium value for its clients. For more information about Bundy Group’s work in the rail space, please contact Jim Mullens at jim@bundygroup.com or at 540-342-2151. For more information about Bundy Group visit www.bundygroup.com. CIT RAIL 30 South Wacker Drive, Suite 2900, Chicago, IL 60606; Tel.: 312-906-5701. CIT Rail leverages deep experience and one of the youngest, most diversified railcar and locomotive fleets in the industry. We have a longstanding commitment to providing attractive railcar leasing solutions to rail shippers and carriers. Our solutions free up capital for your growth priorities, increase efficiencies and reduce out-of-service time. Visit citrail.com, call 312-906-570 or follow @CITgroup. PROGRESS RAIL, A CATERPILLAR COMPANY – EQUIPMENT LEASING 15173 North Road, Fenton, MI 48430; (810) 714-4626. Trent E. Marshall, VP Leasing. The largest lessor of maintenance-of-way equipment in North America is a full-service leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 60 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. We develop leasing programs to cut equipment costs and provide leasing structures that are tailored to meet the rail industry’s specific and ever-changing needs. Visit us on the web at www.progressrail.com/leasing. 30 Railway Age // October 2019
ARRANGERS
THE DAVID J. JOSEPH COMPANY 300 Pike Street, Cincinnati, Ohio 45202; Tel.: 513-419-6200; Fax: 513-419-6221; Trey W. Savage, VP Rail Group; Ryan Eckert, General Manager-Rail Equipment Group; Jeff Schmutte, Jeff Blake and Eric Hausfeld, Regional Sales Managers; Dan Dorsey, General Manager-Private Fleet; Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502-2127365). The David J. Joseph Company’s Rail Group provides a broad range of transportation services throughout North America: single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchases and sales of portfolios, and private fleet management. Other services include freight car inspections and engineering services from design of new cars to complete ISL extended life, modifications and analysis; in addition to railcar dismantling for scrapping and parts reclamation. RAILROAD FINANCIAL CORPORATION 676 N. Michigan Avenue, Suite 2800, Chicago, IL 60611; Tel.: 312-222-1383; Fax: 312-2221470; David G. Nahass, President, Email: dnahass@railfin.com; William J. Geiger, Senior Vice President, Email: wgeiger@railfin. com. RFC represents domestic and international clients in the following areas: debt and lease financing of all railcar types including coal cars, tank cars and covered hopper cars for sand and plastics; railcar and locomotive fleet acquisitions and sales; lease brokerage; mergers and acquisitions; equity and debt financing of rail property acquisitions, fleet and lease restructurings and/or refinancing. RFC also provides continuing education for the industry. RR MERGERS & ACQUISITIONS 11 The Pines Court, Suite B, St. Louis, Missouri 63141; Tel: 314 878-1414; Fax: 314-878-1414; Robert Fowler, President, 314 878-1414 x227 Email: robert@rrmergers.com. Jack Sickles, Vice President, 314 878-1414x221 Email: jack@rrmergers.com. RR Mergers & Acquisitions has specialized in the sale of rail-focused companies for more than 15 years. Trusted professionals with long-standing relationships in the rail sector, RR Mergers interfaces with strategic and financial buyers finding the right buyer for a Company, to make the best deal
happen. While maintaining confidentiality at all times, RR Mergers manages the total process of selling railroad industry suppliers, rail services companies and Short Line Railroads. RR Mergers provides advisory services to prepare the company for acquisition, developing a confidential information memorandum, negotiating term sheets, letters of intent and coordinating the due diligence process. STRATEGIC RAIL FINANCE 1700 Sansom St., Suite 500, Philadelphia, PA 19103; (215) 564-3122. Michael Sussman, President and CEO. SRF has served for 23 years as trusted advisor to Class I and short line railroads, rail shippers, public sector agencies, and industrial developers. The firm has brought capital, clarity, and velocity to infrastructure development projects in 45 states and Canadian provinces. SRF integrates capital from public programs and private sources with growth marketing strategies and management consulting to position executives toward short-term objectives and longterm opportunities.
LESSORS
THE ANDERSONS RAIL GROUP 1947 Briarfield Blvd., P.O. Box 119, Maumee, OH 43537; Fax: 419-891-2749. Contacts: Joe McNeely, Rail Group President, 419-8973646; Sean Hankinson, Vice President of Sales, 419-891-6352, Sean_Hankinson@ andersonsinc.com; Sam Anderson, Vice President of Operations, 419-891-4436, Sam_ Anderson@andersonsinc.com. The Andersons Rail Group, a part of The Andersons, Inc., has served the rail industry for more than 30 years. The group owns a fleet of nearly 25,000 railcars which it leases to customers handling a wide variety of commodities. It also provides repair, maintenance and component manufacturing services to private railcar owners through its 26 repair shops and steel fabrication facility. With extensive knowledge in taxation, government regulations and railroad requirements, The Andersons Rail Group offers quality products and superior customer service. For more information, visit www.andersonsrail.com. AMERICAN RAILCAR INDUSTRIES, INC. 100 Clark Street, St. Charles, MO 63301-2075. Tel.: 636.940.6000; Fax: 636.940.6100; Email: railwayage.com
2020 FINANCIAL DESK BOOK DIRECTORY sales@americanrailcar.com; Website: www. americanrailcar.com. Excellence – Accountability – Teamwork • Manufacturing • Railcar Leasing • Railcar Parts • Repair Services Contact us to find out how ARI can be your preferred railcar supplier. ATEL LEASING CORPORATION The Transamerica Pyramid, 600 Montgomery Street, San Francisco, CA 94111; Tel.: 415-616-3486; Ken Fosina, Executive Vice President, Email: kfosina@atel.com. Since 1977, ATEL has leased rail assets to America’s largest railroads and shippers. ATEL specializes in the leasing of all types of rail assets, including railcars, locomotives and maintenance-of-way equipment. ATEL targets railcars and locomotives built prior to 2005, but prefers new maintenance-of-way assets. Leases can be full service, but net leases are preferred. ATEL executes lease transactions directly and through its Capital Markets desk. Each year, ATEL’s Portfolio Management will sell rail assets from one of its Funds managing expiration. CAI RAIL Steuart Tower, One Market Plaza, 9th Floor, San Francisco, CA 94105. Tel: 415-788-0100; Fax: 415-788-3430. James H. Magee, President, email:jmagee@capps. com; Freddy Fernandez, Vice President-Operations, email:ffernandez@capps.com. CAI Rail is an operating lessor in the new and used railcar space. CAI performs full service, net, per diem and finance leases on all railcar types. We have complete maintenance, engineering, operations and field marketing staff. In addition, CAI offers a comprehensive rail car customization and refurbishing program to meet our clients’ specifications. Our parent company, CAI International (NYSE: CAI) specializes in container leasing and sales as well as domestic and international intermodal logistics. So, let’s get moving! CARMATH, INC. 25965 482nd Ave., Brandon, SD 57005; Walker Carmon, Vice President, Tel.: 605-5828340; Email: wcarmon@mwrail.com; John Goodwin, Sales Manager, Tel.: 605-582-8318; Email: jgoodwin@mwrail.com; Website: www.carmathinc.com. At CarMath, we railwayage.com
believe every business should have the opportunity to lease quality railcars at a reasonable price. We have the ability to lease both large and small groups of cars with a wide variety of leasing options and will customize a leasing program to best fit your needs. C.K. INDUSTRIES, INC. P.O. Box 1029, Lake Zurich, IL 60047-1029; Tel: 847-550-1853; Fax: 847-550-1854; email sales@ckrail.net. Brian M. Harris. C.K. INDUSTRIES, a privately held corporation, began its U.S. leasing operations in 1980, and offers its services to shippers, short line, regional and Class I railroads in North America. New investment opportunities up to $10MM of both new and used types of freight cars will be considered. Our existing lease fleet offers a wide variety of car types to meet your lease requirements. We offer mid to long terms, either on a full service or triple net basis. THE DAVID J. JOSEPH COMPANY 300 Pike Street, Cincinnati, Ohio 45202; Tel.: 513-419-6200; Fax: 513-419-6221; Trey W. Savage, VP Rail Group; Ryan Eckert, General Manager-Rail Equipment Group; Jeff Schmutte, Jeff Blake and Eric Hausfeld, Regional Sales Managers; Dan Dorsey, General Manager-Private Fleet; Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502-2127365). 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 evalu-ation, 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. GATX CORPORATION Thomas A. Ellman, President, Rail North America, GATX Corporation, 222 W. Adams Street, Chicago, IL 60606; Tel: 312-621-6200 Fax: 312-621-6546 GATX is a leader in the rail leasing industry with more than a century of experience, preeminent expertise in specialized railcars, and a growing international presence. GATX meets shipper and railroad needs with one of the largest lease fleets of tank
