September 2014 Railway Age by Railway Age

ailway ge R A

September 2014 | www.railwayage.com

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LOCOMOTIVES: IS LNG THE NEXT GENERATION? TRUCK COMPONENTS: A TECHNICAL AND COMMERCIAL BALANCING ACT TIME- AND MONEY-SAVING M/W MACHINES METRA: CUSTOMER-FOCUSED IN CHICAGOLAND

RailwayAge

SEPTEMBER 2014

visit us at www.railwayage.com Features Locomotives: Is LNG the next generation?

A balancing act

Metra: Customer-focused 45 Saving time and money

Passing the acid test

Crude by rail liability

Wheel failures examined

Why BLET is in the catbird’s seat

News/Columns From the Editor

Update

Watching Washington

Financial Edge

Departments Industry Indicators

Industry Outlook

Market

People

100 Years Ago

Meetings

Products

Advertising Index

Professional Directory

Classified

37 ON THE COVER BNSF’s EMD-powered LNG test train at TTCI. Photo courtesy BNSF Railway

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 215, No. 9. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print or Digital only versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Foreign $239.00 (U.S. funds) per year/$397.00 for two years for Air mail delivery. When ordering Both Print and Digital: $150.00 per year/$227.00 for two years in the U.S., Canada, and Mexico; $208.00 per year/$296.00 for two years, foreign. Foreign $308.00 (U.S. funds) per year/$496.00 for two years for Air mail delivery. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2014 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 1172, Skokie, IL 60076-8172, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 00338826.

September 2014 RAILWAY AGE 1

RailwayAge

From the Editor WILLIAM C. VANTUONO

Transformational events, 184 years apart

otive power has come a long, long way from the Baltimore & Ohio’s Tom Thumb. This tiny-by-today’sstandards, anthracite-coal-burning, 1.4-hp creation was the first American-built steam locomotive used on a common-carrier railroad. Designed and built by Peter Cooper in 1830, it was meant to convince the owners of the newly formed Baltimore and Ohio Railroad to switch from horse power (literally) to steam locomotives. The Tom Thumb’s claim to fame is an impromptu race, which it lost. As the story goes, on Aug. 28, 1830, the driver of a passing horse-drawn passenger railcar challenged Cooper and his strange-looking, smoke-belching vehicle to a race. Challenge accepted, the Tom Thumb was easily able to pull well ahead of the horse—until the belt slipped off its blower pulley. Without the blower, its vertical boiler could not draw adequately, and the locomotive ran out of steam, allowing the horse to pass it and win the race. Despite the humiliating defeat, the railroad realized that the four-wheeled Tom Thumb was superior in performance to its four-legged rival. The demonstration was considered successful, and so in 1831 the B&O fully committed itself to the use of steam locomotion and held trials for a working engine. The industry never looked back.

In this issue of Railway Age—which, by the way, traces its earliest roots to 1832 and antecedent publication American Rail Road Journal—we take a look (p. 28) at what could become the future of motive power: locomotives powered by liquefied natural gas. Like anthracite coal, the “clean coal” of its day, LNG is a fossil fuel. In great abundance in North America, it’s much less expensive than diesel fuel (at least for the foreseeable future) and burns more cleanly. Diesel fuel at present is running close to $4.00 per gallon. The equivalent amount of energy generated by LNG costs about 50 cents. So, even if retrofitting a locomotive to burn LNG adds 50% to its cost, and that’s including the price of a fuel tender, the economics still appear to be favorable. The price premium should diminish as economies of scale take hold. BNSF Railway has taken the lead in LNG locomotive testing. Two units, one each from EMD and GE Transportation, have completed trials at TTCI and are now preparing to undergo several months of realworld revenue-service testing in the West. If the results are favorable, LNG-fueled locomotives could very well be “a transformational event” for BNSF, and indeed, for the industry, in the words of Matt Rose.

EDITORIAL AND EXECUTIVE OFFICES Simmons-Boardman Publishing Corp. 55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com DOUGLAS JOHN BOWEN, Managing Editor dbowen@sbpub.com LUTHER S. MILLER, Senior Consulting Editor lmiller@sbpub.com CONTRIBUTING EDITORS: Roy H. Blanchard, Lawrence H Kaufman, Bruce E. Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Creative Director: Wendy Williams Art Director: Sarah Vogwill Corporate Production Director: Mary Conyers Production Manager: Lily Man Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney WESTERN OFFICES 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Jennifer Nunez jnunez@sbpub.com George Sokulski, Associate Publisher Emeritus gsokulski@sbpub.com INTERNATIONAL OFFICES 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, Keith Barrow, Kevin Smith CUSTOMER SERVICE: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 curt.ciesinski@parsintl.com

Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, Railway Age,PO Box 1172, Skokie, IL 60076-8172, or call toll free 1-800-895-4389. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of SimmonsBoardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:

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RAILWAY AGE

September 2014

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Industry Indicators TRAFFIC ORIGINATED CARLOADS

SHORT LINE AND REGIONAL TRAFFIC INDEX FIVE WEEKS ENDING AUG. 2, 2014

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

JULY ’14 95,126 3,756 46,663 29,486 150,065 78,589 554,246 7,845 18,006 31,818 43,061 19,123 55,057 21,130 83,241 121,492 26,803 43,510 17,141 25,653 1,471,811

JULY ’13 80,158 3,712 43,638 31,229 145,639 65,560 563,710 7,448 15,519 32,282 32,654 19,259 51,612 20,341 61,249 104,802 26,339 42,101 17,665 20,042 1,385,019

% CHANGE 18.7% 1.2% 6.9% -5.6% 3.0% 19.9% -1.7% 5.3% 16.0% -1.4% 31.9% -0.7% 6.7% 3.9% 35.9% 15.9% 1.5% 3.3% -3.0% 28.0% 6.3%

405,737

373,223

8.7%

COMBINED U.S./CANADA RR

1,877,548

1,758,242

6.8%

INTERMODAL

FIVE WEEKS ENDING AUG. 2, 2014

CARLOADS

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 & Nonferrous Scrap All Other Carloads

MAJOR U.S. RAILROADS BY COMMODITY TRAILERS CONTAINERS TOTAL UNITS

JULY ’14 141,343 1,144,817 1,286,160

JULY ’13 138,439 1,080,197 1,218,636

% CHANGE 2.1% 6.0% 5.5%

8,578 289,634 298,212

8,235 263,092 271,327

4.2% 10.1% 9.9%

149,921 1,434,451 1,584,372

146,674 1,343,289 1,489,963

2.2% 6.8% 6.3%

COMBINED U.S./CANADA RR TRAILERS CONTAINERS TOTAL COMBINED UNITS

Source: Monthly Railroad Traffic, Association of American Railroads

AVERAGE WEEKLY U.S. RAIL CARLOADS: ALL COMMODITIES (not seasonally adjusted)

% CHANGE 4.2% 8.9% 25.8% -4.1% 13.2% -2.8% 11.4% 24.2% -1.6% 4.0% 32.0% -7.1% 1.0% 11.3% 3.1% 6.6% 5.2%

JULY 2014 - 407,016 JULY 2013 - 381,416 320,000 330,000 340,000 350,000 360,000

370,000 380,000 390,000 400,000 410,000

RAILROAD EMPLOYMENT, CLASS I LINEHAUL CARRIERS, JULY 2014 (% CHANGE FROM JULY 2013)

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED JULY ’13 47,004 23,077 28,087 11,971 22,289 7,390 10,349 6,883 24,258 11,233 2,234 2,267 21,000 13,014 47,672 10,845 91,843

TOTAL CARLOADS, JULY 2014 VS. 2013

CANADIAN RAILROADS ALL COMMODITIES

ORIGINATED JULY ’14 48,989 25,121 35,333 11,479 25,242 7,180 11,526 8,548 23,873 11,686 2,949 2,105 21,216 14,480 49,147 11,561 96,581

BY COMMODITY

Transportation (train and engine) 68,730 3.82%

Executives, Officials, and Staff Assistants 9,973 1.23%

Professional and Administrative 14,365 1.38%

TOTAL EMPLOYEES: 167,138 % CHANGE FROM JULY 2013: 1.94% Transportation (other than train & engine) 6,743 (-0.62%)

Maintenance of Equipment and Stores 29,975 1.82%

Maintenanceof-Way and Structures 37,799 (-0.43)%

Source: Surface Transportation Board

EMPLOYMENT UP FROM YEAR-AGO, PRIOR-MONTH PERIODS Figures released by the Surface Transportation Board show Class I total railroad employment rose 1.94% in mid-July 2014, measured against mid-July 2013, and also was up 0.6% from mid-June 2014. Transportation (train and engine) once more surged ahead, up 3.82% year-over-year and up 1.18% from the prior month. Two categories fell modestly from July 2013, while only Professional and Administrative declined from June 2014, down 0.5%. 6

RAILWAY AGE

September 2014

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Industry Outlook

Chronic laxity by Canada’s transportation regulator has been identified by the country’s accident investigator as the primary underlying cause of the July 6, 2013 derailment and explosion at Lac-Mégantic, Quebec, of a Montreal, Maine & Atlantic train carrying 7.7 million liters of mislabeled crude oil from North Dakota’s Bakken shale formation to Irving Oil’s refinery at Saint John, N.B. Aside from advising Transport Canada to meet its responsibilities as national rail regulator, Canada’s Transportation Safety Board had just one new recommendation in its final investigation report: that parked locomotives trailing dangerous goods be secured by chocks, derailers, or advanced braking systems. Current regulation does not require the sort of physical restraint that would have prevented the Lac-Mégantic runaway.

The proximate causes identified by the TSB were poor locomotive maintenance and inadequate train securement, for which the safety board blames the now-defunct railway company (since taken over by Fortress Investment Group and re-started as the Central Maine & Quebec Railway). The basic facts, said TSB Chair Wendy Tadros, are: “A crude oil train parked on a main track on a descending grade, with the lead locomotive running and seven hand brakes set. A fire begins in an engine that had been causing problems for days. Emergency responders shut off the engine, but then the air holding the locomotive brakes leaks off. Without enough force from the hand brakes, the train begins its tragic descent downhill.” But, Tadros continued, employee responsibility is the last line of defense in railway safety, and not one that can substitute for management supervision and government oversight. MM&A was weakly managed, she said, and the federal regulator did little to police it. Like the FRA in the U.S., Transport Canada is part of the country’s executive branch, under the direct control of the governing party. “If the guard dog doesn’t do its job, then indeed it is to blame,” said TSB Chief Operating Officer Jean Laporte. The TSB had earlier issued emergency interim recommendations

governing railway operations, each of which was rapidly implemented by Transport Canada, which previously had been slammed in separate reviews for not doing its job by the country’s auditor general and by its information commissioner. The interim recommendations included enhanced standards for DOT 111 tank cars, requirements for railways to conduct safety-driver route planning, and for Emergency Response Assistance Plans to be developed for the rail transportation of liquid hydrocarbons. The TSB final report contains only two additional recommendations, the first that Transport Canada actually audit and inspect implementation of the “safety management systems” introduced in 2001 when direct government rulemaking was replaced by self-regulation. The TSB’s only new operational recommendation is that Canada adopt recent U.S. National Transportation Safety Board advice that trains parked on main line grades be restrained by derailers or other physical devices. “Transport Canada must require railways to put in place additional physical defenses to prevent runaway trains,” said Tadros. “This could mean things like wheel chocks, or modern braking technology, because right now, Transport Canada is relying on the rules that still allow a train carrying dangerous goods to be left unattended on a descending grade.”

OmniTRAX Canada suspends CBR Winnipeg, Manitoba-based OmniTRAX Canada said last month it would “suspend its plans to ship crude oil for the foreseeable future,” even as it “anticipates a record shipping season in 2014. The company said grain and other commodities would fill in any revenue gap caused by the suspension of CBR moves, “due to new customers and contracts to ship grain, commodities, and building and construction materials to Nunavut, and with the strong support of the federal and provincial governments” within Canada. Hudson Bay Railway (HBR) would be the railroad most affected by the decision. HBR links The Pas, Thompson 8

RAILWAY AGE

September 2014

and Churchill, Manitoba, as well as many remote communities, over right-of-way the Port of Churchill and OmniTRAX purchased from CN in 1997. Said OmniTRAX Canada President Merv Tweed, “Our decision to suspend CBR was based in part that grain shippers were willing to commit long-term orders in contracts of over 700,000 metric tons due to the market’s overall growth. Following last year’s record crop, we’re preparing for another strong shipping season.” Tweed added that consultations with First Nations, Metis, and the provincial government were also important factors in the company’s decision

to suspend CBR moves. Omnitrax said it will continue to diversify the commodities it currently handles through the Porf of Churchill, located on Hudson Bay, including potash, feed, and wood pellets, to ensure the port’s long-term sustainability.

