Railway Age October 2021 by Railway Age

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DRAMATIC CONCLUSION Canadian Pacific Kansas City Moves Forward. Now, It’s Up to Shareholders, and the STB

2022 RAILROAD FINANCIAL DESK BOOK Buyers and Sellers, Enjoy the Show!

TECH FOCUS – M/W: FASTENERS railwayage.com

Refining the AugustInterface 2017 // Railway Age 1 Rail/Crosstie

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AILWAY GE

February 2020 OCTOBER 2021

FEATURES

William C. Vantuono

Financial Desk Book Enjoy the Show

Wabtec FLXdrive Heavy-Haul Battery Power

NYMTA: What’s Next?

Tech Focus – Fasteners

Better Days With Cuomo Out?

The Rail/Crosstie Interface

DEPARTMENTS 4 6 8 44 45 46 46 47

Industry Indicators Industry Outlook Market Book Review People Professional Directory Classified Advertising Index

COMMENTARY 2 48

From the Editor ASLRRA Perspective

COVER PHOTO Canadian Pacific and Kansas City Southern locomotives at the top of the westbound grade at the Continental Divide in Crowsnest Pass, Alberta. Photo by David Duffin

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October 2021 // Railway Age 1

FROM THE EDITOR Truth and Reconciliation—4,400 HP Strong

long time ago, Phyllis Jack Webstad, a six-year-old Shuswap girl from Canada’s Stswecem’c Xgat’tem First Nation, was stolen from her family and imprisoned in a Residential School—a cruel, bizarre system concocted by the government and aided and abetted by the Catholic Church, whose reputation with children is nauseating. On her first day of Residential Schooling, she was stripped of her clothes, including a new orange shirt her grandmother had bought her. That shirt now symbolizes how the Residential School system tried to “take the native out of the Indian” through systemic physical, sexual and emotional abuse at the hands of sadistic nuns and priests. Phyllis, unlike thousands of her peers who perished and were buried in unmarked graves, survived her ordeal. She founded the non-profit Orange Shirt Society, which supports Residential School Reconciliation and creates awareness of the individual,

family and community inter-generational impacts that resulted from this “educational” program. Sept. 30, 2021 was Canada’s first National Day for Truth and Reconciliation, also called “Orange Shirt Day.” The biggest, boldest and in many ways most awe-inspiring symbol for Orange Shirt Day is Canadian Pacific ES44AC Every Child Matters No. 8757, painted in bright orange and sporting the Orange Shirt Society logo. The story behind CP 8757 began with 13-year-old Jacob Hoffer (below, left), a First Nations youth who this past summer wrote to CP asking the railroad to consider painting one of CP’s locomotives orange. Jacob’s efforts paid off: On Sept. 27, he and his mother, Darcy, went to CP’s Calgary headquarters to see 8757 unveiled. CP Senior Vice PresidentEngineering, Mechanical and Procurement Scott MacDonald hosted them. On Sept. 30, 8757 was commissioned into revenue service on the CP network. As CEO Keith Creel said, “The attention and honor belongs to Canada’s First Nations and First Nations children. We are blessed to have been able to play a small role in making the tribute happen.” Xwexweyt re sts Memelt Tsexyen!

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Industry Indicators RAILROADS ‘NAVIGATING THROUGH A SLEW OF SUPPLY CHAIN CHALLENGES’ “Railroads now find themselves having to navigate through a slew of supply chain challenges. Rail volumes are being impacted,” the Association of American Railroads reported last month. “In August 2021, total originated carloads on U.S. railroads were up 4.1% over August 2020 and down 11.4% from August 2019. The 4.1% year-over-year gain was the smallest since March 2021. Meanwhile, U.S. intermodal originations were 3.3% lower in August 2021 than August 2020—intermodal’s first year-over-year decline in 13 months and 0.4% lower than August 2019. U.S. rail carloads in August 2021 were higher than August 2020 in 14 of the 20 categories we track and higher than August 2019 in six.”

Railroad employment, Class I linehaul carriers, AUGUST 2021 (% change from AUGUST 2020)

TOTAL EMPLOYEES: 114,431 % CHANGE FROM AUGUST 2020: -2.83%

Transportation (train and engine) 47,109 (+1.85%)

Executives, Officials and Staff Assistants 7,271 (-2.94%)

TRAFFIC ORIGINATED CARLOADS

FOUR WEEKS ENDING August 28, 2021

MAJOR U.S. RAILROADS BY COMMODITY

AUG. ’21

AUG. ’20

% CHANGE

Grain Farm Products excl. Grain Grain Mill Products Food Products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber & Wood Products Pulp & 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

73,036 2,245 35,022 22,794 131,955 41,688 266,201 4,222 12,433 23,151 25,129 14,724 38,342 17,013 54,018 83,000 15,531 34,211 15,878 24,169

88,575 3,498 36,212 22,155 124,853 42,865 245,535 3,941 13,039 20,145 17,511 11,731 30,394 13,731 64,658 75,045 13,692 32,558 14,058 23,751

-17.5% -35.8% -3.3% 2.9% 5.7% -2.7% 8.4% 7.1% -4.6% 14.9% 43.5% 25.5% 26.1% 23.9% -16.5% 10.6% 13.4% 5.1% 12.9% 1.8%

TOTAL U.S. CARLOADS

934,762

897,947

4.1%

293,214

289,813

1.2%

1,227,976

1,187,760

3.4%

CANADIAN RAILROADS TOTAL CANADIAN CARLOADS

COMBINED U.S./CANADA RR

Professional and Administrative 9,853 (-4.83%)

Maintenance-of-Way and Structures 28,334 (-3.73%)

Maintenance of Equipment and Stores

Intermodal

Four WEEKS ENDING AUGUST 28, 2021

MAJOR U.S. RAILROADS BY COMMODITY Trailers Containers TOTAL UNITS

17,205 (-10.23%)

CANADIAN RAILROADS

Transportation (other than train & engine)

Trailers Containers TOTAL UNITS

AUG. ’21

AUG. ’20

% CHANGE

92,702

1,085,345

1,030,246 1,122,948

-10.6% -2.7% -3.3%

0 289,589 289,589

0 281,273 281,273

— 3.0% 3.0%

92,702

82,908 1,002,437

4,659 (-8.09%)

COMBINED U.S./CANADA RR

Source: Surface Transportation Board

Trailers Containers

82,908 1,292,026

1,311,519

-10.6% -1.5%

TOTAL COMBINED UNITS

1,374,934

1,404,221

-2.1%

Source: Rail Time Indicators, Association of American Railroads

4 Railway Age // October 2021

railwayage.com

BEFORE YOU INVEST IN ANOTHER AIR BRAKE CONTROL VALVE,

TOTAL U.S./Canadian CARLOADS, AUGUST 2021 VS. AUGUST 2020

1,227,976 AUGUST 2021

STOP & CONSIDER:

1,187,760 AUGUST 2020

Short Line And Regional Traffic Index CARLOADS

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

ORIGINATED AUGUST ’21

ORIGINATED AUGUST ’20

% CHANGE

90,483 26,255 31,574 14,392 24,072 12,726 11,490 3,716 20,777 10,253 3,290 3,876 21,810 23,907 107,563 14,733 83,867

49,717 15,460 17,480 9,806 27,100 7,231 8,992 2,458 15,987 10,666 1,493 1,877 17,778 14,515 53,573 9,158 71,713

82.0% 69.8% 80.6% 46.8% -11.2% 76.0% 27.8% 51.2% 30.0% -3.9% 120.4% 106.5% 22.7% 64.7% 100.8% 60.9% 16.9%

TOTAL U.S. Carloads and intermodal units, 2012-2021

(in millions, year-to-date through AUGUST 2021, SIX-WEEK MOVING AVERAGE)

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October 2021 // Railway Age 5

Industry Outlook

“I AM ELATED FOR OUR CP FAMILY,” an understandably energized Canadian Pacific President and CEO Keith Creel told Railway Age Editor-in-Chief William C. Vantuono the day after a joint call with analysts with his Kansas City Southern counterpart, Pat Ottensmeyer, following the announcement of their agreement to proceed with a merger. “This is a blessing,” he said. “This has been a journey with many twists and turns, and it led me to this place in life. Call it faith, destiny, because deep down, I have been confident that sticking to the truth, the facts, was the only chance we had to succeed. Facts matter, as well as understanding your own strengths and weaknesses. This, I feel, has been my purpose.” During his 30-year career in railroad operations before becoming CP’s CEO, Creel was not directly involved with regulatory matters, but he knew that he needed to have a firm grasp of them if he was to successfully steer CP and KCS toward comb6 Railway Age // October 2021

ing. “I did a lot of homework,” he said. When, asked what he would say to his mentor, the late Hunter Harrison if he were around, Creel replied, “I’d say, ‘Thank you for teaching me the railroad business.’ I learned from Hunter—and there’s a lot of him in me—that railroading is basically about people, processes and operations, and that PSR, when executed the right way, is a recipe for success.” Provided the Surface Transportation Board gives its stamp of approval, a special celebration is planned to mark the official start-up of the Class I railroad that will be named Canadian Pacific Kansas City, or CPKC. Creel told Railway Age that a commemorative business train will be operated from Calgary to Mexico City on the CPKC main line to mark the occasion— powered by none other than 2816, the iconic Empress steam locomotive. “We of course do not want to get out in front of the STB, but if all goes as anticipated, 2816 will be on the head end, in full steam.”

On Sept. 16, at KCS headquarters in Kansas City, Keith Creel and Pat Ottensmeyer, joined by CP’s John Brooks (Executive Vice President and Chief Marketing Officer), Nadeem Velani (EVP and Chief Financial Officer) and Chris de Bruyn (Managing Director, Investor Relations and Treasury), took question from analysts. “It’s an honor to be here today in Kansas City with Pat and the team,” Creel said. “I think it’s only appropriate that we started the first day of our future together as the CPKC family. We flew down last night to join the team. We are excited about this powerful combination. On behalf of the Canadian Pacific and the Kansas City Southern Boards, we’re excited to combine to create the first U.S.-Mexico-Canada rail network. We continue to see challenges—it’s undeniable that the pandemic is right on our supply chain—so this combination makes even more sense today. It creates stability and opportunity for our customers in the North American transportation network.” railwayage.com