and freight cars and locomotives in the world. We provide our customers with a unique mix of financial (global financing, valuation, structuring, leasebacks, joint ventures, partnerships) and mechanical (regulatory, maintenance, engineering, cleaning, inspection) services in North America. Contact via www. gatx.com or 1-800-428-8161 GREENBRIER LEASING COMPANY One Centerpointe Drive, Suite 400, Lake Oswego, OR 97035; 800-343-7188; Fax: 503-968-4383; Email: Marketing.Info@GBRX. com; Website: www.GBRX.com. Contacts: Larry Stanley, Sr. V.P. Finance; Tom Jackson, V.P., Marketing. GLC provides a full range of operating and financial leases of railroad freight cars to shippers, short line, regional, and Class I railroads. In addition to owning a fleet of nearly 10,000 railcars, we develop financial structures customized to meet a multitude of customer requirements including; full-service, net, and per diem leasing structures, with both shortterm and long-term options, sale-leaseback and like-kind exchanges as well as upgrade and modification programs. Our approach allows customers to meet current needs and position their business to capitalize on future opportunities. The Greenbrier Companies [NYSE: GBX], headquartered in Lake Oswego, Ore., is the leading global integrated supplier of transportation equipment and services to the railroad and marine industries. We build new railroad freight cars in our 10 manufacturing facilities in the U.S., Brazil, Mexico, Poland, Romania and Turkey and marine barges at our Portland, Ore., deep-water site. We are the market leader in the design and production of intermodal, boxcar, gondola, tank car and covered hopper railcars. Our customers include railroads, shippers and leasing companies—partners who depend on us for innovative design, quality production and on-time delivery. In Europe, we build and refurbish railroad freight wagons through our operation in Poland. In Brazil, GBX is the leading manufacturer of railcars for the Latin American market thorough our joint venture called Greenbrier-Maxion. GBX offers full repair and refurbishment services on all railcar types through our 12 strategically located Greenbrier Repair & Services (GRS) locations. GBX also sells reconditioned wheel sets and provides wheel services at 9 locations throughout the U.S. GBX manages GBSummit, a 50/50 joint venture with Sumitomo Corporation of Americas, where we provide finished and machined railcar October 2019 // Railway Age 31
2020 FINANCIAL DESK BOOK DIRECTORY axles. Finally, we perform management services for customers on approximately 368,000 railcars through our Greenbrier Management Services (GMS) group, which provides industry-leading asset management and regulatory compliance through GMS’s new Regulatory Services Group. INFINITY TRANSPORTATION Powered by Global Atlantic. 1355 Peachtree Street, NE, Suite 750, Atlanta, GA 30309; Website: www.infinitygafg.com. Lee Martini, VP Sales & Marketing; Tel.: 678-904-6315; lee.martini@gafg.com; Brian Ottinger, VP Sales & Marketing; Tel.: 312-731-2763; brian.ottinger@gafg.com. Ken Johnson, VP Sales & Marketing; Tel.: 859-640-0362; ken. johnson@gafg.com Infinity Transportation is a private lessor with a fleet of more than 10,000 railcars of varying types. Lease packages are tailored to meet customer needs, including a variety of short-term operating leases and long-term leveraged leases, as well as other assignment and deployment arrangements. Infinity prides itself on exceptional customer service and flexibility with regard to leases and railcar modifications to find the transaction and equipment to best serve our customers. MITSUI RAIL CAPITAL, LLC One South Wacker Drive, Suite 3110, Chicago IL 60606 - Phone: 312-803-8851: Dan Penovich, President; Chris Gerber, Vice President Sales and Marketing. Mitsui Rail Capital is a railcar operating lessor that offers some of the youngest railcars in our industry. From tank cars to covered hoppers to a wide variety of other car types, we deploy assets in every industry, including oil, gas, plastics, agriculture and steel. Our proactive approach enables us to know your unique needs and railcar requirements, getting well-structured deals done, faster. MRC has been in business for 20 years and is a joint venture between Mitsui & Co. Ltd. and JA Mitsui Leasing of Tokyo. PROGRESS RAIL, A CATERPILLAR COMPANY – EQUIPMENT LEASING 15173 North Road, Fenton, MI 48430; (810) 714-4626. Trent E. Marshall, VP Leasing. The largest lessor of maintenance-of-way equipment in North America is a full-service leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 60 years of specialized experience in the railroad 32 Railway Age // October 2019
industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. We develop leasing programs to cut equipment costs and provide leasing structures that are tailored to meet the rail industry’s specific and ever-changing needs. Visit us on the web at www.progressrail.com/leasing. PROGRESS RAIL SERVICES Progress Rail Services, a wholly owned subsidiary of Caterpillar Inc., is a leading supplier of a full range of locomotive, railcar and track products and services. Our service and repair facilities are strategically located around the globe – with a network of more than 130 locations across the United States, Canada, Mexico, Brazil, Italy, Germany, and the United Kingdom – and our mobile crews offer even greater service flexibility. Our extensive inventory of parts and components allows us to reduce down time and return units quickly to service. We also offer recycling and demolition services. Our diversity of products and services means more value for our customers. Through its acquisition of Electro-Motive Diesel, Progress Rail furthers its commitment our customers, providing industry-leading products and services. Founded in 1922, Electro-Motive Diesel is an original equipment manufacturer of diesel-electric locomotives. Contact Progress Rail Services, P.O. Box 1037, Albertville, AL, 35950, (800) 476-8769. www. progressrail.com. RALTRAC, LLC 200 S. Wacker Drive, Suite 3100, Chicago, IL 60606; tel: 312-674-4742; fax: 312-421-2742; www.raltrac.com. RALTRAC (formerly RALCO) is a privately held, Illinois Limited Liability Company in the business of acquiring, managing and leasing railroad rolling stock on net or full services leases. The Company has the intellectual and financial resources necessary to compete in the small cap lease market where its size and structure provide it with a competitive advantage. RALCO also provides consulting and advisory services to its clients. Contact: Peter Urban, Principal, purban@raltrac.com, 847-975-3568 (mobile); Richard Johannes, Principal; Jason Urban, Principal. RELCO LOCOMOTIVES, INC. One Relco Ave, Albia, Iowa 52531. Tel.: 641-9323030; Website:www.relcolocomotives.com.
RELCO, as one of North America’s leading locomotive rebuild, remanufacturing and leasing companies, can provide a full range of locomotive leasing and maintenance services. Since 1961, RELCO has developed a reputation for providing the finest motive power and custom maintenance packages to fit any need: • Full line of both switching and road power available. • Specifications ranging from qualified to completely custom remanufactured. • Aftermarket systems upgrades available, including radio remote controls, microprocessor control systems, fuel management systems, etc. • Nationwide full-maintenance programs available. • Net, full-service, financial and sale/leaseback programs. SMBC RAIL SERVICES LLC 300 South Riverside Plaza, Suite 1925, Chicago, IL 60606; Gene Henneberry, President & CEO (312) 559-4801; Mike McCarthy, Senior Vice President Leasing, (312) 559-4803. SMBC Rail Services is a full-service operating lessor, invested in all tank and freight car types, offering a broad selection of equipment leasing and financing products for the North American rail market. SMBC Rail can structure a solution for all your rail equipment needs, short and long term, full-service or net leases, sale/leaseback, or portfolio acquisition. Contact us via www.smbcrail.com or sales@ smbcrail.com. TEALINC, LTD. 1606 Rosebud Creek Road, Forsyth, MT 59327; Tel.: 406-347-5237; Fax: 406-3475239; www.tealinc.com; Darell J. Luther, CEO, 406-347-5237 darell@tealinc.com; Julie Mink, President, 720-733-9922 julie@ tealinc.com. Tealinc, Ltd. specializes in rail transportation solutions nationally and internationally. We are a rolling stock operating lessor and broker and we also provide marketing, transportation management and consulting services for car owners, shippers and suppliers within the rail industry. Our lease fleet consists of covered hoppers, open top hoppers, mill gondolas, flatcars, gondolas, etc. We have a combined 80 years of service and experience within the rail industry and have assisted both novice and experienced rail shippers best utilize the rail network they participate in. railwayage.com
2020 FINANCIAL DESK BOOK DIRECTORY TRINITY INDUSTRIES LEASING CO. (TILC) 2525 N. Stemmons Freeway, Dallas, TX 75207. www.gotilc.com. 1-800-631-4420. Trinity Industries Leasing Company (TILC), with an owned and managed fleet of approximately 121,000 railcars, is a leading provider of railcar leasing and management services. In addition to being one of North America’s largest rail equipment lessors, TILC also provides our customers access to the comprehensive railcar services available from TrinityRail®. These services include extensive railcar manufacturing capabilities providing a full portfolio of freight and tank cars, railcar maintenance, railcar parts, on-site field service support as well as asset management and advisory services. An overview of TrinityRail and our integrated platform of railcar products of services is available at www.trinityrail.com. VTG RAIL INC. 103 West Vandalia, Suite 200, Edwardsville, IL 62025. Bryan Vaughan, Regional Vice Presi dent Sales, 630-361-6745, Bryan.Vaughan@ vtg.com. Lynn Hayungs, Regional Vice President, Sales, 956-630-2723 ext. 206, Lynn. Hayungs@vtg.com. VTG is a freight and tank railcar lessor offering operating leases and customer structured solutions. VTG also provides fleet management services for its customers and for other private railcar owners and operators. VTG is a customer service oriented leasing company that provides a best in class mix of service, operational and mechanical expertise at competitive lease terms. VTG invests in all freight car types. WELLS FARGO RAIL Wells Fargo Rail, 9377 W. Higgins Road, Suite 600, Rosemont, IL 60018; Telephone: 844-459-9664; Fax: 847-318-7588; Web: www. wellsfargo.com/rail. Email: RailAccountServices@wellsfargo.com. Wells Fargo Rail is the largest, most diverse rail equipment operating lessor in North America. Whatever you’re transporting, we’ve got you covered with more than 175,000 railcars and 1,800 locomotives. Our team of experienced rail industry professionals is ready to listen to your needs and structure creative solutions to add value to your business.