Top: François Laplante-Delagrave/AFP/Getty Images; bottom: OmniTRAX

TSB report on Lac-Mégantic takes aim at Transport Canada

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Market

First UPX DMUs arrive in Toronto

North America PROTRAN TECHNOLOGY: Delivered the first sets of its Collision Avoidance System to a major East Coast rail transit agency and a maintenanceof-way contractor. Protran says the system can accurately detect at distances up to 1,000 feet or greater in the harshest conditions, including tunnels and curves, and provides data logging of more than 2,000 events, a real-time clock, vehicle-to-vehicle and vehicle-to-personnel warning, multiple inputs and outputs, and travel mode and work mode settings. It does not depend on GPS or UWB (ultra wideband). 10

RAILWAY AGE

September 2014

station), over the existing and upgraded GO Transit Kitchener Line, with a new spur into the airport. Trip distance is 23.5 km (14.5 miles). There are two intermediate stops, at the Bloor-Dundas and Weston GO Transit regional/commuter rail stations. The new spur into the airport is currently under construction by AirLINX Transit Partners Inc. (a consortium of Aecon Construction and Materials Ltd. and Dufferin Construction Co., overseen by Metrolinx and Infrastructure Ontario), and is close to completion. Service is slated to begin in 2015, in time for the 2015 Pan Am and Parapan Am Games in Toronto.

WMATA: Awarded an $8 million contract to Cubic Transportation Systems to convert its existing paper magnetic farecard vending machines to sales and reload devices for SmarTrip®, the contactless smartcard for the Washington Metro. The project is part of WMATA’s plan to eliminate paper ticketing from its fare system and convert to all-contactless media by spring 2016. Cubic will upgrade more than 500 machines with smartcard readers and software.

Worldwide PANAMA CITY: Morristown, N.J.-based engineeering consultant firm Louis

Berger, as part of the Consorcio PML2 joint venture, has signed a five-year, $32 million contract to oversee construction of the Panama City Metro Line 2, Central America’s first rail rapid transit system. The Consorcio PML2 also includes Spanish consultant partners Ayesa and Metropolitan Transports of Barcelona. The new 13-mile line is the second of four lines in the Panama federal government’s plan to provide efficient, sustainable transport in the Panama City metropolitan area, which supports 1.2 million residents. Line 2 includes 16 stations along an elevated alignment from an interchange with Line 1 at San Miguelito, serving several city districts.

Stephen C. Host

Union-Pearson Express (UPX), the C$456 billion Metrolinx project to connect Toronto’s Lester B. Pearson International Airport with Union Station, is now taking delivery of its 18 diesel multiple-units (DMUs) from Sumitomo. The prototype, no. 1002, is seen here being delivered by CN. The DMUs, which can be configured in trainsets of two or three vehicles accommodating 120 or 180 seated passengers, are EPA Tier 4 compliant and can be converted to electric operation with catenary. They will operate on 15-minute headways, with a 25-minute trip time between Union Station and Toronto Pearson Terminal 1 (directly adjacent to the Automated People Mover

Citadis tramway A new passenger experience With a 15-year pedigree in tramways, Alstom presents the latest evolution of Citadis. Its spacious design, with double doors all along the vehicle, a wider central aisle, much larger windows, improved power supply and optimised information system mean a higher degree of passenger comfort and operating performance to meet today’s demands for smarter mobility solutions. With Alstom, designing uidity becomes a reality.

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Update NYAB and Bendix establish lab in Rochester, N.Y. New York Air Brake LLC and Knorr-Bremse Group sister company Bendix Commercial Vehicle Systems LLC, in conjunction with Rochester Institute of Technology (RIT), have created the Knorr-Bremse North America Mechatronics Laboratory at RIT’s Kate Gleason College of Engineering in Rochester, N.Y. The laboratory will serve RIT students and engineers from Bendix and New York Air Brake. Bendix and NYAB, members of the Knorr-Bremse Group (a global manufacturer of braking systems for rail and commercial vehicles) “enjoy a long-standing relationship with RIT and helped develop its Mechatronics Engineering Certificate Program, which allows engineers in the mechanical and engineering disciplines to become stronger contributors to multidisciplinary design teams,” the companies said.

Wabtec acquires Brazilian manufacturer Dia-Frag Wabtec Corp. last month acquired Dia-Frag, a manufacturer of friction products based in Monte Alto, Brazil. Dia-Frag has annual sales of about $40 million. Wabtec did not disclose any financial details of acquisition. Dia-Frag’s capabilities include mixing and molding highly differentiated disc brake pads and drum brake shoes, and precision machining and aluminum die casting. Dia-Frag has about 300 employees and a 15,000-square-meter production facility, which Wabtec intends to use as a manufacturing center of excellence for various product lines. Wabtec said the company has a strong aftermarket presence, and its customers also include leading original equipment manufacturers. 12

RAILWAY AGE September 2014

Exemptions expanded in FRA’s final PTC rule

he Federal Railroad Administration last month published its final rule concerning Positive Train Control (PTC) systems. The rule, which takes effect Oct. 21, 2014, expands certain exemptions and comes 16 months before the full implementation deadline of Dec. 31, 2015. The FRA final rule revises an existing regulatory exception to the requirement to install a PTC system for track segments carrying freight only that present de minimis (minimal) safety risk. The final rule also adds a new exception for PTC-unequipped freight trains associated with certain freight yard operations to operate within PTC systems. Additionally, the rule revises the existing regulations related to en route failures of a PTC system, adds new provisions related to other failures of a PTC system, and amends the regulations on applications for approval of certain modifications of signal and train control systems. The final rule also makes technical amendments to FRA’s other signal and train control regulations and FRA’s regulations governing highway-rail grade crossing warning systems. The rule is a result of an April 2011 petition by the Association of American

Railroads (AAR) requesting that FRA initiate a rulemaking to expand the de minimis exception and otherwise amend the rules concerning the limited operations exception, en route failures of trains operating within PTC s ystems, and the discontinuance of signal systems once PTC systems are installed. AAR also requested that FRA develop a new exception that would allow unequipped trains associated with certain yard operations to operate within PTC systems. Following are excerpts with additional details from the FRA’s Executive Summary, published in the Aug. 22, 2014 Federal Register: “Having considered public comments in response to the NPRM and FRA’s subsequent notice of clarification issued on Jan. 28, 2013, and having later met with the PTC Working Group (PTC WG) of the Railroad Safety Advisory Committee (RSAC), FRA now responds to the comments on the proposed regulatory changes and issues this final rule. “FRA’s existing PTC regulations (codified primarily in 49 CFR part 236 Subpart I) include various exceptions from mandatory PTC system implementation. For instance, the de minimis exception was developed to provide railroads an opportunity to avoid PTC

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Update system implementation on certain freight-only track segments where the burdens of the regulation would yield a gain of trivial or no value. In accordance with FRA’s statutory authority, FRA’s existing regulations also include a limited operations exception, which is for passenger operations or segments over which limited or no freight railroad operations occur. “Having considered the public comments on the NPRM and notice of clarification and discussions with the RSAC PTC Working Group, FRA is promulgating this final rule. The rule makes substantial revisions to the de minimis exception for freight-only track segments under 49 CFR 236.1005(b)(4)(iii). “In particular, this final rule revises the annual car limitation to remove cars containing only a residue [1] of PIH materials; replaces the criterion ‘ruling grade of less than 1%’ with the term ‘heavy grade’ as defined in FRA’s

end-of-train device rule; limits to two per day the number of trains carrying any quantity of PIH materials; and replaces the temporal separation requirement with a requirement that a train carrying any quantity of PIH materials be operated with a vacant block ahead of and behind the train. “A new exception for PTC-unequipped locomotives used in freight operations and PTC-unequipped freight trains has been added, which allows yard movements by these locomotives and trains to operate on PTC-equipped main track with speed restrictions and with operating rules in place to protect against conflicting movements. Further, the en route failure provision at 49 CFR 236.1029 has also been revised to remove the requirement that an absolute block be placed in advance of train movements where the onboard PTC apparatus fails en route, as well as to add several temporary exceptions that last from the

effective date of the final rule through the two years after the statutory deadline for PTC system implementation. “In addition to these changes, the final rule provides in 49 CFR part 235 an alternative method for reviewing some applications for signal system modifications related to PTC system implementation and makes a number of technical corrections to 49 CFR parts 234 and 236. “For the first 20 years of the final rule, the estimated quantified benefits to society, due to the regulatory changes, total approximately $700 million discounted at 7% and $922 million discounted at 3%. The largest components of the benefits come from reduced costs of PTC system wayside components because of extensions of the de minimis risk exception and reduced costs of onboard PTC systems on locomotives used in freight operations in yard areas.”

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Update Fossil fuel moves abound in British Columbia, Oregon In the ongoing juggling of transport logistics affecting fossil fuels throughout western North America, British Columbia’s Port Metro Vancouver last month approved a new rail-to-barge coal transfer facility. The move followed by three days a decision by Oregon’s Department of State Lands denying a permit for construction of a coal export project at Port of Morrow, in Boardman, Ore., roughly 164 miles east of Portland, to bolster international coal export. That facility would have received coal from a combined rail route via Spokane, Wash., most likely involving BNSF, Union Pacific, and Montana Rail Link. Both decisions highlight the additional pressure on the coal industry and western North American railroads as they scramble to find port access and coal delivery routes unimpeded by growing resistance from various munic-

ipalities and interest groups. The Port Metro Vancouver site, at the “multipurpose” Fraser Surrey Docks (photo, opposite page), gives BNSF a viable option for handling coal exports from the Powder River Basin in Wyoming, while circumventing objections from other sites, particularly in Washington State and California but also including Oregon. Political maneuvering among governments and businesses involving crude-by-rail (CBR) operations also is ongoing. Port Metro Vancouver said it found no “unacceptable risks” in allowing the project to proceed. The terminal, when built, will handle up to 4 million metric tons (4.4 million short tons) of coal, loading it onto barges bound for Texada Island, British Columbia, where a second transfer point for cross-Pacific shipping is located. Last fall, Port Metro Vancouver set

standards for the transfer project, including prohibition of on-site coal storage and a requirement for barges to increase measures to prevent coal dust from escaping while in transit. Coal delivery was not the only fuel source in transportation flux last month. One day after Oregon denied a permit for a coal export terminal on the Columbia River, a separate state body approved plans to expand a CBR transfer terminal serving railroad and barge traffic further downstream. Oregon’s state Department of Environmental Quality (DEQ), which among other duties regulates clean air, granted permission to Global Partners LP on Aug. 19, 2014 to expand its oil train terminal near Clatskanie, Ore., to an eventual 1.8 billion gallons of oil per year. The department also approved an oil spill plan for the terminal. Barges loaded with oil will travel to

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refineries in Washington State and California, circumventing rising protests by environmentalists and other parties in both of those states objecting to CBR movements. The terminal expansion also will double the potential number of trains serving it, up to 50 CBR trains per month. Clatskanie lies roughly 60 miles northwest of, and downstream from, Portland, Ore. Waltham, Mass.-based Global Partners LP defines itself as “a midstream logistics and marketing company” involved in “the logistics of transporting Bakken and Canadian crude oil and other energy products via rail, establishing a ‘virtual pipeline’ from the mid-continent region of the U.S. and Canada to refiners and other customers on the East and West coasts.” Global Partners CEO Eric Slifka said the state permit clears the way for restarting ethanol production, as well as

unloading CBR. “We are pleased to have received our permit, which is the next step toward infrastructure upgrades that will create hundreds of jobs during the construction phase and new permanent jobs when the facility is fully

operational,” he said. The Clatskanie terminal, built originally to handle ethanol fuel production, was granted a permit change in 2012 by the Oregon DEQ to begin handling CBR traffic instead of ethanol.

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Update STB gives momentum to CHSRA second segment The Surface Transportation Board last month ruled that the California High-Speed Rail Authority “is authorized to construct a 114-mile high-speed passenger rail line between Fresno and Bakersfield, Calif., subject to environmental mitigation conditions,” thus giving the state’s high speed rail effort more momentum. STB noted the route involved “is the second segment of the planned HST System to come before the Board.” Last year STB approved the first segment of the CHSRA plan, running roughly north of Fresno to Merced, Calif., and making Fresno the approximate midpoint of the developing HSR route in the state’s Central Valley. STB’s move followed a California appeals court decision last month ruling that CHSRA could proceed with up to $8 billion in state bond sales for the proposed $68 billion HSR system.

STB’s decision is noteworthy in part since it decided in April 2013 “that it had jurisdiction” over the proposed system, and it also “requested cooperating agency status for the remaining project-level EISs,” or Environmental Impact Statements, “which FRA granted in August 2013.” “[W]e accept [STB’s Office of Environmental Assessment]’s recommendation to adopt the Final EIS, which we find took a ‘hard look’ at the potential environmental impact of the project, selected an environmentally preferred route from a list of alternatives, and recommended extensive environmental conditions to avoid, minimize, or mitigate the project’s potential environmental impact,” STB said. “After weighing the entire record on both the transportation merits and the environmental issues, the Board grants the Authority’s petition for exemption

subject to various environmental mitigation conditions, including: (1) construction of the route designated by FRA as environmentally preferable, (2) compliance with the mitigation imposed by FRA in its ROD, and (3) compliance with three additional environmental conditions recommended by OEA,” STB added. STB’s decision acknowledges the potential utility of the route segment approved even if no additional HSR segments are built. “Fresno and Bakersfield are logical termini for the Line,” STB said. “As noted in the Final EIS, they are two of the largest cities in the San Joaquin Valley, thus providing potential ridership for the Line.” As such, said STB in its ruling, “transportation benefits would be realized even if the Line is constructed and subsequent sections of the HST System are never built.”