David Duffin

Dramatic Conclusion: CPKC a ‘Powerful Combination’

industry outlook

“Speaking from the Kansas City Southern side, we’re very excited about the merger between these two terrific, historic and iconic franchises,” said Ottensmeyer. “Kansas City Southern and Canadian Pacific have been the two fastest-growing railroads in the industry for the recent past. This combination is driven by growth, driven by opportunity for North America that this one-of-a-kind North American rail franchise is going to create. Not only will we participate in the growth that USMCA and other factors are creating for a resurgence of manufacturing in North America, we believe that this combination, the creation of this North American network, will help drive that growth and attract manufacturing and investment back to all three countries in North America. It creates truckcompetitive options and single-line service options to leverage this network, and provides significant environmental advantages, reduced carbon emissions by converting truck traffic to the railroad. We will achieve diversification in our service offering for railwayage.com

both companies vs. what we have today, and access new markets, new growth opportunities. This benefits our employees by enabling us to become part of a larger and growing truly North American continental enterprise. It’s particularly significant that Keith and his management team chose to come to Kansas City for the announcement and sessions that we’re having here today. It clearly validates and reinforces his commitment to Kansas City and the employees of Kansas City Southern.” “We expect expense synergies of $180 million through a combination of improved fuel efficiency, lower G&A and equipment rents as well as facilities, IT spend and licensing,” said Velani. “We’ve been overwhelmed by the positive response from customers, this proposal, that gave us the confidence to increase our revenue synergy estimates. When fully realized, after a three-year period, we expect annual $820 million of EBITDA growth through incremental revenues of just over $1 billion, which will be achieved through the combination. Combined with the $180 million of expense synergies, we expect to generate $1 billion in EBITDA over three years. Ultimately, you should expect that CPKC franchise to deliver what investors have come to expect from us, industry-leading margins, high single-digit CAGR of revenue growth and return on invested capital in excess of 16%. “We have a high confidence in our ability to exceed the $1 billion in synergies,” said Brooks. “I can tell you we’ve pressure-tested these synergies. I have most of my career, but in particular, over the past year or so, the customer response has been overwhelmingly positive. CPKC truly unlocks new capacity for the industry and builds supply chain resiliency in a time we all know we need it more than ever. No customers will be left behind. We will provide new markets, new routes, new alternatives to reach consumers across North America. We see growth opportunities equally across all lines of businesses and customers big and small. I look at our agriculture book of business, and this becomes a real game-changer. This deal links our franchise to new export and domestic consumption markets we simply can’t get to today. On the intermodal front, this gives us access from Mexico through Texas and into the U.S. Midwest and Canada, and will create new competition and powerful opportunities

for customers to take trucks off the road. On the automotive front, manufacturers in Mexico will gain single-line access in markets such as Minneapolis, Chicago, Detroit, and of course, Canada. And I’m particularly excited about the ability to continue to extend our reach to our short line and regional partners as they will continue to be a critical part of our growth engine. And our combined transload network provides new options for non-rail-served customers to convert truck to rail. We are and will continue to be keenly focused on our CP and KCS customers through this journey.” As for timing, the STB approved the CPKC voting trust in May of this year and re-affirmed it on Sept. 30. “We were intentional to not change any pertinent facts in our renewed merger agreement, which we have submitted along with an amended notice of intent to the STB for their review,” Creel stressed. “We see a clear path to completion with the previous voting trust approved. The gating times will be the shareholder votes and approvals in Mexico. On the shareholder vote aspect, we expect votes in December of this year. On the Mexican approval process, we expect that to take two to four months. We expect to close and enter into trust in first-quarter 2022. It has been a journey, one worth traveling. We’re ready to get to work, close this in the trust, securing ultimate STB approval and integrating these two iconic companies into something neither could achieve alone. We’re excited, we’re energized, we’re ready for the future, ready to go to work for the shareholders, for the customers, for our employees, our CPKC family and for the communities we serve.” “We realized that customers are going to have their asks and their concerns,” Creel said. “We understand that our railroad partners and competitors are going to have their list of asks and concerns. But the risk comes in only if we don’t act in a responsible way and we’re not of our word. We’re going to keep interchanges open. Physically, commercially, we’re going to work closely with our interchange partners. We’re not going to price them out of lanes. We’re not going to behave in a predatory manner that creates that kind of risk. The facts: This is uniquely different than any other transaction. This is an end-to-end combination. There are no debits and credits. The truth matters. It’s hand in glove.” October 2021 // Railway Age 7

market CGR’s New Rail Ferries Two new rail ferries, the Cherokee (pictured) and the Mayan, have been delivered to CG Railway (CGR), a joint venture of Genesee & Wyoming Inc. (G&W) and SEACOR Holdings Inc. The Cherokee’s maiden round trip voyage between the ports of Mobile, Ala., and Coatzacoalcos, State of Veracuz, Mexico took place from Sept. 12 to Sept. 21. The vessel carried 122 railcars to Mexico and returned to Alabama with 130. Each leg of the voyage took three days. On Sept. 22, CGR took delivery of the second new vessel, the Mayan, which is expected to enter service in December of this year. CSSC Huangpu Wenchong Shipbuilding Company in China built both vessels for CGR.

NORTH AMERICA

A battery-powered VIVARAIL D-Train will be launched at the COP26 climate conference in Glasgow at the end of October, and will operate daily services throughout the twoweek event from Nov. 1. The class 230 train, a rebuilt LONDON UNDERGROUND D-Train, will be able to travel for up to 80 miles on battery power recharge in only 10 minutes using Vivarail’s Fast Charge system, which was supported by the British government’s Innovate UK grant. It will soon undergo final NETWORK RAIL approvals.

NORFOLK SOUTHERN (NS) and PROGRESS RAIL, A CATERPILLAR COMPANY, have teamed on the first GP34ECO locomotive for yard and intermediate service. The unit is now undergoing testing to meet the U.S. Environmental Protection Agency Tier 4 emissions certification requirements. Powered by a 3,000-hp 12-710 EMD engine, the GP34ECO uses the “first diesel exhaust fluid (DEF)/selective catalytic reduction (SCR) aftertreatment system intended for line haul locomotive applications,” NS and Progress Rail said. The unit also offers a new crashworthy cab and new cab electronics. Since 2008, NS and Progress Rail have repowered 50 locomotives specifically for the ECO line. “New and improved EMD ECO locomotives offer lower emissions, fuel savings and operating efficiencies,” they reported, adding that one ECO can replace two older, less-efficient locomotives. “The GP34ECO locomotive design was based on incorporating a Tier 4 system intended to fit our GP and SD locomotive platforms,” said Ahmed Moustehy, Vice President of North America Rolling Stock Sales for Progress Rail. A 90% reduction in nitrogen oxide emissions and significantly higher

8 Railway Age // October 2021

fuel efficiency are achieved, according to the companies. The unit is slated to enter intermediate service in Harrisburg, Pa., later this year, and NS will work with Progress Rail “to ensure field testing meets final emissions certification requirements.” NS assembled the locomotive core at its Juniata Locomotive Shop in Altoona, Pa., and together with the Progress Rail and Caterpillar engineering teams performed final assembly, engine and SCR aftertreatment system work. BRIGHTLINE, Florida’s private-sector passenger rail operator, placed a Phase 2 trainset order with SIEMENS MOBILITY for its planned extension from West Palm Beach to Orlando. It includes five sets—each comprising four coaches and two Charger dieselelectric locomotives (one at each end)—plus an additional Charger unit. The Chargers meet Tier 4 emissions standards with a CUMMINS QSK95 prime-mover. The order also includes an option for 30 additional coaches. Siemens Mobility and Brightline are now in discussions to supply current Brightline technology for the proposed higher-speed Brightline West line connecting Las Vegas and Los Angeles. Financing plans for the $8 billion project should be finalized within the next six months. railwayage.com

CG Railway

WORLDWIDE

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

RAILROAD FINANCIAL

DESK BOOK

2022

ENJOY THE SHOW

By David Nahass, Financial Editor

COMPANY PROFILES

2022 FINANCIAL DESK BOOK

ENJOY THE

elcome to the 2022 Railroad Financial Desk Book. The rail market has had a hot summer—Donna Summer “Hot Stuff ” hot (https://www.youtube.com/ watch?v=AqS4aNi0HQY). However, this year’s Desk Book is not another article praising or burying the phenomenal summertime drama of CP-KCS-CN, so curb your feelings of malaise. Some industry watchers have been bent on following the corporate chess match to see whether CN or CP would pay KCS shareholders buckets of cash and stock. Others have been glued to the webpage tracking STB Chairman Oberman like Santa on Christmas Eve (https://santatracker.google.com/) as he jets around the country from rail conference to rail conference, aggressively speaking out on railroad service issues and business practices. But the real drama of the summer is in the rail equipment industry, where more than $2 billion in equipment has received investment commitments and has or will change hands before the end of 2022. 10 Railway Age // October 2021

What are the deals? Some are public knowledge, and some are the kind of industry rumor/statements of fact that never make it into print. Here’s a quick rundown: • The Andersons, Inc. on Aug. 16 announced the sale of its railcar lease f leet to AITX, an affiliate of ITE Management L.P. The sale price was approximately $550 million for approximately 24,000 railcars. (https://www.railwayage.com/ f i na nc ele a si ng /a it x-acqu i re s-t heandersons-inc-railcar-leasing-unitfor-0-55b-cash/) • A few days later, on Aug. 18, Trinity Industries, Inc. announced a joint venture with Wafra Inc., identified as $1 billion over three years with an initial tranche of $325 million (3,200 railcars). (https://www.railwayage. com /f ina nceleasing /trinit y-waf raform-investment-partnership/) • Other f leet sales and secondary market opportunities brought to market and awarded represent an additional 12,000-plus railcars being offered for sale in the second quarter of 2021. These are all private sales

conducted on a confidential basis, with no publicly available information. Certainly, there are more to follow. That’s a large number of assets—more than 46,000 railcars or the size of a larger than average operating lease company— switching owners in a short time frame. But a paltry number—3% —vs. the total number of railcars in North America: 1.65 million. Nonetheless, it’s a bit of a conundrum, even for veteran industry watchers. What seems to be happening is that certain veteran companies such as The Andersons and other unspecified companies are exiting the market while newer money (AITX/ITE, Wafra and others) is moving into that same market. Complexifying, isn’t it? In many industries, 3% might generally not be newsworthy. However, when you consider that rail assets are long-lived assets and that investors in those assets tend to own them for the long term, a significant change in the landscape raises a few eyebrows. It gets even more interesting when a company with a successful history in railcar leasing of more than 30 years decides to exit the business. railwayage.com

William C. Vantuono

SHOW

BY DAVID NAHASS, FINANCIAL EDITOR

Take it to the next level. If you believe the regulatory rhetoric, the future of the volume of railcar loadings seems to be at stake, based on the behavior of railroads. The STB, casting fire and brimstone, has chastised the railroads on several fronts, most notably committing more capital to shareholders over investment in infrastructure and using the bully pulpit to advocate for on-time service. (Is that even a thing in North American rail?) Across Railway Age, on industry blogs and from a wide-ranging percentage of car owners and operators, questions regarding railroad loadings’ growth continue. 12 Railway Age // October 2021

In the midst of some industry chaos— declines or at least stagnation in railcar loadings (remember that 2021 loadings are still below 2019 pre-pandemic levels, even including a robust improvement in intermodal); an STB Chairman who is committed to extracting regulatory concessions from railroads; spikes in the prices of raw materials (steel and aluminum); and a COVID-19 pandemic that continues to place its viral fingerprint on the U.S. and global economy—investors are making considerable investments in railcar assets. So what’s the deal? Should you be (in

the words of the late, great Lawrence Beal) buying or selling? In his virtual presentation for Rail Equipment Finance 2021, Dr. Sergio Rebelo, MUFG Bank Distinguished Professor of International Finance at Northwestern University, noted to the audience that investment returns for equity investors were declining from 6% pre-pandemic and 8% post-financial crisis to less than 4%. On an historical basis, unleveraged (equity only) returns for rail investment were something more along the lines of 8%, and asset owners, especially operating lessors, generated extra value, the “upside,” through well-timed sales and by exploiting rental market inconsistencies to increase lease rates. This has made railcar leasing the attractive business that has kept companies like GATX, The Andersons and Trinity in high clover for decades. These companies, and more like them, have recognized the key component of railcars that makes investment successful and lucrative: the longevity of the assets (railcars) and the capability of earning lease revenue over their entire 50-year regulatory life cycle, if they have been well maintained. However, today’s lengthy period of low interest rates has provided the investment community with a sprinkling of jet fuel. New investors can use cheap, third-party capital to compress those equity returns from the historically relevant 8% to Dr. Rebelo’s sub-4%. Low interest rates allow today’s asset purchasers to buy these assets; borrow against them; and then increase their total return to 8%, 10% or even higher. If you are a railcar owner in today’s market, you can scrape and scrap for returns on your invested capital and potential upside over a period of 30-50 years. It works, and for savvy investors and operators, that strategy will continue to work. As an alternative, you can sell to someone with lower return thresholds, pocket the cash, pay down debt, buy back shares (sorry, not sorry Chairman Oberman), invest in a new business strategy or opportunities of your choosing, or in some cases start all over again and build up the process a second or third time. This is what Carl Icahn did four railwayage.com