PROFESSIONAL SERVICES
RAILROAD APPRAISAL ASSOCIATES railwayage.com
Division of The Occor Company; Management Consultants providing a variety of consulting services to the railroad and urban transportation industries and the financial institutions and leasing companies that serve them: Railcar and Locomotive Appraisal & Inspection Services for New and Used Equipment, Rail Equipment Portfolio Reviews and Valuation, Market Studies, General Consulting. We have more than 20 years of market experience and data. Patrick J. Mazzanti, President; Ronda Lemons, Assistant. Headquarters: 1914 Springdale Drive, Spring Grove, IL 60081, (815) 675-3300; E-mail: pat@ railroadappraisals.com. RAILSOLUTIONS, INC. 2593 Wexford-Bayne Road, Suite 205, Sewickley, PA 15143; 724-766-6699; Email: rblankemeyer@railsolutionsinc.com; Website: www. railsolutionsinc.com; Robert Blankemeyer, President. RailSolutions provides a broad variety of railroad equipment-related consulting, technical and advisory services to financial institutions, railroads, shippers and fleet owners with a primary focus on equipment valuation and appraisal services. RailSolutions offers two publications on a subscription basis, The Investors’ Guide to Railroad Freight Cars and Locomotives and the RailSolutions Railroad Equipment Historical Database. Our firm draws on more than 45 years of railroad industry experience in railcar and locomotive equipment valuations supported by both a sound base of market data and advanced analytical techniques. RR MERGERS & ACQUISITIONS 11 The Pines Court, Suite B, St. Louis, Missouri 63141; Tel: 314 878-1414; Fax: 314-878-1414; Robert Fowler, President, 314 878-1414 x227 Email: robert@rrmergers.com. Jack Sickles, Vice President, 314 878-1414x221 Email: jack@rrmergers.com. RR Mergers & Acquisitions has specialized in the sale of rail-focused companies for more than 15 years. Trusted professionals with long-standing relationships in the rail sector, RR Mergers interfaces with strategic and financial buyers finding the right buyer for a Company, to make the best deal happen. While maintaining confidentiality at all times, RR Mergers manages the total process of selling railroad industry suppliers, rail services companies and Short Line Railroads. RR Mergers provides advisory
services to prepare the company for acquisition, developing a confidential information memorandum, negotiating term sheets, letters of intent and coordinating the due diligence process. STRATEGIC RAIL FINANCE 1700 Sansom St., Suite 500, Philadelphia, PA 19103; (215)564-3122. Michael Sussman, President and CEO. SRF has served for 23 years as trusted advisor to Class I and short line railroads, rail shippers, public sector agencies, and industrial developers. The firm has brought capital, clarity, and velocity to infrastructure development projects in 38 states and Canadian provinces. SRF integrates capital from public programs and private sources with growth marketing strategies and management consulting to position executives toward shortterm objectives and long-term opportunities.
RAILROAD ACQUISITION SPECIALIST
PROGRESS RAIL EQUIPMENT LEASING 15173 North Road, Fenton, MI 48430; (810) 714-4626. Trent E. Marshall, VP & COO Maintenance of Way. The largest lessor of maintenance of way equipment in North America is a full-service leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 50 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. FCM develops leasing programs to cut equipment costs and provides leasing structures that are tailored to meet the rail industry’s specific and ever-changing needs. Visit us on the web at www.progressrail.com/leasing.
October 2019 // Railway Age 33
BALLAST MAINTENANCE Plasser American METRO 4X4 ZW for transit applications.
BUILDING
BETTER BALLAST Yes, it’s still mostly about drainage. But modern technology has brought a lot of science to tamping, profiling and cleaning. aintenance of the ballast layer directly below and surrounding the ties is imperative to a stable track structure. Ballast degrades over time and becomes increasingly fouled, which reduces its ability to drain; provide adequate loadbearing support; and withstand vertical, lateral and longitudinal forces. This can lead to slow orders and delays, re-routing and, worst-case, derailments. Flooding Impact One of the worst culprits of ballast damage is an uncontrollable one. According to Plasser 34 Railway Age // October 2019
American Vice President Sales and Marketing Ron Olds, rain and inclement weather can wash away the ballast or contaminate it with dirt and mud. If it’s the former, it needs to be replaced. The latter? It needs cleaning. Norfolk Southern (NS) AVP Maintenance of Way and Structures John Fleps told Railway Age that following this year’s heavy spring rain, NS had to virtually rebuild the entire roadbed section over the stretch of a 10-mile area that was heavily affected (in addition to numerous smaller zones within that section). He added that NS had to wash ballast out of the roadbed. “We’d have to bring it back,” he said. “That was done through a multitude of methods,
whether it was GPS trains or conveyor trains that we use to unload material, just off-road dump trucks and bulldozers and excavators and a lot of material—a lot of rip rap and shot rock and ballast all combined together to get the roadbed back.” There was so much rain, in fact, that it made history. “Flooding impacted us this year in a major way,” Fleps added. “From the perspective of subgrade stability, this has been a historic year for our infrastructure. When you look at the prior 12 months—from really any rolling window through the course of 2019 and through most of 2018—it’s the 12 wettest months on record for most of the states in the eastern half of the United States. railwayage.com
William C. Vantuono
M
BY ANDREW CORSELLI, MANAGING EDITOR
BALLAST MAINTENANCE phone was just ringing off the hook,” said Matt Weyand, Ballast Tools Equipment (BTE) Sales Engineer. “People looking for equipment, excavators and ‘What do you have; what can we use?’ We had excavators all over the Midwest, working out with the contractors and railroads trying to get these flooded tracks back into service with cleanup work. It did have a very fruitful effect on our business this year. But, again, that’s not the way that we enjoy getting it.” Della Ehlke, Montana Hydraulics Owner and CFO, said that for her company, the flooding strained the availability of ballast cars and put a spotlight on the importance of in-field maintenance and the repairing of dumping systems to keep cars in service and reduce downtime and inoperability. “The widespread flooding and the duration of time combined with limited resources magnified the need for fast and efficient repair of the limited ballast car fleet,” she said. “In ‘normal’ years, we have reserve equipment, and repairs are still needed, but not nearly as critical as when you are in out-of-service situations. As with any largescale disaster, there were lessons learned and many more yet to be realized. But next time, everyone will be a little better prepared and be quicker to recover applying the knowledge gained from this year’s flooding.”