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Update Research Triangle LRT plans unfold, slowly Last month light rail transit plans got the backing of officials in Durham and Orange counties, N.C., setting the stage for a concerted effort to secure federal funding for a regional LRT system covering the central core of the Tar Heel State’s Research Triangle (officially the Raleigh-Durham-Chapel Hill Combined Statistical Area). Still missing from the equation so far, however, is a key third county, Wake, which includes the state capital, Raleigh; it has yet to commit to growing LRT, either on its own or in conjunction with the two other counties. In 2006 the Federal Transit Administration turned down a proposed 28-mile LRT plan linking Durham and Raleigh. Durham and Orange counties have approved measures to bolster chances of state funding support of a 17-mile LRT route running (west-to-east) from

UNC Hospitals Station in Chapel Hill to Alston Ave./North Carolina Central University Station in eastern Durham. Some portions of the proposed route are not yet finalized. The plan has public support from elected officials and state Department of Transportation division engineers. As well, last February FTA approved conceptual planning of the starter line. Durham and Orange counties already collect a half-cent sales tax intended to provide local funds for the project. “It looks like there was great collaboration with the division engineers,” Durham County Commissioner Ellen Reckhow, who chairs the cross-county Transportation Advisory Committee, told local media. “We were able to work together and get a reasonably good outcome.” But a funding cap enacted by state legislators means only $135 million in

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state assistance can be directed toward the plans during the next 10 years, short of the $455 million in state matching funds anticipated as necessary to advanced the $1.8 billion project. Durham-based Triangle Transit, established in 1989, serves Durham, Orange, and Wake counties, oversees regional planning for the three counties; it supports the effort to establish LRT in the region. Charlotte, N.C., continues to pace the Tar Heel State when it comes to both light rail transit and streetcar development, extending its first (Blue) LRT line while the latter streetcar (Gold) line is under construction. In addition, the Winston-Salem City Council last March approved a streetcar plan, estimated to cost $179 million, through Wake Forest Innovation Quarter and connecting with WinstonSalem State.

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Book Review: How the railroads rose from an economic abyss

“American Railroads: Decline and Renaissance in the Twentieth Century,” by Robert E. Gallamore and John R. Meyer, Harvard University Press, 506 pages, hardcover, $49 (Kindle, $31.49).

If your choice for the greatest railroad story ever written is Ayn Rand’s fictional “Atlas Shrugged,” you are mistaken. The greatest is the true story of American railroads’ great leap forward from widespread insolvency and poorer prospects to renaissance and renewed investor confidence following regulatory reform mandated by the Staggers Rail Act of 1980. That railroad troubles had descended to an economic abyss figuratively deeper than the Mariana Trench was a tort foisted by almost a century of excessive, misguided, and misapplied regulation by oft overeager and inadequately schooled lawmakers and regulators. Few opinion leaders and decision makers fully comprehend how close the industry’s flirtation with nationalization had, by the 1970s, approached consummation. Free-market advocates, concluding the problem was overzealous regula-

tion, wryly suggested the Interstate Commerce Commission (ICC) be pummeled into debris, repurposed to construct a statue of 18th century Scottish political philosopher Adam Smith. Actually, the objective was performed with less dust and more permanent consequence by Congress, beginning with anti-inflammatories such as creation of Amtrak, the Regional Railroad Reorganization (3-R) Act, and Railroad Revitalization and Regulatory Reform (4-R) Act, and ending with the broad-spectrum antibiotic Staggers Rail Act. At the root of pre-Staggers regulatory misfeasance was insufficient knowledge of railroad costs and how they are best recovered in an environment of disparate levels of shipper demand, abilities to pay, and effective alternatives. Book Review continues on following page.

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Update

Book Review continued from previous page.

In 1971, academic historian Albro Martin narrated, in “Enterprise Denied,” the origin and decline of railroads; followed, in 1992, by “Railroads Triumphant,” which chronicled the industry’s rebirth following partial deregulation. Comes now the culmination of more than a decade of research by two Harvard economists—John R. Meyer and Robert E. Gallamore—who deconstruct railroad public policy history in “American Railroads,” which explains the blunders made by lawmakers and regulators, and the dreadful results. It is the insightful explanation of the defective reasoning behind those errors that makes this book more than another ephemeral visitation to railroad times past. Meyer, with a Harvard doctorate, taught at Yale and Harvard and mentored Gallamore through the Harvard doctoral program. The two subsequently enjoyed a Lone Ranger and Tonto relationship, as Meyer served

on Union Pacific’s board of directors while Gallamore, now a Michigan State adjunct professor in its Certificate Course in Railway Management program, superintended the railroad’s strategic planning and tutored UP attorneys and other non-economists in the art and science of pricing efficiency under the enterprise-crushing boot of well-meaning, but frequently flawed, regulatory edicts. Meyer died in 2009 as the book neared draft stage. “American Railroads” delivers an objective of economics—explaining what is not obvious. A prescription for the future is a fitting conclusion to the book. Some concepts may be difficult for those without a semester or two of economics study, but those wishing to gain a credible understanding of railroad economic history should not be intimidated. Take an economist to lunch and ask questions. —Frank N.Wilner, Contributing Editor

Rocla expands into Mexico Rocla Concrete Tie, Inc. (RCTI) has opened an expandable 30,000-squarefoot manufacturing facility in San Jose Iturbide, Mexico. Located along the Kansas City Southern de México main line approximately 25 miles north Queretaro, the plant also serves as the corporate office for RCTI de México, a wholly owned subsidiary of RCTI. The facility offers a complete lineup of products for each of the railroad sectors, including heavyhaul main line, transit, high speed, and industrial grade concrete ties. “Mexico’s railways are an important part of our corporate growth strategy, so when we built our newest manufacturing plant, we did so knowing that we wanted to have the ability to expand our facilities there to keep up with growing demand,” said RCTI de México Vice President Eliseo Bandala.

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Update

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Miner marks 120 years Miner Enterprises, one of the railroad industry’s longest-standing supply companies, in 2014 is celebrating 120 years in business. Miner Enterprises received its first customer order on June 7, 1894, “to supply the rapidly growing railroad industry with high quality engineered railcar components, said President and General Manager Ric Biehl. “The industry has changed dramatically in 120 years. However, our commitment to innovative design, customer needs, high quality service, and building trust remain the hallmark of the Miner brand.” “Originally founded in 1894 as W.H. Miner, our company provided spring draft rigging and then friction gears for railroads transitioning from wooden frames,” explained Executive Director Global Sales Bill O’Donnell. “It continued to grow rapidly with the standardization of draft gear pockets, automatic couplers, and braking systems.” Today, Miner Enterprises products include draft gears, unloading systems, hatch covers, side bearings, brake beams, buffer springs, and drawgear springs. Customers include all Class I and Class II railroads worldwide, freight car builders, shippers, leasing companies, and contract freight car repair shops. “Miner products are purchased in 56 countries, and the Miner name is well known around the world,” said O’Donnell. “We are exceptionally gratified by the trust our customers place in our company. We work hard to continue to deserve that trust. Miner’s experienced staff of engineers and technicians works closely with sales and marketing to provide superior products and services that always meet or exceed our customers’ needs and the changing needs of the marketplace.” Miner’s editorial and advertising relationship with the Simmons-Boardman Publishing Corp. Railway Division and Railway Age dates back to the early 20th century (1928 cover ad pictured). “We’ve always valued our relationship with Miner,” said Railway Age Editor-in-Chief William C. Vantuono. “Miner has always been a valuable source of information for our publications, and we of course appreciate their business. Now, in the age of digital publishing, it’s gratifying—and in a very real sense, almost extraordinary— that long-standing, iconic railway supply companies such as Miner continue to participate in what we do.”

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Watching Washington FRANK N. WILNER

What do you do when nobody is looking?

he midst of a media circus is a dreadful environment in which to make public policy. Disquieting news, born of deficient facts, generates public hysteria, in turn upsetting perennially insecure lawmakers and regulators, whose reaction typically is hasty and half-baked. Unlike a palindrome, the process cannot erase itself in reverse order, but rather endures as a revenuesucking quandary. Such was the environment in 1987, when a drug-impaired locomotive engineer caused horrendous loss of life on the Northeast Corridor, creating a public impression that railroading was a society of stoners, and leading to a federally managed and unnecessarily expensive drug and alcohol testing regime. The data since demonstrate a premature rush to judgment—that the industry’s substance abuse rate is better than society in general, and previous non-government remedial efforts were effective and less expensive. Another media-spawned hysteria followed a 2008 horrific loss of life in Chatsworth, Calif., when a commuter rail engineer, suffering terminal stupidity, chose texting in lieu of properly performing his craft. Thus emerged a $12 billion unfunded Congressional mandate to fast-track installation of Positive Train Control ahead of available technology. Comes now a public frenzy following last year’s gruesome event in Lac-Mégantic, Que., where, had Canadian regulations applying to train tie-downs mirrored those in the U.S., the disaster may have been averted. No matter to two back-benchers in Congress, who played to the cravings of rail labor and introduced legislation to mandate minimum crew size. Not to be marginalized, the U.S. Federal Railroad Administrator, with lifelong labor ties, proposed a similar regulatory

RAILWAY AGE

September 2014

requirement. Lost in the fog is that no U.S. accidents involving crude by rail have been the result of human error. Short line and regional railroads— some 500 in total, many mom and pop operations, and most heavily mortgaged—struggle amidst the revenue drain of past well-intentioned, but poorly justified, government paternalism. The American Short Line and Regional Railroad Association, no stranger to such kettles of fish, is a first line of defense for small railroads. ASLRRA members haul some 50,000 carloads of crude oil annually, subject-

ASLRRA looks to a best-defense-isa-strong-offense strategy, through its Short Line Safety Institute, guided by Jo Strang. ing them to intense scrutiny—and worse, should the unthinkable occur. In a best-defense-is-a-strong-offense strategy, ASLRRA last year plucked from Washington’s alphabet soup an experienced federal official whose economics savvy is eclipsed only by her encyclopedic knowledge of rail safety laws and regulations. Jo Strang, ASLRRA’s vice president for regulatory affairs, is providing guidance and technical expertise to a team of 35 in creating a Short Line Safety Institute to inject resource-short small railroads with a top-down

understanding of, and commitment to, uniform best safety practices and compliance. The heart of this effort, Strang says, is “how you do things when nobody is looking.” Building a world-class safety culture, Strang says, requires openness and honesty with the work force and outside contractors, an atmosphere that rewards rather than punishes, and unswerving commitment to the letter and spirit of the myriad of rail safety laws and regulations—endeavors sometimes challenging given the fierce entrepreneurial independence of many short line operators. Not all in Washington subscribe to expediency and labor-union fidelity. Two Senators advocate data-driven research for improving rail safety rather than arbitrarily setting minimum crew size. Susan Collins (R-Maine) and Patty Murray (D-Wash.), who lead the Senate Transportation Appropriations Subcommittee, support federal grants to the Short Line Safety Institute to assist in development and evaluation of on-site and classroom training programs, including acquisition of locomotive simulators. Strang’s pedigree is impressive: Undergraduate degrees in economics and geology, a master’s in public policy economics, field experience in rail accident investigation with the Federal Railroad Administration, first female head of the National Transportation Safety Board’s Rail Division, first female head of research and development at the FRA, and the FRA’s first—and longest serving—female Associate Administrator for Safety. “While we know what we know, we don’t know what we don’t know,” Strang says, and it is that knowledge she intends for each ASLRRA member to discover through the Short Line Safety Institute.

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The fuel tenders in BNSF’s LNG evaluation program are legacy units originally used in a 1990s Burlington Northern test program. Prepared by Air Products & Chemicals Inc., they have a cryogenic capacity of about 20,000 gallons. LNG gasification occurs on the tender.

LOCOMOTIVES: IS LNG THE NEXT GENERATION? LNG is one of several advanced technologies changing motive power in significant ways.

28 RAILWAY AGE September 2014

locations, in real-world conditions,” says BNSF Director Operations Support Mike Swaney. “They operated safely at TTCI for several thousand miles, and the OEMs have performed a lot of fine-tuning. The next step is to determine if they can meet our performance requirement, which means they must be able to perform similar to their diesel counterparts.” BNSF’s EMD LNG set consists of two SD70ACe units; the GE set, two ES44ACs. Both utilize a legacy fuel tender that originally saw service in the 1990s during BN’s brief foray into LNG. These tenders, originally built by Air Products & Chemicals Inc., have a cryogenic capacity of about 20,000 gallons; gasification of the LNG occurs on the tender. Both locomotive sets are “dual-fuel”—should conditions require a modified usage, they can switch to 100% diesel operation. Both LNG delivery systems are low-pressure and employ either a 60%-40% (EMD, with a 710 power plant) or 80%-20% (GE, with a GEVO power plant equipped with a NextFuel™ Natural Gas Retrofit Kit) LNG-diesel mix, for compression ignition. (100% LNG requires spark ignition and thus involves many more modifications to the existing prime-mover).