William C. Vantuono

2022 FINANCIAL DESK BOOK

14 Railway Age // October 2021

culture. But perhaps low rates for equity and debt will buck that trend. Until then, buyers and sellers, as you meet each other at your respective entrances and exits, wish each other luck and enjoy the show. Any questions? AROUND THE MARKET Lease rates have been on the rise due to spikes in demand for certain types of railcars, in spite of languishing railcar loadings, and due to the staggeringly high price of raw materials putting a damper

on new car builds in 2022. See August’s “Financial Edge” for some extended discussion on this topic. In fact, for the first time in recent memory, some car types are close to full utilization. (https ://w w w.railwayage.com/f inanceleasing/leasing-improvements-may-beunsustainable/?RAchannel=home) It’s no secret that lease rates on used railcars track the price of leasing or owning new ones. However, with new railcar prices having risen so dramatically, new car purchase and lease costs

William C. Vantuono

times over 30-plus years (see “Carl Icahn Knows Rail Investing,” https://www.railwayage.com /f inanceleasing/cal-icahnknows-rail-investing/) to great success. In fact, today’s equity returns are so low that Icahn might be kicking himself for selling in 2018 far too early and for way too low of a price. So once again, should you be buying, or should you be selling? Well, unfortunately, that returns to the fundamental aspects of the market for railcars and investor confidence in the long-term prospects for the rail industry. For example, if you feel that the following trends are going to continue for a few more years as North American rail stagnates, well, now might be the time to look at taking some chips off the table: • Treating railcars as a commodity. • Minimizing the value of customer service. • Continued downward pressure on lease rates (which has, let’s be honest, been the trend in general freight cars for the past few years). • Focusing on new freight moves that are accretive to a railroad’s EBITDA while maintaining operating ratio. Contrarily, if you think that, less than one year into President Biden’s Administration, the government agenda includes: • A firmer hand on the regulatory steering wheel encouraging freight price reductions. • A focus on expanding the common carrier obligation. • Opposing much of what underscores the “do more with less” strategy of PSR. • A push to move more freight by rail as a strategy for curbing trucking emissions. • The possibility of enacting more stringent emissions requirements for locomotives. A bet on the rising demand for railcars of all types might be very prescient at this time. North American rail and its status as the backbone of America’s transportation infrastructure is unassailable. Investors are witnesses and occasionally unwilling participants in the implementation, actualization and application of that infrastructure. Pure money plays for rail assets generally don’t match up with the

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2022 FINANCIAL DESK BOOK can be substantially higher. Additionally, because 2021 new railcar production rates have been roughly 2,000 cars per month, new cars are not necessarily being built for the lease market right now. Therefore, this episode of Around the Market will focus on used assets over new builds. Grain Covered Hoppers: Grain loadings are up 11.5% YOY to date. This growth along with the scrapping of some older 4,750cf cars and some railroad service problems has led to increasing demand for grain cars of all types. The remaining 4,750cf fleet (or maybe, the remaining fleet not currently in deep storage) is almost at full utilization, with lease rates in the high $200s or low $300s full-service, if you can find them. 5,200cf cars are in the high $300s, and 5,400cf cars are north of $400 per car per month. Cars in an existing lease may be renewed at the lower ends of those ranges. There seems to be some stability here in the short term. Plastics Covered Hoppers: Rates on existing cars (6,200cf) are still sub-$500

(net) but there seems to be some tightening of supply in the market. This market has not yet reached parity. Additionally, the price of a new car right now is likely to scare off purchasers looking to purchase railcars to lease and may also scare the OEMs into better pricing. Natural gas price increases have an impact on the pricing of plastics, so if natural gas stays above or near $5.00 MMBTU (it’s $4.80 today), there could be some impact on demand. 5,800cf cars are still a mixed opportunity, and the rates there are still around the $300 level. Sand and Cement Covered Hoppers: Small-cube hoppers continue to be returned to lessors in large numbers. However, there has been some intermittent demand leading to occasional lease prices in the mid-$100s (that’s up from double-digit numbers). It doesn’t seem like there is long-term strength at this level. Lessors are happy to get what they can for these cars, but loadings for sand and gravel are down YOY. Don’t place

great hope on the infrastructure bill and cement demand to lift this market. Incremental demand will not be enough to be the straw that stirs the drink, and there are still 130,000-plus covered hopper cars in storage. It’s safe to assume the majority of them are small-cube. Cars in cement service may command a premium over cars in a sand move, but that delta is shrinking as lessors look for opportunities to consume their off-lease assets. Coal: Here are some words that many thought would never be said together again: Coal cars are having a moment. An eclectic mix of factors, railroad service problems, a highly segmented but generally very hot summer, some organized scrapping of some older (and some newer) coal cars, and the higher price of natural gas has led to an increase in coal loadings of about 12% YOY. That is not up to 2019’s levels, so please do not run around shouting, “Coal is back!” A 12% increase annualized is roughly 300,000 carloads, so no one seems to be complaining. Gondola

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2022 FINANCIAL DESK BOOK has continued to stress this market segment. DOT-117R (retrofit) cars are leasing for high-$500s (full service), while DOT-117Js (new) are leasing for high-$700s, depending on the timing of delivery. There is some f luctuation based on size, 29,000-gallon vs. 25,000gallon, but it is not a huge (HUUUGE) deviation. Pressure cars for LPG are in the low-$600s (full service), but rates are expected to increase as inventories of available cars decline. This isn’t the first time inventory of pressure cars has been forecast to dry up, but bets that pressure tank cars will continue to be available at lower prices favor the house (car owner) at this junction, so expect rates to increase. Boxcars: In what felt like an instant, the available inventory of 60-foot boxcars got snapped up a month or two ago. New boxcar orders are being placed, and this market is pretty hot right now. Why? Intermodal congestion stresses the boxcar supply pool, but more likely, it’s supply

chain contagion in general, and boxcars are not moving with greatest of f luidity. Rental rates for 50-foot Plate F boxes (non per diem) are in the mid-$500s (full service) and 60-foot Plate F boxcars are in the low-$600s. Can rates go up from here? Certainly, they can, but any additional increases will be modest, as car availability seems to be the issue at hand. Mill Gons: These are like grain hoppers right now, with inventories low and rising rates. With steel prices climbing high, new builds probably don’t make much sense right now, so expect tightness to continue. Lease rates on 52-foot gons are in the high-$400s (full service), and 66-foot gon rates are in the high-$500s. Expect rates to rise from here. Will they rise enough to encourage new builds? That’s a big move from current levels. Got questions? Set them free at dnahass@ railfin.com Financial Desk Book Directory follows on p. 20.

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cars and rapid discharge hopper cars are both participating in the rally. For investors, the long-term future of coal is not being revised, so term length seems to be the challenge. Deciding which poison to take—higher rates for a shorter term or the opposite, lower rates for a longer term—is never fun. Lease rates are all over the place, impacted by age, term, and whether the lease is net or full. Fullservice rates are rumored to be as high as the low-$300s on gondolas and hoppers. Net leases are still low, with prices in the mid- to low-$100s. Again, the spread on renewal vs. new opportunity here can be significant. While higher rates might be available with a new customer right now if the music stops, losing the seat as the incumbent could mean storage in your future. Tank Cars: The mix of oversupply, interpretation of regulatory changes with some confusion, and embargoing and storage of cars that were moving into and out of Mexico in refined fuel moves

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2022 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.

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; Clint Rice, 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. SEE OUR AD ON PAGE 13 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 20 Railway Age // October 2021

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 INDUSTRIAL TRANSPORT INC. (AITX) 100 Clark Street, St. Charles, MO 63301-2075. Tel.: 636-940-6000; Fax: 636-940-6100. Contacts: Sean Hankinson, Chief Commercial Officer, 814-242-6141. shankinson@aitx.com. American Industrial Transport, Inc. is a leading solutions-provider of railcar services, dedicated to growing our fleet and providing customers a range of options across leasing, fleet management, and repair services. AITX has access to one of the industry’s most diverse fleets of nearly 60,000 railcars across car-types and commodities-served. Due to their customer service, flexible financing options, and extensive knowledge of taxation, government regulations and railroad requirements, AITX has satisfied leasing customers across freight industries. AITX and its subsidiaries operate world-class railcar repair services through its specialized network spanning across North America. Offering a range of programs from full to light repair, AITX’s maintenance capabilities include full-service repair facilities, tank car qualifications, a wide footprint of responsive mobile operations, and onsite customer dedicated partnerships. To learn more about AITX’s depth of services and customer commitment, visit aitx.com. SEE OUR AD ON THE BACK COVER ATEL LEASING CORPORATION The Transamerica Pyramid, 600 Montgomery Street, San Francisco, CA 94111; Tel.: 415-6163486; Ken Fosina, Executive Vice President, Email: kfosina@atel.com. Since 1977, ATEL has leased rail assets to America’s largest railroads railwayage.com

2022 FINANCIAL DESK BOOK DIRECTORY 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 maintenanceof-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 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. CIT RAIL 30 South Wacker Drive, Suite 2900, Chicago, IL 60606; Tel.: 312-906-5701. CIT’s Rail division offers a full suite of railcar leasing and equipment financing solutions to rail shippers and carriers across North America. It manages one of the youngest and most diversified railcar and locomotive fleets in the industry and leverages its deep experience to empower customers. Contact us to learn how railwayage.com

our transportation solutions can power your business. Visit cit.com/rail, call 312-906-5701 or follow @CITgroup. SEE OUR AD ON PAGE 19 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; Dan Dorsey, General Manager-Rail Equipment Group; Jeff Schmutte, Jeff Blake and Eric Hausfeld, Regional Sales Managers; Luke Weatherhead, 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. SEE OUR AD ON PAGE 13 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. THE GREENBRIER COMPANIES 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. Tom Jackson, V.P., Marketing. Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Through its wholly owned subsidiaries and joint ventures, Greenbrier designs, builds and markets freight railcars and marine barges in North America, Europe and Brazil. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair and parts business unit. Greenbrier manages 445,000 railcars and offers railcar management, regulatory compliance services and leasing services to railroads and other railcars owners in North America. GBX Leasing (GBXL) is a special purpose subsidiary that owns and manages a portfolio of leased railcars that originate primarily from Greenbrier’s manufacturing operations. Together, GBXL and Greenbrier own a lease fleet of 8,700 railcars. Learn more about Greenbrier at www.gbrx.com. 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.: 859-6400362; 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 longterm 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. October 2021 // Railway Age 21