“That exposed a lot of weaknesses in some of our subgrade. It’s not necessarily the ballast part of the ballast section, more what’s underneath laying in saturated conditions for extended periods of time. We had a lot of embankment failures, a lot of fill failures, washouts, landslides, you name it, all across the network. This required substantial capital investment to restore service. And then we also had the Missouri River experience the worst flooding we’ve had in 20 years. That affected a portion of one district, but it took it out of service for 20 days.” Olds added that Plasser American did not sell any more equipment due to flooding. He said, “It gives the opportunity for the railroads to reconsider the work that’s done, the type of work that they’re doing; it could lead to some potential business.” That wasn’t the case for everyone, though. “It’s not the way that we’d like to have a stellar year, but when the flooding hit, our railwayage.com
Ballast Comeback With nearly 140,000 miles of track and more than 100,000 bridges throughout the U.S. rail network, railroads need the proper equipment to ameliorate any and all damage. Kelley Kneib, spokesperson for Herzog, noted that the company uses four types of equipment for such jobs. • The Automated Conveyor Train℠ (ACT) stockpiles ballast after washouts and uses an automated plow to level out ballast that accumulates in the center of the track. The discharge car unloads ballast in curves up to 13 degrees. • Herzog’s high-speed GPS ballast trains are automated railcars that “efficiently unload ballast to track centers and shoulders using precision GPS technology.” • The CarTopper self-mounts from the ground to the top of railcars to pick up and unload aggregate, ties and OTM (Other Track Material). • The Multi-Purpose Machine® (MPM) is “a versatile machine with an excavator
cab that handles various aggregates, ties, rail and OTM; installs PTC wayside infrastructure; ditches; removes snow; and trims vegetation.” “Our MPMs have been experiencing around-the-clock usage for unloading ballast and rip-rap in the flood-affected areas,” Kneib said. “Work for these operators will soon be transitioning into debris cleanup this fall after months of track bed stabilization. CarTopper operators have also been busy unloading bulky causeway material from railcars for emergency bridge repair and assisting in material resupply.” Herzog has also seen a significant uptick in the leasing of gondolas, side dumps and solar cars to short lines both in the Midwest and beyond. “We recently deployed 30 solar cars down to the east coast of Florida to support storm cleanup from Hurricane Dorian,” said Ryan Crawford, VP of Ballast Operations and Railcar Leasing. Weyand said that BTE uses a BTE-325 Excavator for ballast needs, and “cannot build them fast enough at this point in time.” He noted that it has useful features for railroads and contractors alike. “It’s a big enough machine that we can pick up track panels with it and handle that, but then it also has a zero tail swing on it,” he said. “So the back end of the excavator, when you’re using it, if you’re on a double main or triple main and you’re in the middle, as you swing around, the back end of that excavator does not foul the adjacent track. So in instances where the customer may have to take track protection on both tracks, because a traditional excavator would be fouling a track, this one doesn’t, so they can just take protection on the track they’re working on and continue to move trains on the adjacent track.” Weyand added that, in response to customer inquiries, BTE is currently developing a 330 model of its BTE-325 Excavator. He said the first one will probably be ready next year. “It’s based on a Cat 330 Excavator,” he said. “We’ve got high-rail gear on it. Now it does have the conventional tail, so it is limited. But it has more lift capacity than the 325 and more horsepower—we can run bigger tools on it, we can run bigger undercutters. And we’ve outfitted the rail gear system on a few machines for Union Pacific in that size class.” Knox Kershaw, Inc.’s George Pugh told Railway Track & Structures its new KBR925 October 2019 // Railway Age 35
BALLAST MAINTENANCE ballast regulator, which debuted at Railway Interchange, is a robust machine designed for ballast work on all types of track. Superb visibility, especially in the wing areas, makes it a strong competitor for final profiling. The 925’s plow and wing work together to transfer ballast from shoulder to shoulder in one pass while leaving one shoulder profiled. The insulated broom box has an excellent service life, and the standard reversing valve allows ballast to be swept away from switches and road crossings. Pugh added that the cab tilt feature and clean roof design promote safety and ease of maintenance by providing easy access to major machine components without having to go under or climb on top of the cab. Standard features of the 925 include hydraulically driven AC with pressurizer, joystick controls on a comfortable operator’s seat with easy access to all controls, tinted windows, additional riders’ seating and a six-speed powershift transmission. Pugh said new features for the 2019 KBR925 include a Danfoss Plus One control system, front-mounted Visionaire hydraulically driven AC with high capacity pressurization, and increased fuel and hydraulic fluid capacities. The Plus One controller includes a 12-inch color touch screen monitor to display all machine functions and diagnostics. The controller will aid operators in processes such as joystick functions, transmission shifting, wing deploy/store, and brooming speed control, as well as self-diagnosis of performance issues. Engine diagnostics and on-screen troubleshooting guides will enable operators and mechanics to diagnose problems such as clogged filters, inoperable coils or wiring, and fluid pressure warnings, then quickly resolve them. Loram Rail Solutions told RT&S that it offers the industry’s “most advanced and productive shoulder ballast cleaning services, equipment, and technologies, which result in increased efficiencies and reduced costs. By consistently excavating at levels up to eight inches below the tie and restoring the ballast shoulder structure, obstructing fines can migrate and drain freely to the shoulder with dramatically improved seepage time. Our equipment is specifically designed to break open mud pockets, compacted fines and ballast voids in the cribs and under the ties and release damaging trapped water.” 36 Railway Age // October 2019
Loram told RT&S its Badger Ditcher is “powerful and nimble, as it cleans ditches with high productivity and accessibility to mitigate the most urgent drainage requirements so that damaging water is intercepted and diverted from essential track infrastructure.” Specialty excavating services from Loram’s Railvac equipment “make it easy to maintain tunnels, bridges, switches, and passenger platforms. We provide surgical control for precision removal of ballast without damaging critical (and expensive) components.” Undercutting re-establishes a more permeable ballast profile. Loram told RT&S that its two undercutting models “utilize patented, state-of-the-art undercutting digging wheels that provide self-supporting cut-in capabilities.” GREX (now a division of Loram Rail Solutions) material handling equipment has been utilized for spring flooding in the Midwest, where multiple states were hit especially hard this year, the company told RT&S. GREX and the railroads deployed many DumpTrains, SlotMachines and SPSs (Self-Powered Slots) throughout this region. The ability of these units to deliver the variety of material sizes needed was key to resolving many of the issues in these severe flooding situations. GREX’s DumpTrain for Curves entered into service almost two years ago. This machine has been tremendously popular, and additional units are being added to the fleet to meet the demand. The company also is evaluating additional enhancements to improve this service even further. GREX also told RT&S it has begun offering its newest version of the GateSync/Solaris product. This product update features the same unloading capabilities using wired toggles, wireless remotes, or wholly automated unloading that utilizes a pre-dump survey to unload the train without ever putting a person on the ground. New upgrades on the original solution allow for faster train setup times and longer train consists. GREX also has released the updated HydraDump, and initial installs have begun. This new system offers the same benefits of the original by providing safe and controlled side-dumping with low maintenance costs. One of the highlights of the Railway Interchange outdoor exhibit was Harsco’s TX16 tamper (p. 8), its first new tamper since the 1990s. CN is the first customer; development began three years ago. The resulting