Upper left: BNSF. Lower right: NRE

t has been 20 years since Burlington Northern set a new course in motive power by committing itself to a fleet of 350 EMD a.c.-traction locomotives equipped with Siemens traction motors. At the time, a.c. traction represented the most significant evolution in locomotives since the diesel-electric, with its multiple-unit capabilities and standardized components, had replaced the labor- and infrastructure-intensive steam locomotive (though it didn’t happen overnight). BNSF Railway, in typical pushing-the-envelope fashion, is now moving ahead with what could be the next big step in motive power: locomotives fueled by LNG (liquefied natural gas). Two sets—one each from EMD and GE—consisting of an LNG fuel tender sandwiched between two high-horsepower, six-axle a.c.-traction locomotives, have completed two months of intensive testing, with testing equipment that simulates a train hauling 100 cars of coal on the FAST (Facility for Accelerated Service Testing) loop at TTCI in Pueblo, Colo. These units, with a letter of concurrence for main line testing from the Federal Railroad Administration, are now being prepped for revenue-service evaluation “at a variety of

By WILLIAM C. VANTUONO, Editor-in-Chief

Aside from natural gas’s significantly lower cost per unit of energy compared to diesel needing to remain in place to make the economics work, widespread adoption of LNG has three essential pieces: engine and fuel tender technology, fuel infrastructure, and a supportive regulatory framework. In terms of a fuel tender design, “it’s too early to tell,” says Swaney. “At this point we’re focused on tank-car-style tenders, and we’re working with the AAR’s Natural Gas Fuel Tender Technical Advisory Group on a standardized design. We are aware, though, of the ISO tank option.” The proposed ISO tank approach to refueling involves swapping out a spent ISO LNG tank for a fresh unit delivered to a mobile refueling site. Emissions? With Tier 4 compliance coming up on Jan. 1, 2015, even though NOx, PM (Particulate Matter), and CO are typically lower with natural gas compared to a diesel engine, LNG won’t be a big factor, as widespread deployment isn’t expected to begin until at least 2017. 2

THE EMD APPROACH TO LNG

EMD and parent company Caterpillar® have developed three technologies for burning LNG in locomotive diesel engines: Spark Ignited (100% LNG), Dynamic Gas Blending™ (dual-fuel, up to 60% LNG), and High Pressure Direct Injection (up to 95% LNG). EMD’s approach to DGB™ involves introducing natural gas into the engine early in the combustion cycle. A computercontrolled valve opens adjacent to the lower liner air intake ports, feeding a mixture of natural gas and air into the cylinder, which is then compressed. Near the top of the piston stroke, diesel fuel is injected, and its ignition causes the natural gas to ignite. “Since the pressure in the engine air intake system is relatively low, high pressure is not required for the gas to flow into the engine,” explains EMD Director Engine Systems Martha Lenz. However, “early-cycle introduction of natural

gas presents a challenge due to the tendency for the mixture to pre-ignite as a result of its temperature in the cylinder as it compresses, limiting the amount of gas that can be substituted for diesel fuel. Typically, dual-fuel engines using this method provide 50% to 60% substitution of gas for diesel fuel on a duty-cycle basis. Engine modifications such as reducing the compression ratio may improve operation with natural gas and increase the substitution rate. However, such changes may reduce the efficiency of the engine when operating on 100% diesel, and the engine may be more difficult to start when cold.” By contrast, HPDI injects natural gas much later in the compression cycle, “eliminating issues with pre-ignition and allowing the engine to run like a diesel,” says Lenz. “Since the natural gas must overcome cylinder pressure and requires injection over a short duration, it is introduced at high pressure using a special injector that provides 5% diesel fuel to ignite the mixture.” Caterpillar and Westport Innovations jointly developed this injector. EMD says its 710 engine develops full power with 95% substitution with HPDI “and demonstrates significantly lower emission levels compared to existing diesel models.” Safety is naturally a concern with LNG. Methane detectors are used to identify any natural gas leak on the locomotive and alert the control system to shut off the gas supply. LNG PROGRESS IN CANADA

CN last year tested two main line LNG locomotives in revenue service on a 300-mile secondary line between Edmonton and Fort McMurray, the rail gateway to the oil sands region of northern Alberta. CN retrofitted the diesel engines in two 3,000-hp EMD SD40-2 locomotives to run on LNG using conversion kits supplied by Energy Conversions Inc. (ECI) of Tacoma, Wash. The locomotives, using 90% natural gas, were paired with an LNG fuel tender (a former UP tank car upgraded by Chart Industries, Inc.).

NRE’s prototype NR33CDE-IAC (3,300-hp, six-axle, dynamic extended brakes, independent axle control), built from an SD40-2, undergoes revenue-service testing at BNSF’s Galesburg yard.

September 2014 RAILWAY AGE 29

LOCOMOTIVES

“We selected the daily freight run between Edmonton and Fort McMurray for several reasons,” says CN spokesman Mark Hallman. “Edmonton is an important location on our transcontinental network, the site of a major yard and diesel fueling operation. The loop operation between the two Alberta centers allowed the fueling, servicing, maintenance, and training at a central point in Edmonton. And the 300-mile line sees sufficiently high-tonnage trains over undulating territory to test the capabilities of the locomotives.” Hallman cautions that CN is “in the very early stages of our exploration of the long-term opportunity,” and adds, “We continue to work with other parties, including specialized manufacturers, locomotive builders, fuel suppliers, and regulatory agencies on a project to develop a state-of-the art natural gas locomotive and a standardized fuel tender. We will need more long-term experience—and will need to see more industry research and development work proving the rail technology employing natural gas is effective and economic—before we can comment on the long-term viability of natural gas fueled locomotives as alternatives to our current diesel locomotive fleet.”

and remanufactured locomotives and engines, take effect Jan. 1, 2015. Tier 4 is the final step in a multi-year program beginning with Tier 0-2 standards, which were adopted in December 1997 and became effective Jan. 1, 2000. Tiers 3-4, adopted in March 2008, introduced more stringent requirements. Tier 3 became effective in December 2011. Tier 4 also includes tougher standards for remanufactured Tier 0-2 locomotives. To enable Tier 4 catalytic after-treatment methods, the EPA regulated the availability of low sulfur diesel fuel. A sulfur limit of 500 ppm (parts per million) was effective as of June 2007; 15 ppm from June 2012. Tier 3-4 locomotives must also meet smoke opacity standards. GE’s Tier 4 program began with its 2005 release of a Tier 2 locomotive equipped with its four-stroke Evolution Series GEVO engine. In 2012, GE introduced fuel system enhancements to meet Tier 3. For Tier 4, GE’s Advance Power 4 locomotive offers “the single-largest emission reduction in our program’s timeline,” GE says. It also doesn’t require exhaust after-treatment and related infrastructure investments. An Advance Power 4 prototype is testing along Norfolk Southern’s Erie, Pa., to Conneaut, Ohio, main line.

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32 RAILWAY AGE September 2014

engine. The first freight locomotive to be repowered with a QSK95, CECX 1919 (an EMD SD90 currently undergoing refurbishment), is expected to be in operation on the Indiana Rail Road later this year. The QSK95 is designed to replace the complete dieselelectric system and carbody of a base locomotive as a drop-in package. The fully enclosed unit consists of the QSK95 engine, alternator, cooling system, and dynamic braking system, with an integral Cummins Selective Catalytic Reduction (SCR) exhaust after-treatment system. The QSK95 Power Module, a collaboration between Cummins and Sygnet Rail Technologies LLC, features 1,800 rpm operation. The drop-in power module interfaces with locomotive electronics using standard J1939 engine data bus integration, and offers wheel slip functionality, idle limiting, and remote operational reporting. A quad-turbocharging system with one turbo for each four-cylinder quadrant “provides outstanding response to load demands, with tractive power delivered more rapidly across the entire rpm range to increase acceleration, boost gradient climbing ability, and reduce journey times,” Cummins says. “The 4,200-hp output of the QSK95 is the highest achieved from a 16-cylinder high-speed diesel. When running at high engine-load factors, it is operating well within its design capability. High power density is enabled

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with a hardened power cylinder featuring the strongest single-piece forged steel piston available in the industry. The engine and SCR exhaust after-treatment take a simpler approach to meeting Tier 4 by putting the main focus of emissions reduction in the exhaust stream, with the SCR after-treatment removing the NOx. This leaves the engine combustion to focus on removing PM emissions, avoiding the need for any additional complexity.” FOR GENSETS, A NEW LEAF®

Railserve, a provider of in-plant switching services at many North American locations, employs its own locomotives to move railcars within industrial, manufacturing, and production plants. Rather than purchase genset locomotives, Railserve designed a low-cost, lower-horsepower singleengine genset with proprietary power control technology developed by Alternative Motive Power Systems (AMPS)— the four-axle LEAF® (Low Emissions And Fuel), which is also available as a twin-genset DUAL LEAF®. The first LEAF® units were built at Railserve’s Longview, Tex., locomotive facilities and placed into service in 2008. Railserve is now looking to market this locomotive to other railroads, according to Program Manager T.J. Mahoney. “In addition to reducing costs and environmental impact, the LEAF® surpasses conventional locomotives in many

ways,” says Mahoney. “Key to its performance is its higher rail adhesion—the only difference new operators need to learn how to manage. A proprietary traction motor control system automatically backs off current to any one of the four axles that is in danger of slipping. When this condition arises, the LEAF® applies sand to the rail and reduces power to that one axle only. The unit resumes full power as soon as the chance of slipping passes, and the other three axles remain at the amp load designated by the system for the requested speed and track condition. The operator does not need to reduce power, as is necessary for conventional locomotives experiencing wheelslip.” Mahoney says the LEAF® provides “45% to 60% lower fuel consumption and a life-cycle cost equal to or less than conventional locomotives, 98%-plus reliability, 90% savings on lubricants (synthetic oil changed only once a year), and dramatic reductions in greenhouse gases, NOx, and particulate matter. It does not experience any wet-stacking (oil discharged through the exhaust, which forms a carbon residue that can ignite from noncombusted oil), and thus uses 90% less oil. Maximized tractive effort occurs at speeds less than 10 mph. Its decibel output is 10% lower than conventional locomotives.” The LEAF®, built on a modified GP-style frame and deck, is equipped with a GP- or SW-style cab with touch-screen

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LOCOMOTIVES

controls; Cummins QSX15-L3 600-hp diesel engine (two engines in the DUAL); ONAN 480 KW generator; American Traction Systems proprietary traction motor control system with independent axle control; rebuilt or replaced D77/78 traction motors; new AAR standard wheels; 26L air brake system, and the AMPS power control

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system, which includes Observe/ Analyze/Respond™ (OAR) remote monitoring diagnostics. Data from the AMPS Locomotive Control Unit (LCU) is processed by OAR, and then transmitted via WiFi or cellular systems to a web-based dashboard for locomotive status and performance monitoring by on-site plant

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managers or operations personnel at remote locations. The LCU communicates with all LEAF® systems: generators, traction control, throttle, reverser, brake, and three-axis accelerometer. Data fed to OAR can be displayed in various forms, including plots, charts, indicators, and histograms. “The data helps develop improved safety and operating efficiency,” says Mahoney. “It incorporates track speed violations, man-down alerts, hard couplings, throttle positions and forward/reverse settings, penalty brake applications, cab entry, and remote control digital tracking. Additional OAR data can include wheelslip frequency, excessive idling, low-oil alarm, low-temperature monitoring in cold weather, and maintenance schedules.” NRE AND IAC

Independent axle control (IAC) is one of the distinguishing features of the NRE (National Railway Equipment) NR33CDE-IAC (otherwise known as the SD40-IAC). This tongue-twister of a locomotive designation stands for “3,300-hp, six-axle, dynamic extended brakes, independent axle control.” When employed in hump yard service, the d.c.-traction NR33CDEIAC, according to NRE Assistant Vice President Sales and Marketing Keith Batley, offers a unit reduction of one locomotive over a three-unit consist of SD40-2s. This is mostly attributable to a 50% adhesion factor increase over an SD40-2, achieved with NRE’s chopper module and N-Force microprocessor control system. Performance, says Batley, “is equivalent to that of an a.c.traction locomotive.” The prototype unit, no. 4321, was as of late August in a six-week testing program at BNSF’s Galesburg (Ill.) yard. This locomotive, which can also be employed in line-haul service, was built on an SD40-2 platform equipped with a 645E3B prime-mover. NRE, however, can also convert a GE d.c.traction locomotive into one of these versatile and fuel-efficient pieces of modern motive power. RA

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For freight car truck components, total cost of ownership is far more important than initial cost.