2022 FINANCIAL DESK BOOK DIRECTORY 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. MUL RAILCARS, INC. 121 SW Morrison Street, Suite 1525, Portland, OR 97204. Tel.: 503-208-9295. Email: sales@ mul-railcars.com. www.mul-railcars.com. MUL Railcars is based in Portland, Ore., and is a significant player in the North American railcar leasing and management business, offering best-in-class asset management capabilities combined with a uniquely experienced and talented team dedicated to customer solutions. MUL Railcars has one of the youngest and most comprehensive fleets in the rail leasing industry, serving customers in the railroad, agriculture, automotive, aggregates, chemicals, energy, forest products, plastics and steel industries. PROGRESS RAIL, A CATERPILLAR COMPANY Mike MacMahon, Director of Railcar Leasing, mmacmahon@progressrail.com; Jay Hatfield, Director of Business Development, jhhatfield@progressrail.com; Gary Lawrence, Manager, Locomotive Sales & Leasing, glawrence@progressrail.com. Jacob Creech, Manager, Locomotive Leasing, jcreech@ progressrail.com. Progress Rail, a Caterpillar Company, offers through its Freight Car Leasing Division offer a wide variety of freight cars and leasing options to meet our customers’ specific transportation requirements: Full-Service, Net and Per-Diem leases, and Purchase-Leasebacks. Understanding your needs and supplying an optimal solution is what we do best. The Locomotive Leasing Division offers Full-Service Leases: Net, Seasonal, Sell-Lease Back, Trade-Ins. All locomotives sold or leased go through an extensive inspection to ensure you are receiving 22 Railway Age // October 2021

equipment that is ready for service. Refurbishment or upgrades are available to ensure the locomotive fits your operation, with work completed in our own shops under our supervision, ensuring the highest level of quality. Through the acquisition of Electro-Motive Diesel, Progress Rail has access to locomotive information other providers cannot supply. Our locomotive inventory is constantly changing, as we strive to be your top supplier of quality and dependable used locomotives. SEE OUR AD ON PAGE 18 RELAM (RAILWAY EQUIPMENT LEASING AND MAINTENANCE) INC. 7695 Bond Street, Glenwillow, OH 44139; (440) 439-7088. John Roberts, CEO, Email: jroberts@relaminc.com. As a full-service leasing company, we offer complete MOW equipment leasing services. Each of our team members is knowledgeable, professional, prompt and courteous, one reason why our clients stay with us. We understand the importance of making every business transaction easy on the customer. We handle all the paperwork and logistics for every lease, so you can spend your time on more important things. We are committed to providing our clients with the highest level of service while remaining competitive in today’s market. RELAM knows railroad operations and the equipment involved. SEE OUR AD ON PAGE 17 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.: 641-932-3030; 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; Mike McCarthy, President & CEO (312) 559-4803; Tina Beckberger, Senior Vice President Leasing, (312) 559-4818. 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/leasebacks, or portfolio acquisitions. Contact us via www.smbcrail.com or sales@smbcrail.com. SEE OUR AD ON PAGE 16 TEALINC, LTD. 1606 Rosebud Creek Road, Forsyth, MT 59327; Tel.: 406-347-5237; Fax: 406-347-5239; 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

2022 FINANCIAL DESK BOOK DIRECTORY TRINITYRAIL® 2525 N. Stemmons Freeway, Dallas, TX 75207. 1-800-631-4420. TrintyRail® provides access to the rail transportation businesses of Trinity Industries, Inc. With an owned and managed fleet of approximately 131,000 railcars, Trinity Industries Leasing Company (TILC) provides one of the largest railcar fleets in North America. In addition to comprehensive leasing and management services, our customers have access to extensive manufacturing and engineering resources, railcar maintenance, parts, asset management and advisory services, and on-site field support for operational assistance and training. An overview of our platform of integrated rail products and services is available at www. trinityrail.com. SEE OUR AD ON PAGE 15 UNION TANK CAR COMPANY 175 W. Jackson Blvd., Suite 2100, Chicago, Illinois 60604; 312-431-3111; leasinginquiry@ utlx.com; https://www.utlx.com. Union Tank Car Company (UTLX) supplies general purpose and pressure tank cars, in addition to plastics covered hopper cars, for bulk shippers. Along with Canadian affiliate Procor Limited (PROX), our combined companies own the largest and most diverse tank car fleet in North America, specializing in full-service tank car leasing. We also operate the largest railcar repair network on the continent, and with the acquisition of Transco Railway Products Inc. in 2019, our repair network now includes 26 full-service shops and more than 100 mini shop and mobile unit installations. UTLX is capable of servicing all fleet management and maintenance needs for all car types. Our manufacturing operation, located in Alexandria, Louisiana, specializes in the fabrication of tank cars. Leveraging an integrated leasing-repair-manufacturing model with experience cultivated throughout our 130-year history, our talented team provides superior customer service and shapes the future of the highly regulated North American tank car industry. Union Tank Car Company is a Marmon/Berkshire Hathaway Company. SEE OUR AD ON PAGE 11 VTG RAIL INC. 103 West Vandalia, Suite 200, Edwardsville, IL 62025. Bryan Vaughan, Regional Vice President Sales, 630-361-6745, Bryan. railwayage.com

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 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, LLC 1401 Walnut Street, Suite 500, Boulder, CO 80302; (646) 258-5812. 2593 Wexford-Bayne Road, Suite 205, Sewickley, PA 15143; (724) 766-6699; Email: mmahoney@railsolutionsllc.com, rblankemeyer@railsolutions-llc.com; Website: www.railsolutions-llc.com; Michael E Mahoney, President; Robert Blankemeyer, Senior Vice President. RailSolutions

LLC 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 LLC 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 close to 50 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 short-term objectives and longterm opportunities. October 2021 // Railway Age 23

AILWAY GE

SPONSORED CONTENT

PLASSER AT 60 Focus on Contracting Through the second-quarter of 2021, Plasser’s Contracting Services Business Unit has been providing undercutting and surfacing services. In addition to performance, customers realize value through reliability, which Plasser delivers with a historical uptime across the equipment fleet that exceeds or meets 98% year-over-year. Plasser’s equipment fleet comprises five undercutters and seven tampers that are dedicated for the work—with more on the way to meet market demand.

High Capacity | Precision | Reliability: Plasser American For more than 30 years, Plasser American has been offering contract services to the North American railroads. Leveraging Plasser American’s traditional standing as an Original Equipment Manufacturer has allowed the Contracting Services Business Unit to successfully partner with customers to provide turnkey solution services, such as undercutting, high-speed surfacing, and most recently shoulder ballast cleaning. What sets the company apart? Being an OEM, Plasser is a one-stop shop that offers its industry partners maintenanceof-way services using Plasser-owned machines or the option of operating and maintaining customer-owned assets. In either scenario, Plasser provides value to customers through safety, reliability and incomparable performance by leveraging its experience and knowledge base gathered from being an OEM. Plasser employees receive world-class training and support that provides them with additional

tools and provisions to ensure each employee’s success and, ultimately, the success of every Plasser customer.

Plasser American prides itself on being much more to customers than a manufacturer of the highest-quality track machines. Plasser American Delivers Plasser is currently serving customers throughout North America.

People Make the Difference Plasser’s skilled operators and maintainers—averaging 10-plus years of experience—offer consistent, high-quality performance. Like all Plasser employees, they are the company’s most valuable assets. Plasser continues to invest in its family of employees by providing the tools to be successful, such as extensive training that increases proficiency in troubleshooting, repairs and operation of the equipment. This leads to safe, reliable and productive service that provides customers a great return on their investment. Plasser American Is Growing Plasser American has had a vested interest in the success of its customers for 60 years— and counting. Plasser American’s aim is to support the industry by providing state-ofthe-art and next-level machines and services for its customers’ individual needs. That’s why its Contracting Services Business Unit has continued to invest resources in additional employees and equipment even during the pandemic. Additionally, while many companies are constricting, Plasser American recently broke ground on a $52 million expansion at its headquarters in Chesapeake, Va. Partner with Plasser, and you have a partner for life—invested in your success. This advertorial is based on an interview with Plasser American’s Rob Brownell, Director, Contracting Services Business Unit, and James Jones, Sales Director.

HIGH CAPACITY I PRECISION I RELIABILITY

The standard of ballast bed cleaning Saving time and resources, assuring high quality cleaning and offering flexibility in operation: that is Plasser’s philosophy for economical ballast cleaning. The most important foundation for sustainable track geometry is a faultless, straight formation. To produce this, the Plasser ballast cleaning machines for tracks and switches are equipped with an excavating chain in a transverse cutter bar - adjustable precisely to the required excavating depth and formation crosslevel.

www.plasseramerican.com “Plasser & Theurer”, “Plasser” and “P&T” are internationally registered trademarks.

MOTIVE POWER

FLXDRIVE ‘ELECTRIFIES’

PITTSBURGH Does 100% battery power have a future in heavy-haul freight? Wabtec, with Carnegie Mellon University and Genesee & Wyoming, seek an answer.

f electrical industry pioneer and railroad air brake inventor George Westinghouse, who hailed from New York state but established his namesake company in Pittsburgh, Pa., were around to see the Wabtec (Westinghouse Air Brake Technologies) FLXdrive battery locomotive, he’d be shocked—figuratively, of course. Wabtec’s FLXdrive, described as “the world’s first 100% battery, heavy-haul locomotive,” fresh off testing on BNSF, was front and center last month at Carnegie Mellon University (CMU) to mark the signing of two MOUs (memorandums of understanding). One, noting CMU as “a top university in engineering, artificial intelligence, battery technology, autonomy and robotics,” involves Wabtec and the 26 Railway Age // October 2021

university “formalizing their joint aim to create technologies that will decarbonize freight rail transport, improve freight safety, and generate greater rail network utilization.” The other is between Wabtec and Genesee & Wyoming “to pursue zeroemission battery and hydrogen freight strategies, as well as increase rail utilization across North America.” CMU, G&W and Wabtec also hope to create the Freight Rail Innovation Institute, described as “the first-of-its-kind effort to create zero-emission locomotives, develop technology that increases freight rail utilization and improve safety by 50%, and create 250,000 jobs by 2030.” G&W’s Buffalo & Pittsburgh Railroad will pilot technologies developed by the Freight Rail Innovation Institute, including a

zero-emissions battery and hydrogenpowered train that is planned for revenue operation on 200 miles of track between Pittsburgh and Buffalo, N.Y. within the next three years. The Freight Rail Innovation Institute’s creation depends upon the award of a $600 million, five-year grant from legislation co-authored by Sen. Bob Casey (D-Pa.) and Rep. Conor Lamb (D-Pa.-17). The Senate version, the Freight Rail Innovation Act (S. 1732), was introduced in May to the Senate Committee on Commerce, Science and Transportation. It has not moved out of committee. Lamb’s bill, also named the Freight Rail Innovation Act (HR. 3409) was introduced at the same time to the House Committee on Science, Space and Technology, and has not moved railwayage.com