vehicle completely rethinks Harsco’s previous models. The cab is repositioned at the front, while the vehicle deploys fully automated tamping, integrated measurement and hybrid indexing that, in automatic mode, transforms the role of the operator to largely an observer. Four independent tamping units on two traversing frames increase productivity by 50% compared with prior models. The TX16 tamped 33 crossties per minute during trials, and will tamp 30 in service. The large window to the tamping units also offers the operator an unobstructed view of the lifting hooks, tamping unit and track while eight onboard cameras provide a complete view of all vehicle areas. The cab seat rotates 360 degrees. Traction is provided by a 350kW Cummins 9L diesel engine. The TX16 has a top speed of 30 mph, which is aided by single-point noncontact measurements. It also offers continuous rail contact for immediate track lifting. It lacks third-rail lifting, but as it is designed for Class I’s this was not considered necessary during development. The tamping units are adjustable for skewed ties, curves and turnouts. The TX16 is compatible with Harsco’s Callisto track geometry suite developed by its Protran subsidiary, which pre-records track geometry measurements. Currently, this data is retrieved using a hi-rail vehicle and transferred and uploaded from a memory stick. However, Harsco is developing a cloud-based solution that could use cellular data upload. A further optional feature for the vehicle is a drone package that allows the TX16 to act as the lead machine to a drone chase tamper. Trials of the vehicle have taken place on a 10-mile stretch of Norfolk Southern main line in South Carolina, and following Railway Interchange, it was transported to Winnipeg for one month of trials with CN. During the winter, the TX16 will return south for further tests in Memphis ahead of deployment next summer for one year of in-service tests. The railroads love—and, of course, need—these machines, too. Fleps said that NS—which performs 100% of its surfacing in-house—contracts its ballast-unloading services. “The work is done with GPS trains; that’s pretty much what all the Class I’s do,” he said. “And then when it comes to maintaining the ballast, we have a combination of our own equipment, which we operate. And then we use some contracted services to supplement that, but it’s primarily an NS operation.” railwayage.com
BALLAST MAINTENANCE Ballast to the Future Ron Olds feels that the need for “faster, quicker, more-efficient equipment is going to be in larger demand. Track time is going to be at a premium, and customers are going to need shortere work windows.” One way to do that is via track undercutting. Undercutting—excavating the material beneath the ties—is pivotal to restoring the desired ballast properties after they become warped. The excavated material can then be fully wasted or screened and returned to the track with only the fines being discarded. “Track undercutting is, of course, extremely critical to maintaining good-quality track,” Olds noted. “It’s in demand if areas of track have ballast-mud-type issues; it’s a way to go in there and correct the problems so that it eliminates the need to come back and patch the track up. Clean rock, clean ballast holds the track and keeps the quality much longer than simply tamping it.” Weyand concurs. “Now that the waters are receding, I’m looking at 2020,” he said. “We’re looking at having an increase in the
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undercutting that will be done probably across the system, just because of what has been deposited in the tracks. When you put corn stocks and refrigerators and automobiles and God knows what and all the stuff that comes out of them into the track, the only way you’re going to get it out is going to be through undercutting. So, crystal ball for next year, we’ll probably see an uptick in undercutting needs. That’s why we’re gearing up and stocking undercutters, getting ready.” Ehlke noted that Montana Hydraulics anticipates “high demand and expectations of our in-field on-site repair technicians, as time is money. We can have a ballast car back up and running in 24 hours if it is a major repair or a matter of minutes for minor issues.” Fleps said that there are several different measures with regard to ballast work. One of NS’s “principal technologies” over the past year is LIDAR (Light Detection and Ranging) to survey the ballast section ahead of unloading new ballast for program work. What LIDAR does, he said, is map out what the 3D cross-section of the existing roadbed looks
like, then calculates exactly how much new ballast is needed to achieve the required raise. “What we’ve learned through that process is that, over the course of time, we’ve unloaded a lot more ballast than we actually needed,” he said. “So we have a lot of excess capacity out there. It’s helped us drive where we unload material, how much we unload, and we’re taking advantage of an asset that’s already out there. That serves a two-fold purpose: Not only is the ballast there that we need to raise the track, but it also removes excess material that’s trapping moisture inside the roadbeds.” Fleps also noted that the advent of Precision Scheduled Railroading (PSR) has done more good than harm for NS. “It’s been good for us, because when trains are running on time we can plan our work efficiently, and we can count on the window that is scheduled for our big program gangs,” he said. “We’ve really seen an improvement in our productivity this year thanks to it.” IRJ Managing Editor Kevin Smith and RT&S Managing Editor David Lester contributed to this story.
October 2019 // Railway Age 37
TTCI R & D
It’s What’s Inside That Matters
Detecting railway wheel subsurface fatigue cracks with ACWD equipment.
T
he tread of a loaded railway wheel experiences wear and tear, especially in heavyhaul freight operations. Wear often defines the ultimate useful life of wheels, but degradation can develop that leads to early removal. A wheel impact load detector (WILD) system is designed to find out-of-round wheels or wheels with surface damage, but WILD does not effectively identify wheels with damage contained within the wheel tread; i.e., subsurface fatigue cracks.
38 Railway Age // October 2019
Initially, subsurface fatigue cracks cause no damage to the surface of the wheel, and also form without causing an out-of-round condition. One or more subsurface fatigue cracks can grow or join together. Realtime automated detection of subsurface wheel cracks on moving trains is a current research objective for Transportation Technology Center, Inc. (TTCI). Safely detecting internal defects on wheels without interrupting service is the goal of using automated cracked wheel detector (ACWD) systems. TTCI has been evaluating one such system based on ultrasonic inspection technology. The current ACWD system designed and installed at TTCI’s Facility for Accelerated Testing (FAST) is a wayside non-destructive testing (NDT) system based on ultrasonics for inspecting railway wheels on moving trains. Currently, the system is designed to
inspect the wheel tread for surface damage and internal cracks with the operational speed capability of 15 mph. The train at FAST is a captive heavy-axle-load test train (114 cars, 39-ton axle loads) that operates on FAST’s High Tonnage Loop (HTL). The ACWD system has demonstrated the ability to find previously unknown wheel cracks in the FAST train. The installation at FAST is located such that the train can be scheduled to pass over it at the end of a nightly run. During bi-weekly inspections, multiple cracked wheels have been identified over several years. Wheels with vertical split rims (VSRs), shattered rim cracks (SRCs) and broken rims have all been identified. Wheels of particular interest had subsurface fatigue cracks forming within the tread, but externally appeared defect-free. As confirmed by hand-held testing, these cracks often originate near railwayage.com
William C. Vantuono
By Matthew Witte, Ph.D, Scientist, Transportation Technology Center, Inc.
TTCI R & D
ACWD system ultrasonic result output for a wheel. Each box with numbers represents a single channel ultrasonic probe whose results are stitched together to provide information for a whole wheel pie. Also shown is a cutout view of a wheel slice showing subsurface fatigue cracking below the tread.
the rim face and just below the surface. Such cracks often initiate at multiple locations around the wheel. Most often, the cracks grow and join horizontally. Cracks growing outward toward the rim can lead to a shattered rim. If the cracks join and grow vertically, a VSR can occur. Monitoring of defects over time provides insight into crack growth rate and
detectable defect size. The crack growth has been observed to be slow. Under careful monitoring, one test wheel that showed no outward signs of cracking was allowed to run nearly 12 months before removal. During that time, the cracks grew circumferentially until they were nearly all the way around the wheel within the tread. The illustration shows typical ACWD system ultrasonic result output and a cut
section of this wheel. The increased level of information available from ACWD systems advances our understanding of wheel degradation and our capability to detect and service wheels under a planned program of maintenance. When coupled with predictive analytics, ultrasonic testing defect information from the ACWD system is a valuable future resource for the industry.
BI DIRECTIONAL BALLAST PLOW • • • • •
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Made in Montana, USA | www.montanahydraulics.com | dehlke@mthyd.com | 406-449-3464 xt 1005 MontanaHydraulics_Final2.indd 1 railwayage.com
October 2019 // 10/1/19 Railway10:17 AgeAM 39
TRANSIT-ORIENTED DEVELOPMENT
By Evan Wilbert, Stantec
Photo Credit Goes Here
TOD
Philadelphia Style
Philadelphia is a highly walkable city, with mixed housing and good public transit access. 40 Railway Age // October 2019
railwayage.com
TRANSIT-ORIENTED DEVELOPMENT What’s happening in the City of Brotherly Love, one of America’s oldest and most storied cities?