By RYAN McWILLIAMS, Contributing Editor, and Principal, International Engineering/RailAdvisor

eventy-one and one-half tons (143,000 pounds) is the average static load that a freight car truck experiences in typical North American heavy-haul operation. When traveling at 80 mph, the speed limit for freight trains on class 5 track, that load generates additional dynamic force and enough stress to micro-liquefy steel at the wheel/rail interface. Whether it’s a high-speed passenger bogie, or a high-load-capacity freight car truck, recognition should be given to the manufacturers who wrestle with the operating environment, the commercial pressures, the complex regulation process, and the engineering challenges of such multifaceted and leading-edge equipment. Operating conditions and engineering hurdles can be dramatically different across the vast territory of a typical freight truck. The different commodities (rock vs. petroleum products), the different track conditions (tangent vs. 12 degree curves), and the different wheel load conditions (8,000 pounds vs. 35,000 pounds) are just a small example of the design variables that play a very large role in the development of these systems. While these extreme conditions must be considered when developing cutting edge solutions,

it is also true that the primary operational needs have not changed much and continue to focus engineering efforts toward reducing weight and lowering stresses. General industry sentiment is that the selection of freight car components has been driven by the low cost of the initial investment; this is a short-sighted view in many cases. However, more decision makers are beginning to appreciate and consider the total cost of ownership and manufacturers are stating that they are seeing more frequent focus on the bigger picture. The total “real” cost is now a conversation and the lifetime cost to the complete system is under review. Another common sentiment is that the effort required for certification of equipment has increased significantly. Industry OEMs are attempting to benefit from economies of scale both technically and commercially by utilizing good designs across multiple platforms. One driver of this situation has been the introduction of more offshore parts manufacturers with varying levels of quality that cause the regulation and certification process to become more skeptical and arduous. A truck is only as good as its weakest component. Some of these components do not add a large cost and are somewhat September 2014 RAILWAY AGE 37

FREIGHT CAR TRUCK COMPONENTS

easily adapted to traditional three-piece truck designs, while others are more costly and involved. Driving factors regarding performance, regulation, and commercial acceptance of advanced components: • Lower energy consumption helps the rail industry compete with other forms of transportation and comply with environmental mandates, and contributes to a better environment. • A lower stress condition results in safer operations, less track damage, and less wear on vehicles and lading. Track friendly concepts (reduction of wheel and rail wear) are also under consideration in the event that the industry moves toward track usage models that would calculate a usage fee according to the level of stress involved. • Reducing lifecycle cost by lowering maintenance requirements saves money for car owners, operators, and consumers. TECHNICAL ADVANCEMENTS

The Adapter Plus® pedestal pad-liner-bearing adapter system by Amsted uses a resilient polymer primary suspension pad to protect the side frame pedestal and thrust lugs from wear. It also provides for passive steering to improve wheel tread and flange life. When a car enters a curve, the patented polymer pad design deflects in combined shear and compression, storing energy as it negotiates the curve. As the car leaves the curve and enters tangent track, the stored energy is released, restoring the axle to the normal centered position. Older all-metal adapters had the tendency to “stick” out of position due to friction, which caused excessive wheel flange contact as the axles ran out of parallel on tangent track. Passive steering elements were implemented to correct for this situation. The pads also maintain the position of each side frame so that it is centered above the bearing and more evenly distributes the load on each bearing, both of which extend bearing life. This system promotes a 25% longer expected wheel wear life and longer roller bearing life as compared to other M-976 adapters. Side bearings have evolved dramatically in the past 30 years. A component that was once as simple as a steel block providing a solid stop has developed into one of the best dollar-for-dollar investments for improved truck stability and performance. Constant contact side bearings (CCSBs) have been around since the 1970s but much of the awareness, development, and understanding occurred after the industry embraced the benefits of long travel CCSBs in the late ’90s. CCSBs were then mandated by the AAR in 2002 on all new railcars. The primary functions of CCSBs are threefold: 1) improve curve negotiation, 2) dampen car body roll, and 3) positively affect the truck hunting threshold. Long travel retrofit side bearings have been evolving since their introduction in 2004. Proactively addressing the pending tank car ride quality improvement mandate, engineers have developed side bearings that can be installed on a tank car fleet without having to replace an expensive component like a bolster. This application was challenging for many reasons but with advanced engineering expertise and R&D 38

RAILWAY AGE

September 2014

capabilities, Miner Enterprises Inc. worked with end users to address the situation. In 2014, Miner released the latest model to the family, the TCC-45-LTLP-C, which is a bolt-on application to address the need for ease of installation. An impressive example of side bearing innovation is Miner’s TCC-IV, which was developed in response to the high performance demands of car types such as intermodal doublestack well cars. The TCC-IV has combined advancements in metallurgical processes, polymer engineering and the introduction of high performance plastics to combat fatigue and heat degradation which are present in high speed, high mileage services. Braking performance has been extensively evaluated over the years and the railroad industry is recognizing that braking performance can only be improved by taking a systems approach to solving problems. Brake beam designs must address the small details of adjacent component interaction and consider the components both upstream and downstream in the system. Brake beams have evolved with the needs of the industry and have addressed key aspects of braking in relation to the next component of the system. While manufacturers continue to monitor conditions in the brake shoe and wheel tread areas, they also consider the brake lever, strut pin, and side frame wear liners as critical areas of interest. Recently, diagonally opposite wear conditions on wheel flanges have been a driver in brake system research. A significant step forward in brake beam innovation was the offering of a correction angle in the brake head to reduce uneven brake shoe wear by up to 50%. Many of the recent advancements in braking systems are focused at the interface of the brake beam with the adjacent components. As an example, consider the interface of the brake lever and strut pin in the brake lever slot. A positive stop in the strut and splined strut pin bushings (patented by Miner Enterprises) MIiner’s TCC -IV CCSB combines advancements in metallurgy, polymer engineering, and high performance plastics.

At the Crossing

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FREIGHT CAR TRUCK COMPONENTS

are ways to provide a consistent performing and longer lasting beam that reduces maintenance costs and keeps truck assemblies in service for longer periods of time. Another major contributor to wear in the brake beam is a “burnt” brake head due to loose or missing brake shoes. Engineers searched for reasons that a brake shoe would be loose or missing and determined that incorrect insertion of the brake shoe key is often the primary factor. Engineers then developed features into the Miner Series 2008 brake beam with a zero interference key guide (patented) to provide improved key installation, eliminating the risk of improperly inserted keys. By addressing component interface, the new design helps protect the investment in the brake shoe and maximizes shoe life. This small detail relates to improved wheel life by working to better secure the brake shoe in the correct position relative to the wheel tread. With more than 100 years of advancement, both Amsted Rail/ASF-Keystone® and Wabtec/Standard Car Truck/ Barber design and manufacture a range of complete truck systems such as the Motion Control®, the lightest M-976 (AAR Truck Certification Standard) truck available on the market today, and the S-2-E, which boasts advanced curving and high speed stability characteristics. These advanced suspension designs improve overall performance characteristics for both empty and loaded conditions compared to

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earlier configurations and should be seriously considered when selecting new equipment. The next step in truck & component advancement, both by the AAR and by truck OEMs, is focused on the safer, better performing and lower cost systems. The M-976 Standard is in the process of being updated to address loaded car hunting problems that have occurred with some currently approved trucks. The test for curved track rolling resistance is likely to be replaced in the updated standard with something thought to better reflect field performance. OEMs are also re-evaluating their current offerings in reference to these anticipated changes, and looking at modifications that will improve performance to meet the proposed new standards. The goals are to improve wheel life, improve ride quality, improve suspension component life, reduce the stress state of the rail, and improve safety. Current certified truck offerings are a basic three-piece design consisting of a bolster and two side frames. Warp restraint is provided by the bearing adapters and the secondary suspension, without any supplemental devices. However, supplemental devices, such as frame bracing, cross links, or spring planks, might be necessary to meet the new requirements as these components would basically tie the side frames or axles together in a manner that would provide additional truck stability. Unfortunately, most of these types

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RAILWAY AGE

September 2014

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FREIGHT CAR TRUCK COMPONENTS

of performance improvements come at the price of addistandards that might require the use of supplemental devices tional weight, additional up-front cost, and additional for rail life extension in light of increasing axle loads, more maintenance costs even though current research is likely hazmat shipping, and the onset of rolling contact fatigue to result in some novel configurations of these systems. (RCF). Certain advanced truck features are capable of Historically, these devices have been largely rejected by the enhancing wheelset steering and railcar stability while reducindustry except in some niche markets due to the aforemening wheel/rail forces that lead to RCF, but at the cost of tioned issues. Supplemental devices have been viewed as not additional complexity, increased weight, and associated mainbeing worth the marginal performance improvements when tenance costs. The industry must also address the fact that compared to the traditional three-piece truck. premium products are not always embraced, since the North Prior to M-976, truck OEMs supplied different car types American Interchange System allows for component replacebased on different performance requirements such as high ment with non-premium products, unless specifically speed stability, curving, and customer preference. required to be replaced in-kind per the AAR Field Manual. Implementation of M-976 removed much of that diversity Looking far ahead, Amsted has developed an Advanced by combining performance requirements into one standard. Swing Motion速 truck, in conjunction with Amtrak, that incorporates hydraulic suspension elements in lieu of convenNow, if a car will operate at 286,000 pounds gross rail load, tional friction damping. This has further enabled stability regardless of type, that vehicle will include M-976 certified and carbody force control at speeds exceeding 100 mph. This trucks. Intermodal cars, autoracks, and some utility cars will use special trucks for their unique applications, but the varia- design would allow for safer transport of premium or hazardous goods and potentially offers a solution for higher speed tions are not as prevalent as they once were. When M-976 freight operations. While this technology acceptance may be was implemented in 2003 there were cost increases associfurther in the future, it highlights how advancements are far ated with the addition of improved friction wedge systems, from limited. The industry is now considering the cost of long travel CCSBs, and primary suspension pads. technology implementation and maintenance against the Performance improvements were measurable and positive. potential benefits of wheel/rail life extension and a safer, The current issue is whether the cost-benefit proposition faster, more productive freight network. RA has changed enough to mandate higher performance Railway Age Ad 2014.08.18 Half Page_Layout 1 8/19/14 3:17 PM Page 1

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Metra

n a nation often split by urban and suburban priorities, Metra has worked to unite Chicagoland for three decades, with considerable success. Given the reputation for hardball politics shared by city, region, and state— including within Metra itself, critics will quickly assert—that’s no small accomplishment. As well, Metra must coordinate, and cooperate, with major Class I freight railroad landlords BNSF and Union Pacific, as well as with Amtrak (owner of Chicago Union Station), and other transit agencies, notably heavyweight Chicago Transit Authority (CTA). It does just that while serving 241 stations, including not one or two but five in downtown Chicago (four of them terminals), while canvassing six Illinois counties constituting the majority portion of Chicagoland with 703 trains each

Managing Editor

weekday, protecting 11 service routes covering 487.7 routemiles. One route, Union Pacific-North, crosses the border to serve one stop in southeast Wisconsin. Roughly 300,000 riders per day, or 81.3 million per year, avail themselves of Metra service, and not all of them are commuters. Indeed, for much of its 30-year history Metra has made it a point to be more than just a “commuter railroad,” hence its focus on customer service, regardless of day or time of day. “Here in Chicago at Metra, it’s ‘Customer No. 1’” in a transparent manner, says Metra Executive Director and CEO Don Orseno, a Chicago native, 30-year Metra veteran, and former locomotive engineer who assumed his current post late last January, after serving as interim CEO since August 2013. September 2014 RAILWAY AGE 45

METRA

A work train, pausing within Chicago’s Grant Park, is symbolic of Metra’s stated focus on a state of good repair.

NEW EQUIPMENT

Satisfaction should be achievable as Metra continues to receive 160 Highliner cars for use on its Metra Electric Line, about half of which are now on the property. The Metra Electric Line runs over 32 miles from far south suburban University Park through to both Van Buren Station and Millennium Station in Chicago’s downtown, and includes two branches to Blue Island and South Chicago. As the third-busiest Metra line, it carries roughly 20,000 passengers a day. Metra in 2010 awarded Nippon Sharyo, in conjunction 46

RAILWAY AGE

September 2014

with Sumitomo Corp. of America, a $585 million contract. The cars are similar to Metra’s fleet of diesel-hauled gallery cars that have typified Metra’s fleet for decades. Metra, long a stickler for gallery cars as opposed to the more numerous bilevels that serve most other U.S. and Canadian regional passenger properties, believes its choice offers better “customer comfort,” and is efficient not just for conductors checking on fares and other matters, but also “for capacity and loads that we have,” Orseno says. The new cars have to address not only existing capacity but also anticipated future increases; some rush-hour trains already are carrying maximum loads, Orseno says. “We are staying with the same style of cars that we have,” he says. “It’s a design that we like.” COORDINATING TRANSIT COVERAGE

With equipment both new and older, Metra’s goal is to “try to work with the marketing department and various people to get people in those seats” and to get enough seats for that effort. That includes working on adding “reverse-commute” travel options to serve, among other things, corporate headquarters located outside Chicago proper. It also means coordinating with other Chicagoland bus transit agencies, notably Pace, like Metra overseen by the Regional Transportation Authority, to adequately address the “first- and last-mile commutes,” Orseno says.