William C. Vantuono

BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF

MOTIVE POWER

out of committee. Both bills aim to establish a Freight Rail Innovation Institute. Both legislators spoke at the Wabtec event; both—no surprise—said they were confident that the CMU-Wabtec-G&W initiative would be successful in winning the $600 million grant. The MOUs “are based on a joint vision of building a more sustainable freight transportation network [that] consists of two parts … powering locomotive fleets with alternative energy sources, such as batteries, and eventually, hydrogen fuel cells for a zero-emissions freight rail network pilot. The second focuses on advancements to current signaling systems and digital technologies to increase rail network capacity, utilization and safety across the U.S.” CMU “will play a leading role in developing railwayage.com

the engineering technologies that bring together the data, logistics and intelligence needed to optimize rail operations, while reducing emissions.” “While already the most environmentally friendly mode of surface transportation, freight railroads have a critical role to play in our nation’s decarbonization strategy,” said Jack Hellmann, CEO of G&W. “Through this partnership, we plan to transform the next generation of freight rail transportation by adopting advanced technologies that can eliminate emissions and increase rail utilization without requiring significant new rail infrastructure. The end result will be a cleaner environment, more competitive transportation for our nation’s industrial producers, and a freight rail system that remains the

most efficient in the world.” “This partnership with Carnegie Mellon University and Genesee & Wyoming further strengthens our efforts to decarbonize global rail transportation and will significantly increase freight rail utilization, efficiency and safety throughout the rail network,” said Rafael Santana, President and CEO of Wabtec. “The transportation sector is at a critical inflection point. With technologies providing increased battery and hydrogen power capacity, we have the potential to eliminate up to 120 million tons of greenhouse gas emissions per year in North America.” The first-generation FLXdrive, built in Erie, Pa., is an impressive machine. Earlier this year, the locomotive, as one unit of a three-unit lashup with two Wabtec AC4400s, performed in revenue operations during a three-month, 13,000-mile pilot in California on BNSF between Barstow and Stockton. Operating at 2.4 MWh (megawatt hours), it reduced overall fuel consumption by more than 11% across the entire locomotive consist, saving more than 6,200 gallons of diesel fuel and eliminating approximately 69 tons of CO2 emissions, according to Wabtec. The FLXdrive manages overall train energy flow and distribution through its Trip Optimizer system. Railway Age spoke with Wabtec project managers Bruce Bloomster and Chris Sheridan about the first-generation FLXdrive’s technical features, as well as those of the second-gen locomotive, currently in development, which will triple the first gen’s output to 7.2 MWh and is expected to reduce fuel consumption by up to 30%. The first-gen unit, GECX BEL44C4D No. 3000, which will be tested on CSX between Cumberland, Md., and New Castle, Pa., on the New Castle Subdivision, prior to entering service on the B&P hauling a 130-car manifest train, is a six-axle, two-truck locomotive with four powered axles, the center axle on each truck an idler axle. Traction power, which is equivalent to that of a Tier 4-compliant 4,400-hp diesel-electric with 144,000 pounds of starting tractive effort and 78,000 pounds of continuous tractive effort, is provided by 18,000 lithium-ion October 2021 // Railway Age 27

MOTIVE POWER

battery cells configured in 500 modules, each of which weighs 120 pounds. Those modules are subdivided into 20 “strings” of 25 modules (or 4,500 battery cells) each, with a BSC (battery string controller). Each powered axle utilizes 5 strings and has its own buss. Each string is air cooled via bottom-mounted fans; the entire battery “room,” which features a center walkway, is kept at a constant 74 degrees F with a roof-mounted Thermo King air conditioning unit. Failure of a single module shuts down an entire string, reducing power to the corresponding axle of 20%. Thus, unlike a dieselelectric locomotive where a prime-mover 28 Railway Age // October 2021

or traction alternator failure disables the locomotive, a string failure does not prevent the locomotive from operating at a reduced power level. “Thermal runaway” damage caused by battery cell failures is confined to a single module. Ask anyone who has driven an electric car like a Tesla, electric motors provide 100% torque, instantly. Thus, to prevent occurrences like couplers being pulled out of their carriers, the FLXdrive’s throttle response is “tuned to be like that of a dieselelectric, though it’s still a little quicker than a diesel,” with a “properly balanced load rate” and an output of 37 amp-hours. Battery charging while the FLXdrive

is operating occurs through regenerative dynamic braking. Stationary charging uses 480-volt lineside power and takes about 8 hours. Operating independently, the locomotive can provide 30 to 40 minutes of full electric power. Battery life is estimated at 5 years, which is when the batteries are expected to drop below 80% of full capacity. But that doesn’t mean they’re “dead.” They’re just not powerful enough for a locomotive application, and can be re-purposed for applications in a secondary market like stationary ground energy storage. Wabtec is investigating the possibilities. Beyond that, disposal of exhausted lithiumion batteries in an environmentally sound railwayage.com

William C. Vantuono

The charging port is located where the fuel tank on a diesel-electric locomotive would normally be.

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Your Chicagoland Supply Chain Competitive Advantage. East Chicago Transload (“ECT”), sister company to ERRT, offers: • 100 railcar transload spots • C a n t r a n s l o a d b u l k , l i q u i d , a n d hazmat products • Direct access through IHB to BNSF, UP, CSX, NS, CP • ¼ mile from IN-912 • 5 miles from I-80/94 all points east/west • <10 miles from I-65 all points north/south • Warehousing and outside storage East Chicago Rail Terminal (“ERRT”), offers: • 3.1 track-miles of fenced, secure, lighted, and safe facilities • East Chicago Rail Terminal is a class 3 common carrier • Direct access through IHB to BNSF, UP, CSX, NS, CP, and CN • Has spots for 200 railcars in storage • Railcar cleaning , and railcar repair services offered on-site

3444 Dickey Road East Chicago, IN 46312 | 219-804-0671 sales@eastchicagorail.com | www.eastchicagorail.com

MOTIVE POWER

William C. Vantuono

Chris Sheridan in the “battery room.”

manner is unclear at this point. The second-gen FLXdrive will be equipped with larger, heavier battery packs that will require a crane for removal and replacement, as they will be about 6 feet long by 5 feet wide by 18 inches deep and weigh several hundred pounds, compared with the first-gen’s approximate 3 feet by 18 inches by 6 inches, and 130 pounds. Cooling will be liquid, instead of air, and the locomotive will have outside walkways, rather than a battery room with a center walkway. Output will be 52 to 57 amp-hours. All six axles will be powered. A three-unit, 100% battery lashup is expected to be more powerful than an equivalent alldiesel-electric consist. Stationary charging, which is expected to require about 4 hours, will involve a section of high-voltage catenary and a roof-mounted pantograph on the locomotive. Wabtec expects the secondgen FLXdrive to be commercially available in 2023. The second-gen FLXdrive already has a customer. On Sept. 13, Australian iron ore

30 Railway Age // October 2021

railwayage.com

MOTIVE POWER mining company Roy Hill announced it will be taking delivery of a single unit. The company, with Australia’s largest single-ore mine in Western Australia’s mineral-rich Pilbara region, currently uses four Wabtec ES44ACi Evolution Series diesel-electric locomotives in a consist to haul unit trains that are typically 1.6 miles in length. The FLXdrive will replace one of the diesel locomotives to form a hybrid consist, and recharge during the trip through regenerative braking. The liquid cooling system is expected to withstand the Pilbara heat, where temperatures can reach 55 degrees C (130 degrees F). Based on the route and Roy Hill’s rail operations, the FLXdrive is anticipated to reduce the company’s fuel costs and emissions in percentage by double-digits per train, and reduce ongoing operational costs through maintenance spend. “Our analysis with Wabtec confirms the FLXdrive locomotive is ideally suited for our rail network,” said Simon Pascoe, General Manager of Engineering for Roy

Hill. “It has the horsepower to operate in a heavy-haul train consist pulling loaded railcars with 35,000 tonnes of iron ore, while at the same time reducing the entire train’s

the second-gen flxdrive will be equipped with larger, heavier battery packs and six powered axles. fuel consumption. The FLXdrive also is designed to function in the extreme heat of the Pilbara region.” “We are committed to transforming the

next generation of transportation by adopting advanced technologies that improve energy efficiency, lower operating costs, and improve our rail and mining network,” said Gerhard Veldsman, CEO of Roy Hill. “The FLXdrive locomotive will be the first for the region and the first for the mining industry, and will improve our rail operations from the mine to Port Hedland.” “This order demonstrates Roy Hill’s progressive and forward-thinking approach to the mining industry,” said Wendy McMillan, Regional Senior Vice President Australia and New Zealand for Wabtec. “By adopting this revolutionary technology in region, Roy Hill is pioneering new approaches to its operations that will benefit the company’s bottom line. The FLXdrive is a continuation of our growing partnership and shared vision to bring more efficient solutions to mining and rail industries.” “Looking to the future,” Wabtec says it plans to “accelerate the shift to alternative clean energy solutions, through zero-emission hydrogen-powered locomotives.”

We were awarded and it makes us feel proud Partner of the Year

Ferromex was recognized by Nissan North America with the Annual Supplier of the Year Award “Partner of the Year”.

Congratulations to our team and thanks to Nissan for your confidence in our company. railwayage.com

October 2021 // Railway Age 31

PASSENGER RAIL

NEW DIRECTION FOR THE MTA?

The New York Metropolitan Transportation Authority, free of Andrew Cuomo’s political micro-management, is under a new governor who has promised “hands-off.” What’s next?

ew York state’s Metropolitan Transportation Authority (MTA) is unique among transit providers in the United States. It carries roughly 40% of the

32 Railway Age // October 2021

nation’s transit riders on the subways and buses in New York City, the Staten Island Railway, Metro-North and the Long Island Rail Road (LIRR), although the agency only received 16% of the federal transit funding available for COVID-19

relief. It has its own Construction and Development unit, and its MTA Bridges and Tunnels unit is the successor to the Triborough Bridge and Tunnel Authority, which once supplied the money for legendary power broker Robert Moses to railwayage.com

William C. Vantuono

BY DAVID PETER ALAN, CONTRIBUTING EDITOR

PASSENGER RAIL

build highways and suppress transit for half a century. New York does everything in a big way, and that includes politics at the MTA. Since it was founded in 1965, the governor has controlled the agency by appointing his loyalists to six of the voting positions on the MTA Board. The mayor of New York City can appoint four, while the other four votes come from the suburban areas served by Metro-North and the LIRR. During his tenure of more than a decade, Andrew Cuomo ran the agency railwayage.com

with an iron fist and drew fire from rideradvocates for micro-managing it. When Mayor Bill de Blasio (who will leave office at the end of this year) complained that the city did not have sufficient control over the transit within its borders, Cuomo replied that de Blasio was welcome to run it without any state funding. Cuomo delivered a mixed bag to riders. Andrew Albert, First Vice-Chair of the Permanent Citizens’ Advisory Committee (PCAC) and the Transit Riders’ Council, told Railway Age, “It’s a testament to the importance of the MTA to the region and to the state’s economy that former Gov. Cuomo was so interested in the MTA. It’s the economic engine of the whole Northeast, which is the economic engine of the whole United States.” Cuomo was elected to a third term in 2018. At that time, nobody could have foreseen that he would be forced out of office and that his running mate, former Lieutenant Governor Kathy Hochul, would succeed him. Hochul is not only the first woman to hold the office, but also the first governor to hail from Western New York since 1910. She comes from Hamburg, a town near Buffalo whose only transit consists of three buses to downtown Buffalo at morning commuting hours and returning late in the afternoon. The local agency is the Niagara Frontier Transit Authority (NFTA), known locally as Metro, a typical transit provider for a mid-size city, with one light rail line and a relatively comprehensive bus network, but not going to Hamburg. She held local office in Erie County (Buffalo) and was elected to Congress for one term. For his second term, in 2014, Cuomo chose her as his running mate. Now, unexpectedly, she is calling the shots in New York, including at the MTA. Andrew Cuomo’s rise in politics was spectacular, and so was his downfall. His father, Mario, was governor from 1983 through 1994. Mario was widely respected, and some Democrats wanted him to run for President in 1992, but he did not launch a formal campaign. Andrew wanted to go further, and some Democrats considered him a potential candidate, especially considering his performance after the COVID-19 virus struck last year. His decisive tough-love