I
n the fifth installment of our ongoing series on transit-oriented development (TOD), we’ve focused on Philadelphia. Our previous articles looked at how New York got TOD right, how California is doing something different in TOD, the key role P3s can play in booming Toronto and effectively leveraging rail infrastructure in Chicago. Since its conception in the early 1980s, TOD has taken hold from coast to coast, with recent high-profile projects like Hudson Yards and One Vanderbilt in New York City. On the West Coast, the Bay Area is investing billions of dollars in TOD. So, what’s happening in the City of Brotherly Love, one of America’s oldest and most storied cities? It’s important to take a step back and look at the founding of this city, when William Penn laid out the original streets, avenues, blocks and parks. At the time, transportation was dependent on horse and carriage. While not all of Philadelphia’s streets still conform to such widths, many still do, and have the cobblestone paving to show for it. And the unique grid layout makes navigating the city center easy and logical, once you remember how the streets named after trees are ordered (from South to North: Pine, Spruce, Locust, Walnut, and Chestnut). Because Philadelphia’s road network was laid in place prior to the advent of automobiles, it has a substantially different character from other cities developed with a car-first approach. Cities like Austin or Atlanta have walkable neighborhoods, but to move from one neighborhood to the next usually means getting behind the wheel. Philadelphia, on the other hand, is a highly walkable city. Its compact size, coupled with an established public subway, railwayage.com
streetcar and bus network that connects to the regional rail lines (all managed by the Southeastern Pennsylvania Transportation Authority, affectionately known as “SEPTA”), can lead one to argue that all projects are essentially transit-oriented. But the wheels have been turning in recent years to put forth a greater emphasis on projects that increase access to mixed housing and decrease reliance on automobiles for getting around. Philadelphia’s unique reality is illustrated by the District Standard, Philadelphia’s own unit of horizontal distance. Philadelphia’s City Plan used the standard for the groundwork of the city layout that mainly persists today, while the City of Philadelphia Streets Department manages the plan in its ongoing effort to maintain the character of the city, while developing for the future. A Deeper Dive Into TOD We’ve recently seen a desire to promote a denser form of redevelopment at existing transportation hubs. One goal is to center new development around areas that had not seen redevelopment, despite proximity to key transportation areas, and to pull this development in a direction that serves a more varied population. The end result was a new TOD overlay that promised bonuses to developers when building within its footprint. To streamline the process and make the bonuses more impactful, the city’s zoning code was updated in 2012 to revise the TOD overlay, granting developments in certain zoning districts benefits, such as a 50% increase in dwelling unit counts, adding an extra seven feet in height, a 30% higher floor-area ratio, a minimum building height of 25 feet or a reduction in parking requirements. The policy trade-off includes restrictions around street-level uses in TOD zones. For example, retail shops and public spaces are encouraged, while non-accessory parking, storage or other functions that detract from the pedestrian environment are not permitted by right. But from the onset, the challenge became convincing the city council to designate a site as a TOD development area. In the four years since the amendment, only four districts were listed in the
zoning section of the Philadelphia Code. This could potentially be due to inherent risks in the process, like the fact that TOD designation covers an area, rather than just a singular site. A developer thinking strategically would first want to assemble a large property holding in the area, or risk potentially being priced out of buying other properties surrounding the original development. Once an area is designated as TOD, the benefits it provides would increase the attraction to develop the land and therefore the property value. In 2017, the Philadelphia city council simplified the process, increasing bonuses to developers and landowners and defining a zone as 500 feet from the entrance of a transit station. One year later, a bill was passed to offer TOD incentives at four stops along the Market-Frankford Line, areas that notably lacked access to affordable housing. This creates the opportunity to use TOD designations to direct development to meet the needs of the city. By introducing equal opportunity housing, coupled with active
This street harkens back to the days of horse and carriage transportation. October 2019 // Railway Age 41
TRANSIT-ORIENTED DEVELOPMENT street frontages and density bonuses, transit stations can be become new neighborhood nexuses. Vision Zero Philadelphia Outside of specific land development projects offering transit improvements, Philadelphia has also adopted a program called Vision Zero. These projects, mainly within the public street network, look to increase the safety for non-automobile transportation through the use of raised intersections, bumpouts, protected bike lanes and other improvements. Pedestrian and road safety have been at the heart of public discussions in numerous cities around North America, and Philadelphia is no different. According to the pedestrian safety group Vision Zero Philadelphia, 50% of traffic deaths and severe injuries occurred on just 12% of Philadelphia streets. These safety improvements for pedestrians and cyclists can only work to improve the network of short trips required to access the established public
Smaller transit-oriented development projects continue to compress the already-dense street network of greater Philadelphia. transportation network. At Stantec, we have been involved in pedestrian safety and complete streets improvements that would emphasize
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the desire to improve the walkability of the city to fill the areas between major transit. Working with Drexel University, we are designing a mid-block crossing to connect its Quad with retail on the opposite side of Chestnut Street. Through the introduction of a raised tabletop crossing, the project looks to increase the safety of pedestrian crossings and create a legal path for the jaywalking that is occurring on a daily basis. We have provided similar crossings for the University of Pennsylvania at Shoemaker Green and for Pennsylvania Hospital on its Center City campus. While not directly tied to a new development or part of a large sweeping project, these smaller projects continue to compress the street network of Philadelphia. This serves the ideals of TOD by making the move from leaving your house on foot, transferring to public transportation and moving throughout the city more easily and conveniently. These projects also create connections
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TRANSIT-ORIENTED DEVELOPMENT to businesses and points of interest, decreasing the walking distance from where someone wants to be and how they’re going to get there. What’s On the Horizon Amtrak has been rallying for upgrades to its iconic 30th Street Station that will see the creation of a transit gateway to Schuylkill Yards and other planned developments in the area, in what some are calling similar to Hudson Yards in New York City. This planned development could introduce a hub of new development immediately adjacent to a nexus of almost all major transportation. The 30th Street Station complex not only houses Amtrak but also SEPTA Regional Rail, access to streetcars and the Market-Frankford Line, and regional bus lines. This development has the ability to establish a model for mixed-use, planned development centered around rail transportation. To improve on existing TOD,
Philadelphia needs to continue to bolster opportunities for alternative transportation by increasing the walkability and bike-ability of the city, implementing more pedestrian safety improvements, and bringing more complete street ideals into the fabric of the city. Reducing parking count requirements, creating incentives for commuting by public transportation and increasing requirements for bike parking at new developments are all vital to success. This continued emphasis and adjustment in direction would secure Philadelphia as a city navigated by bike and pedestrians in between longer trips on public transportation. Further, a push toward limiting the emphasis on cars is incredibly important to continue the growth of the city as a hub for TOD. Evan Wilbert is a Civil Engineer and Senior Associate with Stantec. He works with private development, higher education and not-for-profit clients throughout the Philadelphia region on projects
ranging from small developments and park revitalizations to large campus mapping efforts and place-making opportunities. Wilbert regularly works to improve the surrounding street network for all forms of transportation. He does not own a car, has two bikes and is the owner of a well-worn SEPTA Key Card.
Evan Wilbert, Stantec
RENTAL SYSTEMS, INC.
40+ YEARS OF QUALITY RENTAL TRUCKS AND EQUIPMENT PHILADELPHIA 800.969.6200 DENVER 800.713.2677 DANELLA.COM/RENTALS railwayage.com
October 2019 // Railway Age 43
People / 100 years / Events October 14-16, 2019
CLAUDE MONGEAU
UNIVERSITY OF WISCONSINMADISON Fundamentals of Railroad Bridge Inspection
High profile: Former CN President and CEO Claude Mongeau
Madison, Wisc. dmpeter5@wisc.edu. https://epd.wisc.edu.
Norfolk Southern
has been elected a director of Norfolk Southern Corp. Mongeau, 57, has been appointed to the Compensation Committee and the Finance and Risk Management Committee of the Norfolk Southern board and will serve as an independent director. Mongeau “brings extensive freight transportation industry experience to Norfolk Southern’s board,” NS said. “As CN CEO, he successfully executed a customercentric version of Precision Scheduled Railroading. Under his leadership, CN enhanced operating efficiencies while improving service through engagement, communication and collaboration with customers,” following the late E. Hunter Harrison’s retirement. “We are excited and pleased to welcome Claude to the Norfolk Southern board,” NS Chairman, President and CEO Jim Squires said. “Claude’s deep knowledge and understanding of PSR will be invaluable as we implement our PSR-based strategic plan.”
T
he Greenbrier Companies (GBRX) promoted Lorie Tekorius from Executive Vice President and Chief Operating Officer to President and COO, with expanded responsibilities. Tekorius will lead GBRX’s strategic planning; its wheels, repair and parts business unit; and its accounting, finance, human resources and global corporate health, safety and security functions, continuing to report to William A. Furman, Chairman and CEO. As President, Tekorius also assumes additional management responsibilities at the direction of the CEO. She continues as chair of GBRX’s executive management committee, composed of its senior management team. Furman will retain oversight of the Commercial, Manufacturing and International business units, along with the corporate legal, communications and public affairs functions. L.B. Foster made changes to its global Rail team. Greg Lippard is now Vice President Rail. Peter Jones promoted to Vice President, Global Technology and Managing Director, Europe. Steve Fletcher
promoted to Vice President Global Friction Management. Jason Bowlin promoted to Vice President Rail Products. Patrick Tully promoted to Senior Director, Rail Sales. Sid Shue, Director Rail, assumes responsibility for the Pueblo, Colo., plant and ARP production. Craig Davis, GM Rail Distribution, assumes responsibility for Columbia City, Ind., operations. Sarah McBrayer promoted to Assistant General Manager Transit Products. Jen Rohr promoted to Director, Technical Sales. Rich Burnside, Director Supply Chain, assumes indirect purchasing for L.B. Foster. He will retain operational responsibilities of Salient Systems and Friction Management products manufacturing. Trinity Industries, Inc. President and CEO Timothy R. Wallace announced his retirement. Wallace has agreed to continue in his current roles “for as long as necessary to facilitate a smooth transition.” Wallace, who joined Trinity in 1975, became President and CEO in 1999, and served as Chairman from March 1999 to March 2019.