Joseph M. Calisi

“Success is driven by capacity and what kind of service you can provide the customer,” Orseno says. “We want to provide the best service whether it’s inbound or outbound, rush hour or the weekend.” Acknowledging Metra’s annual difficulties operating during Chicago’s famed winter weather (while also noting other modes struggle in similar fashion), Orseno says, “Our goal is to operate on time about 95% consistently—all the time.” Metra achieved 95.4% on-time performance in fiscal year 2013. And while reliability is certainly a major driver of such service goals, it isn’t the only criterion. “Customer satisfaction is important to Metra, to myself, to our board,” Orseno notes, and that “includes outlets in cars for electrical use, installing WiFi, communicating with customers constantly to inform them of potential service disruptions.”

METRA

Metra expects big benefits upon completion of the Englewood Flyover, a key component of the Chicago Region Environmental and Transportation Efficiency (CREATE) program.

RAILWAY AGE

September 2014

Metra

Of course, Metra’s more traditional Chicago-bound riders often require the same benefits of such coordination, and Orseno notes Metra and the Chicago Transit Authority have a good working relationship in moving people to, within, and from the city proper. “We have a wonderful relationship with CTA; we work very closely with them,” Orseno asserts. Both agencies look at the “regional market, not suburb to city or city to suburb”— an approach that increases the reach of each organization. “It’s more of a global-type thinking, [advanced] in a regional perspective,” he says. The partnership approach also applies to Amtrak, Orseno says, particularly when it comes to Chicago Union Station. Though Amtrak owns the station, “we run about 80% of the trains going in and out. When you go for on-time performance of 95% or better, you can’t do that without constant communications.” Orseno and Metra are keenly aware of the criticism leveled at the Amtrak station, confusing to even daily riders. “One can certainly see ways of improving traffic flows,” he allows, adding that Metra will work closely with Amtrak in advancing plans to ameliorate the problem.

METRA FUNDING NEEDS EXAMINED

Right now, Metra’s capital program is focused on state-ofgood-repair needs, including but not limited to its 2,000 signals, 1,100 pieces of rolling stock, 821 bridges, 571 grade crossings, 24 rail yards, 15 electrical stations, and 12 fuel facilities. And, like other large railroads across the U.S., Metra is working to implement Positive Train Control (PTC) equipment on its consists, as well as assist host freight railroads in PTC implementation on rail routes. “PTC is a wonderful safety enhancement, which folks want installed quickly. But the interoperability, and the 220 spectrum, are issues” to be addressed, Orseno says. The Federal Railroad Administration last month expanded its list of exemptions concerning the deadline for PTC’s implementation, and Orseno hopes Metra will qualify for reasonable extensions “based on good-faith efforts,” acknowledging Metra is unlikely to meet the baseline deadline of Dec. 31, 2015. PTC also puts a strain on Metra’s capital budget just as it impacts Metra’s passenger rail counterparts and, indeed, freight railroads large and small. “We’re like everyone else; starved for capital,” Orseno quips. That paucity hasn’t stopped Metra from pursuing big dreams, however. Metra remains an active partner in the RAILWAYAGE H.pdf 1 03/03/14 16:30 Chicago Region Environmental And Transportation Efficiency

(CREATE) consortium that slowly is streamlining freight and passenger rail operations in the Chicago hub, with emphasis on reducing conflicting moves and resultant train delays for numerous parties. Along with those other parties, Metra is advancing construction of the Englewood Flyover, which when completed will separate Metra from freight and Amtrak moves. Metra is developing a strategic plan codifying its capital needs for the next decade, including an estimated $9.9 billion needed for capital maintenance, far more than it has readily available at present. Identifying those needs is the first step, Orseno says, adding, “Dedicated, sustainable funding is needed to make good solid plans.” Orseno says that Metra still has not given up on its longrange plan to institute a circumferential, 55-mile Suburban Transit Access Route (STAR Line), connecting 100 municipalities in Chicagoland and uniting numerous Metra radial routes to foster intra-suburban rail travel. “It’s in our longrange vision,” he says, allowing that, for now, such an ambitious plan remains out of range. Then again, Metra’s ambitious determination to set its own course, be it driven by customer service or equipment preference, has contributed to what set the railroad apart from many other properties for three decades. Expect more of the same in the years ahead. RA

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Decades of research, development and technological innovations, working in partnership with North American railroads, has resulted in highly productive and reliable track maintenance machinery. Maximum track quality, minimum track occupancy and increased return on investment are a reflection of Plasser´s commitment to providing the latest technology and solutions for today´s m/w challenges. Plasser American – Your partner for life.

SAVING TIME AND MONEY

A Harsco Rail Drone Tamper (left) moves over CN right-of-way.

Productivity gains and cost savings often go hand-in-hand with safer m/w equipment.

aintenance on the railroad can be caught in a revolving cycle where increased traffic requires additional maintenance. However, the increased traffic results in tight work windows. Suppliers offer solutions to help break this cycle by addressing a simple question: “How can this be done better?” Their answers follow.

Harsco Rail

THE DRONE

Harsco Rail says it designs solutions to save railways time and money. From mechanizing labor-intensive processes, to precise control systems, the company continues to help customers improve their track maintenance and construction operations and points to its Drone Tamper as its best example of an improvement in maintenance equipment. The Drone can couple with existing surfacing equipment and increases efficiency and productivity with its ability to operate in a skip-tie formation. Its remote control operation improves safety by removing workers from the equipment. Harsco says it is working on the next generation of this machine, as well as a generation of more Drone equipment. “We are working on more than 30 new product

By MISCHA WANEK-LIBMAN, Engineering Editor

development projects and each of them addresses the key drivers that impact time and money. We are investigating new methods to improve fuel savings, increase productivity, reduce downtime, more effectively use labor, and increase safety,” says Evan Sevel, Harsco Rail director of equipment. Harsco Rail is committed to investing in new technology and incorporating it into machine design, as well as equipment upgrades. While many of these developments remain confidential and/or pending patent approval, one new product launched this year was the Bullet Projector for Mark Series Tampers. “With Harsco Rail’s dedication to product development and improvement, railways and contractors will continue to benefit from Harsco’s new technology and equipment that will equal or surpass the success of past projects, such as the Jupiter Control System, Drone Tamper, Bullet Projector, Double Barrel Receiver, and Smart Grind Software,” Sevel says. RAIL UNLOADING PROCESS

Herzog Railroad Services, Inc. (HRSI) looks to improve productivity with its equipment, but says the real goal is September 2014 RAILWAY AGE 51

MAINTENANCE-OF-WAY

increased safety. One area the company saw room for improvement was the rail unloading process. Its Rail Unloading Machine (RUM) and Automated Tie Down Car can function as a combo or independently. According to Tim Francis, vice president of marketing, both result in safety and efficiency gains, as well as better manpower utilization. The idea behind the RUM was to make the rail unloading process safer and more efficient. The company achieved this by eliminating the need for manual intervention during rail unloading. Instead of requiring personnel be on the ground in between sticks for rail or to tie off the first stick of rail, the RUM utilizes a knuckle boom crane to pull the rail into the power box, which then feeds the rail through the machine and unloads it at the same speed that the train is traveling. Francis says the RUM is capable of unloading single or double sided and averages 10 sticks of rail an hour. “The RUM can move from job site to job site on the highway with a crew of two, eliminating the need for costly and time consuming switching of maintenance-of-way equipment,” says Francis. “At the completion of the project, the RUM cuts away from the rail train and exits from the track. Within a few minutes, the RUM can be ready for highway travel to the next assignment.” Francis says that after the RUM was developed, the next logical step was to develop a tie down car that increases personnel safety. “We approached the process from a safety standpoint and asked what could we do to make the process safer. So, we took the manual tie down car and automated it,” says Francis. The Automated Tie Down Car is operational via remote control from up to a quarter-mile away and can also be operated from the RUM. Francis says that in addition to safety, there is significant time savings as it pertains to unclamping and clamping the rails. He says a process that can take more than seven minutes to perform manually, takes seconds with the Automated Tie Down Car. “The automation of the tie down car supports the railroads’ desire to reduce track and time needs and increase the window of time to run revenue freight,” says Francis. 52

RAILWAY AGE

September 2014

THE RAPTOR

Scott Diercks, product development manager at Loram Maintenance of Way Inc., points to the way railroads handle rail as an area where savings can be seen in both time and money and productivity can be gained. He notes that progressive rail replacement programs are putting demands that the existing fleet of aging CWR trains across North America can’t meet in a safe, efficient manner. Additionally, he says the introduction of rail gantry loading systems allowed an opportunity for equipment manufactures to revolutionize the practice of handling rail, but the units lack the power required to load long strings of rail and lack an ergonomic, safe operating platform that retains total control of the rail during the joining process. “Loram’s Raptor Rail Handling System addresses all the shortcomings of early gantry units,” says Diercks. “It consists of a rail pick-up and delivery system for both new and second hand rail. Our design provides a next generation solution embedded with superior features and unmatched operational efficiencies. “The life-cycle of rail includes four logistical components: 1) transport from steel mill or ship to welding plant, 2) delivery of CWR from plant to trackside, 3) pick-up of relay rail for reuse or re-welding, and 4) pick-up and disposition of scrap rail. Our system is a family of machines that can provide service in any of these four areas. While the initial focus is on rail pick-up, the machine can also deliver rail efficiently. Its design also anticipates expected increased in rail sizes, overall length, and top-load abilities.” Diercks mentions the Raptor’s strengths lie in its lower manpower requirements and improvements in safety vs. existing units. “We have shown it will deliver productivity improvement of 50% or more in everyday service (3,000 to 5,000 feet per hour). The increase allows our customers to reduce their fleet size and capital requirements. Additional selling points include improved rail quality, or ‘relay ready’ rail, by eliminating torch cutting of ends and bolt-holes, and a flexible, durable CWR train design,” says Diercks. Loram believes the ability to top load its trains will prove critical as rail rolling and welding processes evolve. “Rail rolling technology and practices are changing. Mills are already rolling 100-meter rail, with a goal of 150-meter strings. Only Loram’s CWR trains can be top loaded with these rails, and with a welding unit mounted on the Raptor, we can deliver strings of CWR of any length,” says Diercks. While the company aims to increase productivity, it keeps a focus on safety. Diercks says Loram’s equipment retains total control of the rail during loading and unloading, diminishing the risk of injury because human interaction with the rail is reduced. “The equipment also provides a very stable and ergonomic workstation that locks the rail in place mechanically when there is a need for an operator to come in to physical contact with the rail. Future enhancements include an automated rail

Loram

Loram’s Raptor Rail Handling System addresses the shortcomings of early gantry units.

The people. The products. The process. A maintenance partnership that goes the distance.

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MAINTENANCE-OF-WAY

joining station that can further improve safety, reduce manpower needs, and increase productivity even further,” says Diercks. “Other future modules include improved scrapping abilities that will allow railways to capitalize on additional returns, rather than allowing third parties to exploit disposition revenues.” MAXIMIZING WORK WINDOWS

Plasser American Corp. recognizes the two-part challenge presented by increased traffic: Additional maintenance is required because of it, but it also further constrains track time, which is already at a premium. The company has worked to help alleviate this in multiple ways and offers an example in the various versions of the 09 Series CAT (Continuous Action Tamper), celebrating its 30th anniversary, which is capable of much higher production rates than conventional indexing tampers. The machines are available in models that are capable of tamping one, two, three, and four ties at a time. Plasser says that this capability, combined with continuous tamping methodology means the 09 Series tamper can achieve production rates of up to and exceeding one mph; what used to be a full day’s work can be accomplished in one hour or less. Plasser also mentions the combination of the 09 Series tamper with a track stabilizer into a single machine, such as the

Vossloh says its milling system is faster than other systems, has a cleaner finished product, and removes more metal per pass.