approach contrasted with Donald Trump’s, and he was widely seen as the action-oriented “tough dad” that the country needed. In April, shortly after the virus hit, a Siena College poll reported that he had a 77% approval rating. In 2019, he also made a controversial decision about transit that benefited the riders, but more about that later. This year, everything fell apart. Cuomo was accused of falsifying the number of nursing home residents who died from the virus, to make his performance look good. There were also allegations of official corruption. As he began to lose credibility, Cuomo also lost his strong-arm grip on legislators and other lower-level office-holders. Then 11 women accused him of sexual misconduct. He mounted a strong defense against those charges until Attorney General Letitia James issued a report that gave credence to the accusations. Cuomo gave up, resigned, and left office on Aug. 24. Now that Cuomo is out, Hochul is in. Before we speculate on what that could mean for transit managers and riders, it’s necessary to look at how the agency fared under Cuomo’s leadership. In total, it has been a mixed bag fraught with difficult challenges, as the system faced the COVID-19 virus. At this writing, the MTA reported that ridership is down 45.7% from 2019 levels on the subways and less on the commuter railroads that had once lost most of their commuters, but ridership is recovering. As ridership plummeted, so did revenue. The MTA’s deficit is measured in the billions of dollars. Rachel Fauss, a Senior Policy Analyst at Reinvent Albany, said it could balloon to $23 billion through 2024. The MTA survives, as do many other transit agencies, on federal assistance enacted by Congress as part of COVID relief acts. On the whole, it has been a rough ride, especially on the subways. The coronavirus hit the system hard, claiming the lives of approximately 170 employees at this writing. There were service cuts, too. Most of the trains on Metro-North and the LIRR have been restored, but ridership remains low, as plans to reopen many of the city’s activities and offices have been postponed due to the surge of cases caused by the Delta strain of the virus. October 2021 // Railway Age 33

PASSENGER RAIL Ridership is still far below pre-COVID levels, and the service cuts included eliminating overnight service for the first time since the subway began operating in 1904. The nighttime shutdown lasted slightly more than one year. It did not save money, because the trains continued to run without riders and the agency added some temporary bus routes during overnight hours. Through all of this and dating from before the virus struck, Cuomo took strong charge of the MTA, according to Andrew Albert. As a rider representative, he is a non-voting member of the MTA Board. That body has an arcane structure, with most conventional political appointees having full voting rights, while four suburban appointees share a single vote, and labor representatives and rider representatives have no vote at all. Randolph Glucksman, the non-voting rider representative from Rockland County, noted that the suburban representatives are known as “quarter-pounders” who come

from Putnam and Dutchess counties on the east side of the Hudson, north of Westchester, and Rockland and Orange counties, west of the river. Representa-

before he left, cuomo attempted to restrucure mta leadership, apparently to strengthen his control. tives from Westchester and the two Long Island counties (Nassau and Suffolk) each have a full vote. Glucksman also noted that all of

the non-voting members have relevant knowledge, and four of the six have experience working in the system. Glucksman himself had worked his way up from being a motorman and conductor in the subway system to the rank of Superintendent. A review of the biographies of the voting members found on the MTA website indicates two have similar relevant experience, and three others might have it. Before he left office, Cuomo attempted to restructure MTA leadership, although that did not include allowing labor or rider representatives to vote. Instead, he wanted to consolidate the positions of Board Chair and CEO of the agency, apparently to strengthen his control. The state Senate blocked the change, so it was not implemented. After this failed attempt, Cuomo appointed Janno Lieber, former head of the MTA’s construction and development arm, as acting Chair and CEO, effective July 31. Lieber has generally received high marks, and Albert expressed the hope that

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PASSENGER RAIL Hochul will keep him in the position. He added that Lieber showed respect for the rider representatives, even though they do not have voting rights, and said that he is a “good face” from the MTA to the public. Lieber has had a long career in real estate and construction management. Hochul has the power to replace all of Cuomo’s appointees. That includes Larry Schwartz, Cuomo’s former secretary, who was named in the Attorney General’s report on the accusations against Cuomo. Hochul was quoted as saying that she would not appoint anybody mentioned in that report. Linda Lacewell, Cuomo’s chief of staff and a lawyer who mounted his defense against the allegations of sexual misconduct, is gone. The other known Cuomo loyalist is State Budget Director Robert F. Mujica, who was not implicated. Ironically, it was Cuomo who backed a change that appointees would be considered “holdovers” as soon as the person who appointed them leaves office. Cuomo’s own appointees will now

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be caught up in that change. As she took office, Hochul came on strong, saying she would trust the “transit professionals” to make the right decisions

hochul said she will trust the “transit professionals” to make good decisions for the MTA. concerning the MTA and its policies. This is the sort of rhetoric that managers, riders and their advocates would normally cheer, but the actual consequences of that

attitude might be far more complex. One particular incident that benefited subway riders is a case in point. In 2019, Railway Age reported extensively on a plan to shut the NYCT L-train down for 15 months to repair the Canarsie Tunnels between Brooklyn and Manhattan’s 14th Street that were damaged by Hurricane Sandy nine years ago. Cuomo insisted that there had to be a better way to repair the tunnels, and he summoned the deans and senior faculty from the engineering schools at Columbia and Cornell universities to assess the situation. They recommended hanging new electrical and signal cables on the tunnel walls and covering the bench walls with fiber reinforced polymer (FRP; a protective material), rather than demolishing them. Many “old school” engineers and managers objected, including well-respected transit chief Andy Byford. Nonetheless, Cuomo got his way, and the Columbia/Cornell plan was implemented. As a result, the 15-month disruption was

October 2021 // Railway Age 35

PASSENGER RAIL averted. Service was reduced on weekends and part of the evening on weekdays, and bus service on 14th Street was augmented. The line ran normally at other times, and the city let out a figurative and collective sigh of relief. However, some advocates, including Albert, have questioned how long the repairs will last. Pat Foye was a transit professional with a long career at the Port Authority of New York and New Jersey, the MTA and elsewhere. As MTA Chair and CEO at the time, he criticized the big engineering firms and managers who opposed the Columbia/Cornell plan. He called them the “TIC,” for Transportation Industrial Complex. While Cuomo has often been criticized for being egotistical and bombastic, he used his power to prevent a long-lasting deprivation of essential transit on a line that had recently become popular in revitalized Brooklyn neighborhoods. The question is whether or not Hochul will buck the “transit professionals” who

suggest “old school” ways of doing things, rather than taking Cuomo’s approach of supporting a less-popular but more innovative and cost-effective solution to the same problem. Hochul came on strong the week before Labor Day, after record-setting rainfall from Hurricane Ida had f looded much of the subway system on Aug. 29. She directed the MTA “to do everything possible to mitigate the impact of tonight’s service disruptions,” a reasonable move for any elected official. Over time, though, it is unclear if she knows New York City and its suburbs on Long Island and in MetroNorth’s service area well enough to take an active and competent role in the MTA’s affairs, as Cuomo did. It is also unclear whether New Yorkers generally would appreciate the level of intervention that Cuomo practiced. Of course, incumbent management and the Board members she appoints will advise her, and so would her nominee for Lieutenant Governor, Brian Benjamin, who

comes from Harlem. It does not appear that she would defy the “transit professionals” the way Cuomo did when he brought the Cornell and Columbia engineers to Brooklyn for a second opinion about the L-train tunnels. There is also the issue of Congestion Pricing: imposing tolls on motorists who use their vehicles in Midtown Manhattan and further south. The purposes are to reduce traffic congestion and support the transit system with extra capital funds. The approach has worked well in such European cities as London and Stockholm, and Manhattanites generally like it. Most motorists don’t, especially those who live in the “outer boroughs” of Brooklyn, Queens, the Bronx and Staten Island. Neither do many in New Jersey, who already pay a toll to enter the city. The plan has not been enacted yet, but the MTA will need the money it is slated to bring. If Cuomo, who came from Queens, could not get the plan implemented, can Hochul, who spent most of

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It is unclear at this point whether New York Governor Kathy Hochul knows the MTA’s service territory well enough to take an active and competent role in the agency’s affairs.

her life in the other end of the state? So, the questions arise: On issues in addition to Congestion Pricing, will she learn enough about transit in New York City and its railroad-oriented suburbs to help steer the MTA in directions that will enable the system to recover from the effects of the COVID-19 virus and bring improvements for its riders? Will she be able to raise the money it will take to keep the transit going, especially after temporary COVID-related federal assistance runs out? Will she initiate any reforms at the MTA Board and management, particularly allowing representatives from labor and for the riders to vote on issues before the Board, as traditional political appointees are allowed to do? Given the animosity between Cuomo and De Blasio, will she be able to work effectively with Eric Adams, widely anticipated to be New York City’s next mayor, to take the city/state rivalry out of transit governance? Cuomo’s downfall occurred amazingly rapidly. Now that he is gone, the rider advocates we interviewed are hoping for better and more peaceful times at the MTA. Albert told Railway Age, “I think she’ll listen to all voices. I think her emphasis will be about climate change and making the system impervious to storms like Ida.” Glucksman was succinct. He said, “I hope she can help our transit. I wish her the best of luck.” Considering the MTA’s recent history, Kathy Hochul will probably need it. railwayage.com

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Technology Focus—M/W: Fastening Systems

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INNOVATIONS Rail fastening system technology continues to evolve, delivering a tight hold and longer track life in heavy-haul freight, high-speed passenger rail and transit applications. auge-holding capability. Resiliency. Noise reduction. Ease of installation and maintenance. Low life-cycle cost. Safety. Railroads depend on these qualities when selecting and installing new rail fasteners. To meet those requirements, suppliers continue to make incremental updates to their system technologies for heavy-haul freight, high-speed passenger and transit applications. How has the fastening system market evolved over the past 10 years? “Elastic fastening systems continue to gain popularity for their high gauge widening resistance and rail rollover prevention, especially on high-degree and high-grade curves,” says Yin Gao, Senior Engineer II at Transportation Technology Center, Inc. “Also, a hook bolt system used between ties on bridge decks improves safety and productivity for installation.” Designs and materials are also advancing, 38 Railway Age // October 2021

Gao tells Railway Age. “Insulators for concrete ties can be a good example,” he says. “TTCI tested some types of insulators, and they failed relatively quickly due primarily to sun exposure. We discussed the situation with the suppliers. The new insulators with improved formulas performed well. Another example would be rail seat pads for concrete ties. Rail seat pads continue to improve to reduce rail seat deterioration. In addition, new rail pad designs for concrete ties have been used for quick tie repair.” Research and development will continue to focus on system improvements, Gao says. “Improved fastening systems could not only improve fastening components, but also could reduce the maintenance of other trackwork components and train subsystems as well,” he points out. “In addition, with more advanced data collection systems and data analytics tools, site-specific data will be used to determine what to install and how and

when to perform maintenance.” Railway Age contacted fastening system suppliers to find out about their latest technologies as well as market conditions. “The market is still very strong with our fastening products in demand worldwide,” Pandrol says. Customers are “looking for innovation, availability and easy application.” And some manufacturers, like Progress Rail, “foresee a more robust outlook” with the federal government ready to target investment in infrastructure. Following is a roundup of supplier offerings. HOWMET Howmet’s Huck 360, C50L and BobTail fasteners can be used in a variety of track applications, such as insulated joints; gauge plates; and crossings, including RBM frogs and diamonds. They offer “uniform clamp power and unmatched vibration resistance that leads to reduced flexing and extended railwayage.com