100 years ago in railway age OCTOBER 1919 The Questions In Dispute During the war, the British government found it necessary, in order to meet the increased cost of living, to advance the wages of the railway men. This was done on a sliding scale, and the pre-war wage was still maintained as a base. The increase made applied to every railway man in the country, and at the beginning of the year it amounted to 33 shillings ($7.92) per week per man, which was to be added to the regular pre-war rate of pay. 44 Railway Age // October 2019
October 17-18, 2019
next-gen train control 2019, PRESENTED BY RAILWAY AGE and parsons Philadelphia https://www.railwayage.com/ nextgen/
OCTOBER 22-23, 2019 21st Railroad Environmental Conference
University of Illinois at Urbana-Champaign rrec-conf@illinois.edu. https://rrec.railtec.illinois.edu/
NOVEMbER 12-13, 2019
UNIVERSITY OF WISCONSINMADISON Highway-Rail Grade Crossing Safety Des Plaines, Ill. dmpeter5@wisc.edu. https://epd.wisc.edu.
DECEMbER 11-12, 2019
Big Data in Railroad Maintenance Planning Conference University of Delaware Newark Campus klakofsk@udel.edu. https://outreach.engr.udel.edu/ professional-development/ conferences/ big-data-in-railroad-maintenanceplanning/
January 23-24, 2020
Southwestern Rail Conference
Magnolia Hotel – Park Cities/SMU, Dallas aylor@texasrailadvocates.org. http://texasrailadvocates. org/2020-southwestern-railconference/
railwayage.com
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TekTracking TIMPS Maintenance Optimization Application TekTracking has launched its Track Inspection, Maintenance, Planning and Scheduling (TIMPS) mobile application. TIMPS is a mobile application developed to help effectively manage and prioritize system-wide track inspection and maintenance tasks. Track departments can now use TIMPS to ensure that manual inspection of all track assets occurs per the frequency prescribed by the railroad and FRA Part 213 requirements. TIMPS optimizes the inspection process by providing all stakeholders with real- time inspection information. It provides a digitized version of all pertinent inspection information, including: work plan, forms, historical defects, new defect reporting and estimated inspection time based upon asset type. The TekTracking team has worked closely with railroads while developing TIMPS in order to ensure that the app has all essential features for efficient track maintenance and inspection. TIMPS is the first in a series of mobile applications that TekTracking will release in the coming
months to support asset life cycle management and state-of-good-repair. TekTracking CEO Gregory Fogarty commented, “This rollout demonstrates our continued commitment to delivering quality products that support Linear Asset Management Platform (LAMP). Our platform will allow railroads to have real-time visibility of asset health and state-of-good-repair across all disciplines, and facilitate constructive dialog.” TekTracking is an Asset Management Technology Provider servicing passenger and freight rail operators throughout North America. The company’s products and solutions address asset management issues universally faced by railway operators. Through strategic relationships with “Best-in-Class” technology providers, TekTracking has assembled a comprehensive solution set to meaningfully reduce railroad operating costs. Additionally, the company offers railroad technology OEMs expert product ideation and development services and North American market development services. www.tektracking.com.
Sherwin-Williams CarClad™ Macropoxy® HS Sherwin-Williams Protective & Marine Coatings CarClad Macropoxy HS 4200 extended weathering epoxy delivers the same longterm corrosion protection and abrasion resistance as its predecessor, and now solves a long-standing aesthetic problem related to epoxies and UV exposure. While maintaining effective corrosion protection, exterior epoxy coatings tend to change color as they chalk after a year or two in sunlight. For example, black
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HEMPEL’S Hempatop Direct 460, a high-performance, one-coat application with quick-to-dry properties, has been developed to provide superior protection against corrosion. The onecoat Direct-to-Metal (DTM) application resists railcar color and gloss-fading problems, while delivering customers decreased maintenance costs and increased productivity rates. Approximately 1.6 million railcar assets travel across North America every year. High railcar traffic bundled with rising corrosion rates is costly. This makes coating protection products such as Hempatop Direct 460 more valuable than ever. Hempatop Direct 460 supersedes Hempel’s workhorse DTM epoxy, Hempadur Mastic 45883, and is ideal for interior use on boxcars and exterior use on all railcar types. The new one-coat solution is easy to apply, and the resilient high-gloss finish lasts longer. Hempatop Direct 460 provides excellent UV resistance and enhanced gloss and color retention, and chalks to the original color, unlike other traditional epoxies. Dry to the touch in just three hours, Hempatop Direct 460 is available to the U.S. market now to help the rail industry fight corrosion and boost economic productivity. For more than 30 years, Hempel’s interior linings and exterior coatings have been applied to a wide variety of railcars including tank cars, hopper cars, gondolas, grain cars and boxcars. www.north-america.hempel.com.
coatings turn to gray. The new CarClad Macropoxy HS 4200 epoxy solves this problem by chalking black, instead of gray, so black railcars will retain their color and aesthetics much better over their full maintenance interval. Railcar owners and lessors will no longer have to recoat tank railcars before the coating’s corrosion-resistant properties have reached the end of their useful service life. https://protective.sherwin-williams.com/industries/rail.
October 2019 // Railway Age 45
equipment Sale/Leasing
PROFESSIONAL DIRECTORY
Senior Level Marketing and Sales Vermont Rail System, a long-established and growing Northeast Short Line Rail Carrier, is accepting applications for a full time Senior Level Marketing and Sales position at its Burlington, VT headquarters. This position will be responsible for all Marketing and Sales activity across our network. Candidate must have experience in railroad marketing and sales, with knowledge of rail equipment, commodities, and pricing. Transportation strategy and logistics experience a must. Candidate must be a Team player with proven leadership and management skills to both lead and grow the Marketing Team, as well as interact with all levels of the organization. Must be a creative and flexible problem solver. Travel mostly in the Northeast a must. VRS offers competitive pay and benefits. VRS is an equal opportunity employer. Send resume and salary requirements to marketing@vrs.us.com. Contact: marketing@vrs.us.com
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legal notice
Legal Notice The Connecticut Department of Transportation will be conducting its annual prequalification of professional consultant firms who desire to provide services for the 2020 calendar year. Additional information can be obtained at: www.ct.gov/dot/business/consultant/selection Submittals must be hand delivered by 3:00 pm on Friday, November 15, 2019 or postmarked by this date and received by November 20th. No submittals will be accepted after these dates. Connecticut Department of Transportation
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An EO/AA/ADA Employer 46 Railway Age // October 2019
railwayage.com RTS_RailBriefAd_QuarterPage_Final_2019.indd 1
3/1/19 4:05 PM
Ad Index Company
Phone #
anderson group the
419-891-6386
cit
212-461-5781
Fax #
212-461-5632
URL/Email Address
Page #
RailSales@andersonsinc.com
24
James.Spencer@cit.com
22 12
cummins Danella Rental Systems, Inc.
561-743-7373
561-743-1973
SBolte@danella.com
43
Greenbrier Companies The
800-343-7188
503-684-7553
gbrx.info@gbrx.com
C4
Herzog Railroad Services Inc
816-385-8233
jhansen@herzog.com
37
678-904-6300
infinitygafg,com
27
infinity transportation
763-478-6014
763-478-2221
sales@loram.com
3
montana hydraulics llc
406-449-3464
406-449-3465
dehlke@mthyd.com
39
next-gen train control
212-620-7205
212-633-1165
conferences@sbpub.com
9
Pandrol USA, L.P.
800-221-CLIP
856-467-2994
Plasser American Corp
757-543-3526
757-494-7186
plasseramerican@plausa.com
C2
Rail Solutions, Inc.
757-903-4606
757-903-4705
jhusband@railsolutionsinc.com
26
RAILQUIP INC
770-458-4157
770-458-5365
sales@railquip.com
21
Railway Equipment Co
763-972-2200
763-972-2900
sales@rwy.com
7
railway educational bureau
402-346-4300
402-346-1783
bbrundige@sb-reb.com
28,42,C3
SMBC Rail Services LLC
312-559-4800
888-RAILCAR
sales@smbcrail.com
29
trinity rail
800-631-4420
trinityrail.com
19
vtg rail
480-248-2457
Henry.Novell@VTG.com
20
Loram Maintenance of Way, Inc
888-379-2347
15
The Advertisers Index is an editorial feature maintained for the convenience of readers. It is not part of the advertiser contract and Railway Age assumes no responsibility for the correctness.