DynaCAT and 09-3X Dynamic Tamper, as a way of combining work processes to increase productivity without straining resources. The company says the use of a dynamic track stabilizer helps restore the track to maximum speed following maintenance, resulting in less hindrance of train traffic. Another challenge Plasser has addressed is longer lasting track quality, which means a reduction in maintenance intervals. Plasser points to its use of its non-synchronous uniform hydraulic squeeze tamping units as a way to insure uniform ballast compaction under each tie. The tamping units operate

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RAILWAY AGE

September 2014

MAINTENANCE-OF-WAY

at 35 Hz, which Plasser says has been proven to provide the maximum consolidation of the ballast under the tie while also allowing easy penetration of the tamping tools into the ballast. “A way of providing additional safety is Plasser’s MDZ system, which allows machines to be coupled together for track traveling to and from the worksites, eliminating the possibility of machine collisions,” says Plasser. RAIL LIFE MANAGEMENT

Vossloh Rail Services is developing high speed rail milling, a newer, proven, rail life management technology not presently used in North America. “The benefits of milling have been proven in numerous markets around the world and Vossloh is now looking to bring it to North America,” says Ron Martin, vice president and general manager of Vossloh Rail Systems. “The quality and overall finished product of the rail after milling helps lengthen rail life and reduce maintenance costs. With the system not producing any sparks, scheduling is much easier as it can work anywhere and anytime regardless of extenuating fire hazards. “The system also allows the maintenance of rail on bridge decks, in tunnels and in areas where traditional grinding may be restricted. With the system being virtually noise free, the technology can also be used in highly populated areas

without upsetting anyone. This technology is the cleanest and quietest method of rail management available.” Martin says the milling technology being developed will operate faster than existing systems, have a cleaner finished product, and will remove more metal per pass to help keep production up and costs down. Vossloh’s high performance milling will focus on quality, flexibility, and speed. Martin notes that in comparison to the market-standard milling technology, the new milling trains will be able to work at speeds up to four mph, which means almost double the present speed. Additionally, Vossloh’s milling technology will be able to re-profile rail in one pass with removal rates of up to 3 mm on the running surface and 10 mm at the gauge corner. The offerings by Vossloh Rail Services will include program management software and eddy current pre-testing to identify deficient areas and what removal rate is required. The actual milling itself and the post-milling validation will also include eddy current testing to ensure the rail is free from all defects, including those that are not detectable to 3mm. “This puts the rail back in new-rail condition. This system, in conjunction with high speed grinding systems in use now, have proven to increase the time between rail exchanges, reduce the cost of maintenance, and reduce potential rail defect incidents,” says Martin. RA

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September 2014 RAILWAY AGE 55

PASSING THE ACID TEST At a time when affordable tank car safety upgrades are a high-visibility issue, the supply industry is busy tackling the problem. Here’s a case study.

By STEVE HERBST, Product Manager, Midland Manufacturing, for Railway Age

n chemical manufacturing, hazardous commodities need to be safely handled along the production and supply chain. Fully aware of the potential risks, chemical manufacturers are extremely vigilant and take great pains to ensure that only the safest, most reliable equipment is placed on the railcars that are used to transport all classes of hazardous chemicals. Sulfuric acid (H2SO4) is a highly corrosive acid that is indispensable to a number of industries—agricultural, automotive, manufacturing, mining, paper, oil refinery, water treatment—that use it as a commodity chemical in a number of different industrial production processes. In the U.S., the Belgian chemical company Solvay, one of the world’s largest, through its Cranbury, N.J.-based Eco Services business unit, is one of the most prominent producers, suppliers, and transporters of sulfuric acid in North America. Solvay operates six sulfuric acid production plants—one in Hammond, Ind., three on the Gulf Coast (Baytown and Houston, Tex., and Baton Rouge, La.) and two on the West

Coast (Martinez and Dominguez, Calif.)—from which it transports the sulfuric acid to its industrial customer base with a fleet of 800 tank cars. In addition, Solvay Eco Services is the nation’s largest regenerator of sulfuric acid. “Half of our sulfuric acid volume goes out and is consumed like any other commodity, and after the customer uses it, an empty railcar is sent back to us,” explains Solvay Eco Services Rail Fleet Manager Nick Bizzarrot. “We’re also the leader in the regeneration process. We’ll send high-strength sulfuric acid to customers who use it as a catalyst. When they are done, they send us back the ‘used’ sulfuric acid, which then contains organics. That used sulfuric acid is regenerated, meaning we reburn it, build it back up to strength, remove any impurities, so it’s ready to be used as a catalyst again.” The breadth of its operation means that Solvay Eco Services has a large amount of sulfuric acid riding the nation’s rails at any one time, which dictates that the tank cars used to transport the commodity must offer the highest level of safety and protection against a catastrophic accident, spill, or release. September 2014 RAILWAY AGE 57

PASSING THE ACID TEST

“All of our tank cars are equipped with safety PRVs, and 85% are equipped with Midland valves,” says Bizzarrot. “Ninety-five percent of our tank cars have been built within the past 10 or 11 years. We designed them with full stainless-steel pressure plates, stainless-steel nozzles, stainless-steel manways, and full domes with lids equipped with safety valves. The railcar owners let us execute the valve changeovers; we send them an invoice after the work is completed.“ DATA MINING THROUGH REMANUFACTURING

Solvay tank car valve before a scheduled inspection.

Though Solvay leases all but 19 of the 800 tank cars that are used to transport its sulfuric acid, since 1998 the company has mandated that, when possible, pressure relief valves (PRVs) from Midland Manufacturing, Skokie, Ill., be used on any railcars that it leases.

Solvay had been working off the premise that the PRVs on its tank cars should be inspected and requalified every three years, an expensive process that can also keep a large portion of rolling stock in the shop for maintenance at one time. However, in 2010 Solvay began using Midland’s Valve Remanufacturing Program, in which customers can send valves that have been in the field back to Midland for testing, inspection, and cleaning before they are remanufactured to OEM standards and returned to the owner with a new manufacturer’s warranty. One of the program’s ancillary benefits is that anytime a valve is sent in to be remanufactured, comprehensive

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PASSING THE ACID TEST

“We approached Midland in 2010 and asked, if we pulled the valves and returned them, could they not only requalify them, but also study them and let us know if three years was too long or too short an interval between inspections?” says Bizzarrot. “That’s where our relationship with Midland as a fact-gatherer began. Since then, we’ve sent about 150 valves to Midland to rebuild and collect data. To date, Midland’s findings are that the interval for the valves can be extended to five years or more, so we have chosen to go to a five-year interval, which is a big savings for us.” Now, Solvay’s fleet of sulfuric acid tank cars not only benefits from using Midland’s PRV technology, but also takes advantage of Midland’s ability to identify and implement a valve-maintenance and requalification cycle that is both ideal for Solvay as a transporter of sulfuric acid and as a way to ensure the safest handling of a highly hazardous commodity. “The Midland folks do the best they can to Tank car angle valve before and after the remanufacturing process. make sure our valves meet our ‘absolute reliability’ performance data is collected that allows Midland to standards for safety when handling sulfuric acid,” says compare the valve’s performance to industry standards and Bizzarrot. “To have the valve manufacturer gather the data let end-users make informed decisions regarding mainteand validate the data at a single location is a huge benefit. nance and compliance intervals. To date, it’s worked like a charm.” RA

W o r l d ’s L a r g e s t C r a n k s h a f t M a n u f a c t u r e r a n d R e - M a n u f a c t u r e r

H e r m i t a g e , PA U S A 1 6 1 4 8 Te l e p h o n e 1 - 7 2 4 - 3 4 7 - 0 2 5 0 w w w . E l l w o o d C r a n k s h a f t G r o u p . c o m September 2014 RAILWAY AGE 59

CRUDE BY RAIL LIABILITY:

A TRIAL LAWYER’S PERSPECTIVE

At an increasingly rapid rate, the surge in crude by rail during the past few years has spawned significant litigation risk for a broadening group of “target defendants.” That’s why it’s important for all entities involved in CBR to be proactive about mitigating such risk.

By DAVID B. POTTER, Esq. and MARIE L. VAN UITERT, Esq., Oppenheimer Wolff & Donnelly LLP, for Railway Age

ank cars have been moving hazardous and flammable materials for more than a century, resulting in numerous significant accidents, lawsuits, and payouts over the past few decades. However, in the past few years, movement of crude oil by tank car has increased dramatically and so have crude oil spills, including the tragic July 2013 Lac-Mégantic derailment in Quebec. This presents the question of whether crude by rail (CBR) is different in terms of liability risks, and if so, how? Our approach to this article is not regulatory or academic. It is a trial lawyer’s approach about the liability risks of CBR in the world of U.S. lawsuits, judges, and juries.

ADDITIONAL RISKS OF CBR

Between 2005 and 2010, the average number of crude oil carloads transported by rail per year was only 7,400. However, starting in 2010, annual crude oil carloads have grown rapidly, with more than 400,000 carloads transported in 2013. With these increases in CBR transportation, there has also been an increase in CBR releases. From 1975 to 2012, 800,000 gallons were spilled. By comparison, in 2013 alone, 2.65 million gallons were spilled. The current risk landscape for CBR presents additional risk when compared with the movement of other hazardous materials by tank car over the past few decades: September 2014 RAILWAY AGE 61

CBR LIABILITY

• Volume: One additional risk is simply the volume of CBR. It is not just that CBR is a higher percentage of overall hazardous materials shipments (crude is the most frequently shipped hazardous material), but we are now shipping much more hazardous material by tank car than ever before. • Notoriety: Constant attention by the media and politicians on CBR, particularly after the Lac-Mégantic tragedy, has brought CBR to the public’s attention in a way that transportation of other hazardous materials by tank car never has. This notoriety has focused more of the plaintiffs’ bar on CBR derailments. Additionally, such notoriety may also have an effect on judges and juries who have to make decisions in CBR litigation. • New target defendants: In serious tank car litigation over the past several decades, plaintiffs’ liability theories have tended to focus on maintenance of tank cars, train handling, and track conditions. As a result, the target defendants have been the railroads. However, shipment of CBR appears likely to broaden the preferred liability theories to include classification (materials carried in a tank car not properly classified); suitability (the tank car not proper for the materials); and routing (the chosen route for the tank car was inappropriate). This, in turn, is likely to result in increased targeting of shippers as key defendants in litigation related to CBR accidents.

• Bakken crude: A substantial amount of CBR comes from the Bakken Shield. There has been a lot of speculation and conflicting analysis about whether Bakken crude is more volatile than other crude, contains residues of fracking materials, and/or causes corrosion. Recently, the DOT released its updated investigation of Bakken crude, concluding that Bakken crude oil has a higher degree of volatility and therefore presents “an increased risk of significant incident.” This controversy surrounding Bakken crude is likely to increase the plaintiffs’ bar’s focus on classification and suitability over what exists for more uniformly understood hazardous material commodities. • Erosion of preemption: Traditionally, preemption has been a very strong defense in tank car derailments. Simply stated, the defense is that if the tank car manufacturer/tank car owner/shipper/railroad is in full compliance with federal regulations (and “internal plans” implemented to comply with those regulations) relating to the movement of hazardous materials by tank car, a plaintiff cannot argue that entity should have done something more or different. In the era of CBR, there have been new regulations (often on an emergency basis), new advisories and recommendations by federal agencies, and new industry recommendations such as CP-1232 for tank cars. A recent example is PHMSA/ FRA’s July 23, 2014 Notice of Proposed Rulemaking

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regarding High-Hazard Flammable Trains (proposing to make new DOT Specification 117 mandatory for tank cars constructed after Oct. 1, 2015 and a phase-out of the Legacy DOT 111A tank cars during the next six years). All of this activity related to CBR does not necessarily change preemption from a strictly academic point of view. Compliance with the regulations and with internal plans required by the regulations should still result in preemption. However, realistically, it is likely to be more difficult to convince judges that preemption prohibits certain types of claims (such as that the Legacy 111-A tank cars being phased out are substandard) from being presented to the jury. Additionally, it may also be more difficult to convince judges that voluntary conduct is not an “internal plan required by regulations” that the shipper, car manufacturer, car owner, or railroad must comply with in order to be granted preemption.

• Attention to internal plans: If regulations require a CBR player to implement an internal plan, that entity should develop an internal plan and document compliance with that plan. Similarly, the industry needs to be careful not to let the plaintiffs’ bar turn industry/railroad’s voluntary efforts/ statements into “internal plans” that may require full compliance in order to use the preemption defense. • Safety focus on new target areas: With the plaintiffs’ bar likely to focus more on classification, suitability, and routing of CBR, entities with potential exposure need to be sure they have the most robust safety programs in those areas. New target defendants: Potential new targets such as shippers and car manufacturers should make sure that they have robust compliance programs and adequate insurance protection for the potential exposure of large derailments. RA

MITIGATION OF CBR RISKS

David B. Potter is an attorney at Oppenheimer Wolff & Donnelly LLP who has been handling and trying significant tank car derailment cases for 20 years, including the 2009 derailment of an ethanol train in Cherry Valley, Ill., which ended in a five-week jury trial in Cook County in late 2011. Marie L. van Uitert is also an attorney at Oppenheimer; she has worked on railroad litigation for the past seven years, including the Cherry Valley derailment.

Given the increase in volume of CBR transport, a broader focus on theories of liability, and a broadening group of target defendants, it’s important for all entities involved in CBR to be proactive about mitigating litigation risk. • Compliance, compliance, compliance: All entities involved in CBR should keep up with all of the new regulations and thoroughly document their compliance.

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WHEEL FAILURES: DIGGING DOWN TO THE ROOTS TTCI joint ventures with Amsted Rail and Texas A&M are exploring the effects of accumulated mileage, high temperatures, and fatigue cracks on vertical split rims.