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Technology Focus—M/W: Fastening Systems resiliency, noise and vibration mitigation, and electrical isolation,” notes McBrayer. Now under development at L.B. Foster are specialty coatings for both DF fastener applications—to help extend fastener life by preventing rust and corrosion—and third-rail insulators—to help prevent dirt and debris build-up, according to McBrayer. The company is also at work “prototyping and qualifying a high resilient DF fastener in a standard DF fastener footprint,” McBrayer says “This new product line will be ideal for use in areas where greater resilience, noise and vibration mitigation is desired such as in transit stations, on bridges and overpasses, and in residential areas. It is designed for use in new construction, as well as retrofits and maintenance replacement projects, as it offers the same anchorage locations that a standard DF fastener offers.”

track and crossing life,” Howmet says. Because they don’t come lose, “maintenance intervals are greatly extended and rail lines benefit from reduced down time,” the manufacturer adds. In conventional nut and bolt installations, gaps between nut and bolt threads may cause loosening, Howmet says. To help eliminate gaps, the company’s HuckBolt design features “full metal-to-metal contact between the swaged on collar and the pin.” The swaged connection also helps resist vibration. In addition, HuckBolts have up to 30% more bolt cross-sectional area, and up to five times more root radius than regular bolts, depending on the bolts used, resulting in a “much stronger and more secure joint,” Howmet tells Railway Age. The company is focusing on lockbolts in one-inch or greater diameters. The smaller diameter options had a lower value proposition so they were retired recently, according to Graham Musgrove, Manager, Marketing and Product-HFS Industrial. “We decided to refocus and repurpose that additional production capacity, engineering resources and inventory on other product lines for not only the rail industry, but also other strategic industries for us.” 40 Railway Age // October 2021

L.B. FOSTER While the pandemic has delayed procurements for some transit authorities due to employee availability, others have taken advantage of track shutdowns to expedite maintenance projects, General Manager, Transit Products Sarah McBrayer tells Railway Age. But the availability of raw materials, labor shortages and freight delays have all extended material procurement lead times. Customers in the market are looking for “more high-resilient options, compact designs and corrosion-resistant coatings,” according to Sheen Fong, Director-Technical Sales, Transit Products. In addition, they want “higher resiliency products in the same footprint as existing direct fixation plating systems,” McBrayer says. “These can be in both two-anchor and four-anchor footprints.” Also important: Noise and vibration mitigation, corrosion control, ease of maintenance, and fewer assembly parts. Chicago Transit Authority (CTA) has installed L.B. Foster’s model F51R4, a direct replacement for the four-anchor direct fixation plating system, and is currently implementing it as part of its Red Purple Modernization project. “This DF fastener offers superior

PROGRESS RAIL “The market has become more competitive in the past few years, which is good for us and our customers,” Progress Rail tells Railway Age. “Increased competition showcases how we create new products, to create value for our customers, distinguishing us from our competition.” An example of this, the company says, is its ADFF55 fastener. Introduced a few years railwayage.com

Lewis Bolt and Nut Company

Lewis Bolt and Nut Company’s G2™ Evergrip Screw Spike for freight rail and transit.

LEWIS BOLT AND NUT COMPANY Lewis Bolt and Nut Company’s most recent product launch is the G2™ (or second generation) Evergrip Screw Spike for freight railroads and transit agencies, according to George Apostolou, AVP, Sales. The G2 offers a “significant increase in fatigue resistance” due to its longer, stronger full body shank, as well as new, “tie-grabbing barbs designed to prevent back out,” he says. With this design, the fins/ barbs are located lower in the screw, “allowing us to dramatically strengthen the screw spike in its most critical area, which is a couple of inches in the shank below the head of the screw spike.” One of the advantages of the G2 is its steep thread angle that allows it to be turned or driven in; it only takes 2-1/2 turns, from start to finish, to install it, according to the company. The G2 is available with a double or single head design for easy removal. Lewis Bolt and Nut Company continues to work on incremental product improvements for customers, and has been looking internally to make its manufacturing process more efficient, Apostolou says.

Technology Focus—M/W: Fastening Systems ago, it is “a more economical solution to our legacy high resilient DF, the Egg Type DF. The ADFF matches the noise and vibration attenuation performance of the Egg DF, while also matching anchor bolt patterns and rail seat elevations of standard, systemwide DF. This makes construction less complicated and economical.” Progress Rail also introduced the DF Block system. “Especially useful in tunnels, the contractor no longer needs to embed rebar, form plinths, handle miscellaneous hardware, or perform the post-lifting procedure to level concrete and fill voids under the footprint of the DF units,” the company explains. “The DF Block provides a factory-finished surface, with the DF and hardware already attached as part of the system.” The contractor clips the DF Block system to the rails, sets the rails to the final position and elevation, and pours the final concrete, according to Progress Rail. The company is currently supplying systems for projects such as the Los Angeles County Metropolitan Transportation Authority’s Westside Purple Line, and Sound Transit’s

When buying fastening systems, L.B. Foster customers look for noise and vibration mitigation, corrosion control, ease of maintenance, and fewer assembly parts.

Federal Way and E130, “The Floating Bridge”; and it has material supply contracts with CTA, Washington Metropolitan Area Transit Authority, and New York Metropolitan Transportation Authority. “On the freight side, we continue to deliver long-lasting fastening solutions for maintenance and expansion of

concrete tie installation across North America, as well as some international projects, which we expect to announce soon.” “Consistency and rapid supply” are among the top customer requirements, according to Progress Rail. “With our state-of-the-art lab, we can perform multiple test programs,” the

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Technology Focus—M/W: Fastening Systems installation and reliability,” the company tells Railway Age.

company adds. “This ensures product testing is completed on time” and allows shipments to stay on schedule. “Progress Rail continues to invest in fastening technology solutions that add value to our customers in terms of longevity, ease of

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VOSSLOH NORTH AMERICA Vossloh has had “sustained success” introducing transit fastening systems to the North American market over the past few years, officials tell Railway Age, and it has a “healthy” backlog of projects. Adoption of Vossloh’s captive elastic fastener among transit agencies continues. “Using lessons learned from extensive experience partnering with the Class I freight railroads in meeting their rail fastening system needs, the performance advantages of the Vossloh fastening system—high multidirectional fatigue limits on tension clamps, secondary stiffnesses, and optimized rail pad geometries—have been brought over to meet the mass transit market demand,” officials say. All of the company’s fastening systems are delivered to a work site preassembled and are said to require minimal labor to complete installation after the rail is delivered. Vossloh has developed and delivered rail

and turnout fastening systems for more than 10,000 miles’ worth of high-speed track worldwide over the past 50 years. “Many projects have had unique requirements, spurring innovation and pushing the envelope for what a rail fastening system can accomplish; therefore, Vossloh is well-equipped to partner to meet their unique needs as the industry evolves in North America and the focus turns to high speed rail,” Vossloh officials say. Currently, Vossloh is providing concrete tie fastener sets for several mass transit projects across North America. Among the most recent Vossloh products developed to meet railroad needs is the cellentic rail pad. “Cellentic is a micro-cellular EPDM-based elastomer with a closedcell structure, ensuring high elasticity and load absorption within its own structure,” Vossloh officials say. “The result: very little deformation in a permanently elastic layer, reducing loads, vibrations and track maintenance. The cellentic intermediate layers have been used to optimize elasticity in ballasted and slab track.”

book review

THE STEAM LOCOMOTIVE ENERGY STORY: How These Locomotives Used Energy and What Was Done to Make Them More Efficient By Walter Simpson The Chesapeake & Ohio Historical Society, Inc. Hardcover, 144 pages, $44.95. Available from Simmons-Boardman Books, w w w. t r a n s a l er t . com / c g i - bi n / de t a i l s . cgi?inv=BKSLES&cat=8. Among railroaders and railroad enthusiasts, and even those who aren’t, who doesn’t love steam locomotives? Walter Simpson’s new book, The Steam Locomotive Energy Story: How These Locomotives Used Energy and What Was Done to Make Them More Efficient, offers readers the chance to crawl into the inner workings of the locomotives 44 Railway Age // October 2021

that were the primary source of U.S. railroad motive power for well more than a century, from crude beginnings in the early 19th century through the Super-Power era of the 1920s through 1940s and short-lived experiments with steam turbines, to the end of regular revenue service around 1960. Detailed technical drawings, scientific graphs and charts cover everything from smokeboxes to superheaters, boilers to fireboxes, drivers to side rods, safety valves to poppet valves, tenders to stokers, etc.—no detail is overlooked. “It is, in this reviewers’ mind, the best discussion of steam locomotive efficiency ever done,” says Tom Dixon of the C&O Historical Society. “Simpson uses original sources from a variety of railroads, as well as authoritative books and articles by the

mechanical engineers who worked so hard to make the steam locomotive ever more efficient, especially through the last four decades of steam operation. His conclusion is that a good steam locomotive could convert 7% of its fuel to mechanical energy, and most didn’t reach that level, while the very best got only up to the 8% range. A typical dieselelectric locomotive, by contrast, produces around 30%-35%. And, for further comparison, an electric generating plant is 33% efficient, and an automobile about 25%. “Simpson understands and documents how the steam engine builders and railroads worked hard to increase efficiency. Yet, the very design of the machine prevented much increase in capability, even in the much heralded Super Power locomotives, post-1925. “The study is a scholarly review, fully footnoted with an extensive bibliography, so it should assume an important place in the literature of steam power. It is, at the same time, a highly readable and understandable discussion that the ordinary person can readily appreciate and enjoy. It is a visually pleasing book as well as an authoritative one. The book is well-illustrated with great photos both in black and white and color showing all types of steam locomotives at work. “This reviewer has read hundreds of books and probably thousands of articles about steam locomotives, and has written several himself, but this book gave me new insights and understanding I never had in 52 years of being involved in railroad history.” Simpson’s book dives into a less-wellknown aspect of steam locomotives: attempts to design and build a “modern” locomotive. In the book’s epilogue, “Advanced Steam – The Quest for a High Efficiency Steam Locomotive,” the author describes initiatives like the Red Devil, a 1981 retrofit of a South African Railways Class 26 4-8-4 with GPCS (Gas Producing Combustion System), double Lempor exhausts, Porta water treatment and other improvements. He also covers Ross Rowland’s long-abandoned American Coal Enterprises ACE 3000 3,000-hp reciprocating steam locomotive, which, if it had been built, would have incorporated such features as GPCS, draft produced by steampowered fans, four-cylinder compound expansion, connected duplex drive, dieseltype piston rings, and microprocessor controls, including multiple-unit capability. Fascinating stuff. Well worth adding to your railroad library. – William C. Vantuono railwayage.com