Advertising Sales MAIN OFFICE Jonathan Chalon Publisher 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, KY, Jon Chalon 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, Canada – Quebec and East, Ontario Jerome Marullo 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com
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AR, AK, AZ, CA, CO, IA, ID, IL, In, KS, LA, MI, MN, MO, MS, MT, NE, NM, ND, NV, OK, OR, SD, TN, TX, UT, WA, WI, WY, Canada – AB, BC, MB, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com The Netherlands, Britain, France, Belgium, Portugal, Switzerland, North Germany, Middle East, South America, Africa (not South), Far East (Excluding Korea /China/India), All Others, Tenders Louise Cooper International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185 lc@railjournal.co.uk
Scandinavia, Spain, Southern Germany, Austria, Korea, China, India, Australia, New Zealand, South Africa, Russia, Eastern Europe Baltic States, Recruitment Advertising Michael Boyle International Area Sales Manager Nils Michael Boyle Dorfstrasse 70, 6393 St. Ulrich, Austria. +011436767089872 mboyle@railjournal.com Italy, Italian-speaking Switzerland Dr. Fabio Potesta Media Point & Communications SRL Corte Lambruschini Corso Buenos Aires 8 V Piano, Genoa, Italy 16129 +39-10-570-4948 Fax: +39-10-553-0088 info@mediapointsrl.it
Japan Katsuhiro Ishii Ace Media Service, Inc. 12-6 4-Chome, Nishiiko, Adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Jennifer Izzo 800 Connecticut Avenue, Norwalk, CT 06854 203-604-1744 Fax: 203-857-0296 jizzo@mediapeople.com
AILWAY GE October 2019 // Railway Age 47
Perspective: ASLRRA
61 + 272 = 45G, So Far
5
9, 61 and 272 are three recordbreaking numbers that make me very optimistic about the future. The Baltimore Ravens scored a franchise-high 59 points in their demolishing of the Miami Dolphins in the opening week of the NFL season. As an unabashed (some might say excessively fanatical) Ravens fan, that says to me the team is a real contender this year. In the U.S. Senate, the short line rehabilitation tax credit legislation (S. 203) reached 61 co-sponsors. This is the highest number of Senate co-sponsors ever secured for a stand-alone short line tax credit bill, and more significant, is the number needed to break a filibuster in the Senate, which makes this symbolically if not functionally crucial. In the U.S. House, the legislation (H.R. 510) now has 272 co-sponsors, the highest number the short line tax credit legislation has ever achieved in that body. Both bills would make the 45G credit permanent. In football, winning is a team effort. Likewise, these milestone legislative numbers are the result of the entire short line industry’s collective dedication to extending the credit. Since January, hundreds of short lines, their suppliers and customers have participated in 15 Washington fly-ins to meet with their respective Representatives and Senators and promote the economic and safety benefits of the credit. During our most recent fly-in on Sept. 9 and 10, we honored SMART TD (formerly UTU) representative John Risch for his long-time effort on behalf of this legislation. John retired at the end of September, and his
H.R. 510 co-sponsors now
number
272
48 Railway Age // October 2019
support on behalf of rail labor has been an important part of our success by emphasizing the safety and job creation benefits of the credit. Short line railroads and suppliers (thanks REMSA, NRC, and GoRail for the partnerships!) have also hosted dozens of local facility tours over the past few years to show Congressmen first-hand the important rehabilitation work facilitated by the tax credit, and to highlight the significant transportation benefits our shippers receive as a result. The story here is not just in the top line numbers, but in the details. Our geographic reach is extensive. Forty-seven of the 50 states have co-sponsors of the legislation. In 12 states, 100% of the Congressional delegation is on the bill, and in 22 states, more than 75% of the delegation is on. Perhaps most significant in this era of partisan gridlock, the co-sponsors of both bills are almost evenly split between Democrats and Republicans. There are vanishingly few bills in Congress that enjoy this level of bi-partisan support. 100, 93, 10.5: At the same time short lines have utilized the tax credit to maximize investment in track rehabilitation, an increasing number of short lines are taking advantage of three federal grant programs that include rail eligibility. In the most recent grant awards under the Consolidated Rail Infrastructure and Safety Improvement Program (CRISI), short line projects won more than $100 million, or nearly one-third of the total allocation. Likewise, public partners with short line projects received $93 million in the most recent BUILD (formerly TIGER) grants and $10.5 million under the Infrastructure for Rebuilding America program (INFRA). The BUILD program has the largest appropriation, and the Administration has put a much greater emphasis on rural projects that provide the many short lines operating in those areas an excellent opportunity to compete for funding. By way of comparison, in the last year of the Obama Administration, TIGER grants were 79% urban and 21% rural. In 2018 those numbers were almost reversed. Going forward, Congress has now mandated a 50/50 split between
the build grant program has the largest appropriation available.” urban and rural BUILD grants, which still provides significant opportunity for short line railroad participation. ASLRRA has a wealth of expertise concerning program eligibility, the application timetable and process, and the best ways to meet the substantive requirements of each of these programs. I encourage every short line to draw on that expertise as these funding opportunities arise. You can do so by accessing our website at www.aslrra.org, by attending our regional meetings, or by just calling us and asking for help. Rest assured that we’ll also be out there advocating for continued robust funding of these programs. I love my Baltimore Ravens, and their record-breaking 59-point total gives me hope that they can compete for (another) Super Bowl. I am equally impressed by the point totals of the short line industry, and am even more hopeful that our season will end with a big win that maximizes the industry’s ability to invest in this critical segment of the nation’s transportation infrastructure. Editorial note: Co-sponsor numbers for H.R. 510 and S. 203 were correct as of press time.
Chuck Baker President ASLRRA
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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 7-31-19. 216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment Updated 7-31-19. 217 Railroad Operating Rules Updated 7-31-19. 218 Railroad Operating Practices - Blue Flag Rule Updated 7-31-19. 221 Rear End Marking Device-passenger, commuter/freight trains Updated 7-31-19. 223 Safety Glazing Standards Updated 7-31-19. 225 Railroad Accidents/Incidents Updated 7-31-19. 229 Locomotive Safety Standards Updated 7-31-19. 231 Safety Appliance Standards Updated 7-31-19. 232 Brake System Safety Standards Updated 7-31-19.
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209 211 BKTSSAF 213 BKTSSG 213 BKWRK 214 BKFSS 215 BKROR 217 218 BKRRC 220 BKEND 221 BKSEP
Update effective
7-31-19 7-20-09 7-31-19 4-3-17 7-31-19 7-31-19 7-31-19 7-31-19 7-31-19 7-31-19
BKHORN 222 7-31-19 BKRFRS 224 7-31-19 BKHS BKLSS BKSLI BKSAS BKBRIDGE BKLER
228 229 230 231 237 240
RR Safety Enforcement Procedures & Rules of Practice Track Safety Standards (Subpart A-F) Track Safety Standards (Subpart G) RR Workplace Safety RR Freight Car Safety Standards RR Operating Rules and Practices RR Communications Rear End Marking Device, Passenger, Commuter & Freight Trains Use of Locomotive Horns Reflectorization of Rail Freight Rolling Stock Hours of Service Locomotive Safety Standards Steam Locomotive Inspection RR Safety Appliance Standards Bridge Safety Standards Qualification and Certification of Locomotive Conductor Certification
FRA Part #
BKSTC
BKPSS
40 219
233 234 235 236 238 239
30.50
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10.95 10.00 10.50 8.50 10.50
9.86 9.00 9.45 7.65 9.45
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12.50
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BKCAD
Each
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Combined FRA Regulations
Compliance Manuals BKINFRA18 BKTM
Track and Rail and Infrastructure Integrity Compliance Manual - Volume II, Track Safety Standards - Part 213 Technical Manual for Signal and Train Control Rules. - Includes Part 233, 234, 235, 236
38.00 49.95
Updates from the Federal Register may be supplied in supplement form.
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There are no new proposals or final rules to report for this issue. Be sure to check back next month to see if there are any changes to FRA regulations.
Part 233, 234, 235, 236–Rules & Regulations Governing Railroad Signal and Train Control Systems 49 CFR 233, 234, 235, and 236. Requirements for signal system reporting; maintenance standards; grade crossing signal system safety. Includes material modification of a signal system or relief from requirements plus instructions, standards, and rules governing the installation, inspection, maintenance, and repair of signal and train control systems. Spiral-bound. Softcover, 225 pages.Updated 7-31-19.
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Part 240–Qualification and Certification of Locomotive Engineers This rule clarifies the decertification process; when certified locomotive engineers are required to operate service vehicles; and address the concern that some designated supervisors of locomotive engineers are insufficiently qualified to properly supervise, train, or test locomotive engineers. 162 pages. Spiral bound. Updated 7-31-19.
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*Prices subject to change. Revision dates subject to change in accordance with laws published by the FRA. 10/19
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