People SIU LING KO

MTA New York City Transit HIGH PROFILE: Siu Ling Ko, a 34-year veteran of MTA New York City Transit’s Subway Car Equipment division, has been named Vice President and Chief Mechanical Officer of the division, which is responsible for maintaining and overhauling the agency’s massive rapid transit car fleet and track maintenance vehicles. She is the first woman in this position. Ko will provide executive oversight for the maintenance, repair and overhaul of NYCT’s 7,092 rapid transit cars, and for 24/7 operations of the agency’s 13 maintenance-of-way vehicles, two railcar overhaul shops and locomotive shops. Ko will also oversee Car Equipment’s Scheduled Maintenance System and maintenance material forecasts, “all of which have contributed to improved reliability and MDBF (mean distance between failures),” NYCT noted. Ko started her career at NYCT as an Associate Engineering Technician after receiving her degree in electrical engineering from the New York University Polytechnic School of Engineering (now called NYU Tandon School of Engineering) in Brooklyn. She has held multiple positions. As Assistant Chief Mechanical Officer-Quality Assurance and New Car Warranty, Ko provided direction on all maintenance, overhaul shop and new car procurement audits, all new car contract warranty programs and technology services that report key statistics on subway car performance, maintenance and repair. “I am honored to accept this role,” said Ko. “Riders are returning to the subway system, and our team is as prepared as ever to deliver world-class subway service for millions of New Yorkers. I’ve spent more than 30 years with New York City Transit working to improve maintenance and reliability and I am excited to continue that work.” “Having started with Siu in the 1980s as junior engineers in Car Equipment, I know first-hand her wealth of experience and knowledge makes her uniquely qualified for this leadership role,” said Craig Cipriano, NYCT interim President. “Her decades of experience will help move us toward our goal of making subways faster and more reliable. Her appointment as the first woman to serve in the role of Chief Mechanical Officer furthers our commitment to diversify our leadership ranks and create opportunities for all.” “Having worked with Siu, I know her to be a strategic and innovative thinker, broadening the responsibility of what the organization can achieve,” said Demetrius Crichlow, NYCT Senior Vice President of Subways. “She knows first-hand the value of aspiring and working hard to achieve personal goals. She is rooted in Car Equipment, and has worked to strengthen those around her through coaching, mentoring and professional development. She is adept at communicating and relating to all levels of the organization, allowing for more inclusive ideas and practices for meeting our goals.”

ari Gonzales is the new leader of Transportation Technology Center, Inc. (TTCI); the Board of Directors selected her following nearly three months of service as acting President. Gonzales, a Pueblo, Colo. native, succeeds Lisa Stabler, who announced her retirement in June after more than a decade at TTCI, the wholly owned Association of American Railroads (AAR) subsidiary. In her new role, Gonzales “will spearhead the organization’s long-term strategic planning to ensure it can continue to fulfill its critical role as a world-renowned expert serving the rail industry,” TTCI said during the Sept. 22 announcement. A nearly 20-year TTCI veteran, Gonzales served previously as Vice President and Chief Financial railwayage.com

Officer. She started at TTCI in 2000 as a student intern and was hired full time in 2002 as a research engineer upon completing her degree in mechanical engineering from the Colorado School of Mines. She earned a master’s degree in business administration from Regis University, Denver in 2015. Gonzales was the inaugural candidate for TTCI’s Railroad Exchange Program in 2012, spending a year with BNSF in Fort Worth, Tex., as part of the Class I railroad’s Condition Based Maintenance team. Upon her return to TTCI, she managed the industry’s senior technical committee, the Equipment Engineering Committee, and revamped TTCI’s Internal Research and Development (IR&D) program. She has authored or coauthored

more than 25 technical publications. In addition, Gonzales is the Education Chair for the League of Railway Women and serves on several community boards. American Industrial Transport, Inc. (AITX) has named Kurt Higginbotham as President, effective Oct. 1, 2021. “Kurt Higginbotham has a clear vision to drive growth through enhanced products and services, data innovations, and responsive teams,” AITX said. “With more than 30 years’ experience as an entrepreneur, innovator, and owner of railcars and railcar services, he brings a tested ability to anticipate and lead in the ever-more-dynamic market of rail and industrial transport. He served as Founder, President and CEO of Appalachian Railcar Services (ARS), a pioneering solution-provider across repair networks, railroad operations, transloading and logistics. Through Higginbotham’s leadership, ARS and its business entities scaled its offering to more than 30 locations, an average of 25% yearover-year growth.” Joining Higginbotham is Sean Hankinson as Chief Commercial Officer. AITX welcomed Hankinson with its acquisition of The Andersons’ leasing business. Higginbotham and Hankinson join Melanie Connellee, AITX Chief Financial Officer/Chief Operating Officer. The Sound Transit Board on Sept. 23 voted not to approve a full one-year contract extension for CEO Peter Rogoff. Chair Kent Keel said that after more than six years of service, Rogoff recently informed Board members that “he did not foresee remaining in his role beyond the end of 2022.” Keel said he and others did not believe they should wait until 2022 to start searching for a new leader of the transit system serving the Seattle metro area. Keel, who is also a Councilmember for University Place, Wash., said in a statement: “Given the volume and intensity of current and upcoming work and the agency’s needs and interests, the Sound Transit Board has exercised its discretion to proceed immediately to initiating a national search to select the agency’s next successful leader. Now is a strategic time to identify our next CEO ahead of work to open light rail to the Eastside in 2023 and to Lynnwood, Federal Way and Downtown Redmond in 2024. Peter has agreed to remain in his position until the second quarter of 2022 [through May 31, 2022] to assist in an orderly transition.” October 2021 // Railway Age 45

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46 Railway Age // October 2021

RAIL From Railway Age, RT&S and IRJ GROUP NEWS

ROUND-UP of NEWS STO

RAILWAY AG

railwayage.com

Ad Index COMPANY

PHONE #

AITX

FAX #

URL/EMAIL ADDRESS

PAGE #

AITX.com

800-489-9888

CIT

212-461-5781

212-461-5632

James.Spencer@cit.com

DAVID J JOSEPH COMPANY

513-419-6200

513-419-6221

txs@djj.com

EAST CHICAGO RAIL TERMINAL

219-804-0671

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FREIGHTCAR AMERICA

312-928-0850

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525552463700

https://www.ferromex.com.mx/

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glippard@lbfoster.cominfo@

GRUPO MÉXICO TRANSPORTES HATCH LTK L B FOSTER COMPANY

412-928-3506

412-928-3512

MESSE BERLIN GMBH

NEW YORK AIR BRAKE

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315-786-5676

Janice.Pfeil@nyab.com

PLASSER AMERICAN CORP

757-543-3526

757-494-7186

plasseramerican@plausa.com

24-25

POWERRAIL INC

570-883-7005

570-883-7006

Sales@ePowerRail.com

PROGRESS RAIL A CATERPILLER CO

256-505-6402

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18,39

RAILWAY EDUCATIONAL BUREAU

402-346-4300

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bbrundige@sb-reb.com

42,43,C3

RELAM INC

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SIEMENS MOBILITY

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SMBC RAIL SERVICES LLC

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TRAINYARD TECH LLC

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UNION TANK CAR COMPANY

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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 Jerome Marullo 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

SCANDINAVIA, SPAIN, SOUTHERN GERMANY, AUSTRIA, KOREA, CHINA, INDIA, AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, RUSSIA, EASTERN EUROPE BALTIC STATES, RECRUITMENT ADVERTISING Simone Fahr +01149 175 2411426 sfahr@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 Frank Rose 917-856-1808 frose@sbpub. com

AILWAY GE October 2021 // Railway Age 47

Perspective: ASLRRA

Let Us Hope That Good Sense Prevails

n 2017, the previous Administration dubbed the week of June 5 as “Infrastructure Week” as part of an effort to promote its $1 trillion infrastructure plan. Seven times in the following three and a half years, that Administration declared that infrastructure would be the theme of the week, only to see those plans thwarted in one fashion or another each time. As The New York Times eventually opined, “This has become a long-running joke where Infrastructure Week is less a date on the calendar than it is a Groundhog Day-style fever dream doomed to be repeated.” Today though, it appears it is no joke. Lots can still go wrong, and please knock on wood as you read this, but Congress appears to be on the verge of finally enacting a significant infrastructure package that will benefit the entire American economy, most certainly including freight rail and the tens of thousands of customers we serve. For short lines, the highlight of the bill (technically, the Infrastructure Investment and Jobs Act, IIJA) would be a dramatic increase in the CRISI grant program, to a minimum of $1 billion per year guaranteed over each of the next five years. That compares with the current FY 2021 funding level of $375 million. Short lines would still compete for that funding with other applicants and rail projects; however, this federal program is unique in that short lines are directly eligible applicants, and our track record competing for these grants is pretty good. Since CRISI grants were first approved in 2017, 84 short lines have received more than $520 million in funding. In addition to CRISI, the five-year bill if passed would include $8 billion in funding for the INFRA program, with an increase in multi-modal f lexibility and an expanded small project set aside; $7.5 billion in funding for the RAISE program (successor to BUILD and TIGER); $3 billion for a new grade separation program; $1.2 billion in continued funding for the Section 130

48 Railway Age // October 2021

grade crossing program; $2.2 billion for a port infrastructure program in which land-side rail projects are eligible; and $7 billion for the state freight formula program with triple the multi-modal f lexibility of the current law. Taken together, to use a scientific term, that’s a lot, and it will allow many short lines to tackle some of their more expensive and otherwise financially out-of-reach railroad projects like bridge replacements, major steel rail replacements, and reviving out-ofservice track. Given that all of these programs except CRISI require a public entity to be the applicant, and even with CRISI most successful applications involve extensive public-partner relationships, now is the time for short lines to step up communication and relationship building with relevant government partners—state DOTs, regional transportation authorities, ports, local units of government, and state and local elected officials. The additional multi-modal f lexibility provided in the $7 billion freight formula program makes a good working relationship with state DOTs particularly important as, in addition to partnering on federal applications, they may now also have the ability to increase existing or create new state-based grant and/or tax programs. Equally important, short lines should actively engage shippers in conversations about projects that could help those customers grow their businesses. When shippers, short lines and a public entity partner on applications, it is powerful and persuasive. ASLRRA recently selected the winners of our annual Business Development Awards. All four of these short lines— Iron Horse Resources’ Santa Teresa Southern Railroad, Lake State Railway, Pan Am Railways, and R.J. Corman’s Carolina Lines—put together impressive partnerships with shippers and state and local officials to leverage public funds, secure the necessary permitting and right-of way access, and build

community support for significant infrastructure projects. All four also understood that the strongest and most useful partnerships are built over time, not overnight. I encourage short lines that want to pursue these expanded funding programs to look at the creative ways these companies laid the groundwork in pursuit of their projects. See aslrra.org/BusDevAwards. The politics surrounding this infrastructure bill are complicated by a simultaneous push for a much larger partisan reconciliation bill that proposes $3.5 trillion in spending on what is being billed as “human infrastructure,” to be mostly offset by a variety of individual and corporate tax increases and collection efforts. While it is possible that the parties will be unable to get to “Yes” on anything and the entire effort falls apart, the physical infrastructure bill has unusual bi-partisan support and has progressed further and faster than anyone predicted at the beginning of the year. Let us hope that good sense prevails, and that 2021 marks the beginning of an Infrastructure Decade that involves actually building infrastructure, rather than more Groundhogs emerging to just talk about it. ASLRRA’s Annual Conference will be held in Phoenix, Ariz., Nov. 17-19. The conference will have more than 38 education sessions, including sessions focused on Congressional actions and grant funding. Registration information can be found at aslrra.org/ASLRRA2021Conference.

Chuck Baker President ASLRRA

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