By KERRY JONES, Principal Investigator, and SCOTT CUMMINGS, Scientist, TTCI, for Railway Age

ertical split rims (VSRs) can cause high impact wheels or partial or catastrophic failure in railroad wheels. They remain an issue for railroads because of safety concerns and train delays. The illustration shows a wheel with a VSR. Transportation Technology Center, Inc. continues to perform research on the root causes of VSRs with funding and direction from the AAR and FRA Office of Research and Development. The search for VSR root causes is focusing on a combination of two likely suspects: residual stresses, and shallow cracks in the wheel rim. Compressive residual stresses discourage the propagation of cracks. Conversely, tensile residual stresses can promote crack growth. Residual stresses are intentionally created during the wheel manufacturing process, with residual compressive stress near the surface of the wheel rim and slight tensile stress deeper in the wheel plate. During service, the residual stresses increase due to cold-working, the strengthening that occurs under heavy loads. The region near the tread surface of the wheel is in residual compression, reacted by residual tension deeper in the wheel rim. Cracks that propagate into the residual tensile stress area of the wheel can become VSR failures. In cooperation with Amsted Rail, TTCI is exploring the effects of accumulated mileage and high temperatures on axial residual wheel stresses. This research has shown a region of significant tensile residual stress becomes established in the wheel rim within the first few thousand miles of service. Elevated wheel temperatures, which can be experienced during prolonged braking, alter the residual stress pattern in the wheel rim. Preliminary results show some evidence that heating the wheel causes residual tension closer to the tread surface, thus potentially promoting vertical crack growth that

could progress into a VSR failure. Additional measurement of the residual stress in heated wheels is under way. (For more information, see “Development of Railroad Wheel Rim Axial Residual Stress in Heavy Axle Load Service” by Cameron Lonsdale, et al., proceedings of the ASME Rail Transportation Division 2013 Fall Technical Conference.) TTCI has also worked with Texas A&M University to model the mechanism of fatigue crack initiation using finite element analysis. This work modeled the evolution of residual stresses in a railroad wheel during rolling contact. The steady-state residual stress patterns predicted by the model agree well with experimental data. Two different analysis methods were applied to the modeling data to determine a likely crack initiation site. Both indices provided very similar results for the theoretical crack initiation site location, about 0.15 inch (4 mm) below the tread surface. The median depth of the vertical crack origin of service-failed VSR wheels is quite close to this prediction (0.17 inch), increasing confidence in the model. This model could be a useful tool in evaluating strategies for crack resistance. Creating a VSR defect in the laboratory has proven difficult. In TTCI’s latest effort, a large slit was cut into the tread of a full-sized 36-inch-diameter wheel to simulate a vertical crack that had already propagated deep into the wheel rim. One of TTCI’s rolling load machines was used for the test, which applied vertical loads as high as 50,000 pounds on the wheel as it was rolled on a reciprocating piece of rail. Ultrasonic testing detected no crack growth from the time of the initial cut. The test was stopped after 1.8 million cycles. Research has improved confidence in working theories for VSR formation, provided insight into wheel temperature as a potential contributor, and produced a computer tool that has potential to evaluate mitigation strategies. RA September 2014 RAILWAY AGE 65

Railroad Resources Simmons Boardman Books and the Railway Educational Bureau Managing Railroad Transportation

All About Railroading By Railway Age Editor William C. Vantuono All About Railroading-Second Edition is the book for new hires and young adults who want to learn the basics of today’s fascinating, high-tech railway industry. Newly revised and expanded from the original edition, All About Railroading presents—in 112 beautifully illustrated pages containing nearly 200 color photographs and diagrams—every aspect of the North American railway industry: freight operations, freight locomotives, freight cars, intercity and commuter rail, light rail, rapid transit, engineering, and signaling & communications. Softcover.

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By Thomas White Managing Railroad Transportation is the third volume in the series on railroad operation. The two volumes of Elements of Train Dispatching discuss railroad operation and transportation management from the point of view of the train dispatcher. Managing Railroad Transportation goes on to the next level, discussing control center management functions, once the domain of the chief dispatcher.An understanding of train dynamics fundamentals (the interaction among grades, curves, tonnage, tractive effort, and horsepower) is essential to railroad transportation management.

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Rules & Regulations Governing Railroad Signal and Train Control Systems • BKSTC • $19.50

Doorway to Safety With Boxcar Doors • BKBD • $20.95

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Introduction to North American Railway Signaling by the Institution of Railway Signal Engineers Introduction to North American Railway Signaling covers the basics of signaling philosophy and techniques. This is the book to reach for if you need information pertaining to signaling systems used in the various rail transportation modes in North America: freight, main-line passenger service, commuter, light-rail, and heavy rail transit. It presents the underlying principles behind modern day signaling practices for the many systems integrated together to keep railroads running safely and efficiently. Softcover, 224 pgs.

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Why BLET is in the catbird seat

With crew consist size on the bargaining table, SMART and BLET forge an uneasy alliance. By FRANK N. WILNER, Contributing Editor

ommitted to work jointly in gaining legislation or regulation mandating two crew members on every freight train are the Sheet Metal, Air, Rail and Transportation Union (SMART) and the Brotherhood of Locomotive Engineers and Trainmen (BLET). The joint quest for minimum crew consist is in response to soon-to-be-implemented Positive Train Control (PTC)— modern technology leaving the role of a second crew-member conductor largely redundant, and whose $12 billion cost screams for offsetting savings by reducing unnecessary crew size if the industry is to meet investor and shipper expectations. Current collectively bargained crew consist provisions require a conductor and engineer aboard most freight trains, but as those provisions expire, carriers gain managerial prerogative to staff trains based on their interpretation of operational needs, which in many cases could mean engineer only. The sought-after legislation has almost a nil chance given anti-union Republican numbers in Congress, while a regulatory edict faces a difficult court challenge assuming the Obama administration even permits a union-inspired Federal Railroad Administration proposed rulemaking to go forward, and could be erased in future years by a new federal railroad administrator. Indeed, data has yet to be presented demonstrating two crew members are needed for safe operation of PTC equipped trains, and labor leaders candidly concede, with regard to new technology, “The industrial landscape is littered with discarded jobs once performed by human beings.” Passenger trains largely operate safely with a lone engineer in the cab, and BLET has long-standing engineer-only agreements with regional railroads on non-PTC equipped lines. But assuming a legislative or regulatory edict does succeed, it is BLET that most likely will reap the spoils, to the chagrin of SMART’s senior leadership and the financial pain of SMART members. We hesitate to term the two unions’ non-belligerence promise in quest of the two-crew-member mandate equivalent to a Molotov-Ribbentrop pact only because of the infamous foreign ministers—Soviet Vyacheslav Molotov and Nazi Joachim von

Ribbentrop—for which the World War II non-aggression treaty is named. But the signing—and violation when Germany attacked the Soviets—well describes the historic relationship between SMART and BLET. These two organizations have broken a truce more often than Israelis and Palestinians. Even BLET’s name drips with sinister rivalry past—the organization having added “trainmen” to its name following uncompromising combat more than a decade ago over whose members would operate remote control locomotives in yards. When UTU won that bitter battle via an arbitration decision, BLET commenced an effort to convince SMART members (then United Transportation Union, or UTU, as the merger creating SMART had not occurred) to defect to its fold, and so changed its name to make it more hospitable to UTU represented trainmen (also known as ground service workers, which are a collection of operating crafts other than engineer). Because of that and other hot-tempered exchanges, few with a grasp of history expect the current era of good feelings and cooperation to endure. A sober assessment places BLET in the catbird seat—holding the upper hand and likely to play it, to the benefit of engineers BLET represents and the detriment of conductors SMART represents. This is why a general committee on SMART has negotiated a tentative agreement (scheduled for a ratification vote earlier this month) to protect the financial security of members and their families if current crew consist levels nose-dive south in the wake of PTC implementation. If such occurs, SMART’s senior leadership has made a strategic error in not backing strongly—and suggesting its expansion elsewhere— this tentative agreement offering career-long unprecedented income protection to SMART members on northern lines of BNSF (RA, August 2014, pp. 16, 18). Note that both SMART and BLET are so structured that bargaining units on individual railroads (called “general committees” within SMART; “divisions” within BLET) have autonomy to negotiate agreements affecting only employees of those railroads represented by such SMART general committees or BLET divisions. In failing to give its backing to the general committee that September 2014 RAILWAY AGE 67

BLET AND SMART

used its autonomy to negotiate this protective agreement on certain BNSF northern lines, SMART’s senior leadership made a promise it may not be able to keep—that is, to deliver, legislatively or through regulation, a two-personcrew mandate. Even if the legislation or regulation succeeds against strong negative odds,

SMART faces another undesirable outcome: BLET succeeding in representing the second mandated crew member—a co-engineer—rather than a SMART-represented conductor lacking engineer qualifications. (Keep reading, as this has to do with BLET’s upper hand, as mentioned. And, yes, it’s complicated, as most significant economic issues are).

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RAILWAY AGE

September 2014

Some suggest that if SMART members reject this tentative protective agreement—in expectation of favorable legislation or regulation— they will have subsequent opportunity to ratify a similar agreement. Think again. BNSF and other carriers are unlikely to repeat so lucrative an offer as has been proffered this summer by BNSF—lifetime income protection and wage and benefits enhancements in exchange for union acquiescence to operate, where safe, one-person crews. BNSF Chairman Matt Rose, according to sources, told one union officer that other carriers considered his offer “too rich.” (A BSNF spokesperson would neither confirm nor deny the conversation.) More important, as each year passes, fewer conductors are protected by the existing crew consist agreement, which was limited to those employed when negotiated decades ago. SMART International Representative John Babler, who helped negotiate the general committee’s tentative protective pact now out for ratification, says, “I suspect that once the number of protected employees gets to be a small minority, [railroads will] buy out the remaining protected trainmen [and remove from assignment those not taking the buy-out] triggering a strike and ultimately a Presidential Emergency Board [that could be appointed by a Republican president with a congressional Republican majority standing ready to impose a carrier-friendly recommendation for settlement].” Open warfare between BLET and UTU over the years largely explains why seven attempts at a UTU-BLET merger failed. Organizations engaged in perpetual warfare find it difficult to exchange vows of love. The warfare exists because craft lines are blurred—but in favor of BLET. Conductors are promoted to engineer. But while a laid-off engineer may use seniority to flow back to a conductor position, conductors must await training and certification to become engineers. Further complicating the relationship between the two organizations is that the Railway Labor Act

BLET AND SMART

We have your solution permits workers in train and engine DIN 41 612 connectors service to satisfy their union-shop agreement through membership with either union. This has resulted in fierce competition between BLE and UTU for members, numerous allegations of raiding of each other’s membership, and even clandestine attempts by UTU to eliminate BLET through a winner-takeall representation. Out of this unpredictably explosive environment comes now BLET and SMART pledging solidarity in pursuing legislation or regulation mandating a two-person crew. Only BLET knows its end-game strategy, but all possible outcomes explain why this era of good feelings Time-tested and still evolving and cooperation Cannot endure, and ■ With 40 years of development, HARTING’s market leading connectors offer solutions for today. why BLET is in the catbird seat (p. 2). ■ Reduced size with one third length versions, mixed contact types In the meantime, a squabble has with hybrid connectors. broken out between the SMART ■ Rugged shell housings address the most demanding applications. ■ Specially loaded variants deliver solutions customized to your need. general committee that negotiated the www.HARTING-usa.com tentative protective agreement and the SMART Legislative Department over the role of a trade union: Is it to put a priority on protecting members’ finanRailway Age 4.5x4875 Thinker.indd 1 cial security as the general committee’s tentative agreement with BNSF seeks to do, or pursue a battle in Washington D.C., where a defeat could have a devastating impact on SMART’s duespaying members and their families? PTC is going to affect crew consist, with only the timing of changes, and the BLET response, uncertain. Difficult challenges, indeed, for SMART’s senior leadership and its members as BLET bides its time in the catbird seat. SMART General Committee Chairman Randy Knudson told his BNSF-employed members, “A collectively bargained sure thing is far better than relying on a law that has no chance of passing or a wishful regulation that will result in years of litigation. Ground service positions have already been lost to what are, by today’s standards, somewhat primitive technological advancements. With PTC and other technologies on the horizon, it is the text-book definition of insanity to employ the same old ‘fight-’em-tillyou-can’t fight-’em-no-more’ strategy and expect a different result.” RA

8/22/2014 4:34:42 PM

September 2014 RAILWAY AGE 69

People

Meetings

HIGH PROFILE Brett Holst has joined Columbus Castings as Executive Vice President Sales and Marketing. Holst brings nearly 30 years of experience in the rail industry. His professional background includes Amsted Industries, Progress Rail Services, and most recently The Timken Company, a $3 billion manufacturer of high performance steel and mechanical components. Columbus Castings is owned by New York-based private equity firm Protostar Partners LLC. Holst “Protostar is excited to welcome Brett to the Columbus team Columbus as his energy and passion for the business, deep industry Castings knowledge, and premier relationships will undoubtedly drive Columbus Castings to achieve greater success,” said Joseph Haviv, managing member at Protostar Partners. “Columbus Castings is dedicated to providing the highest level of customer service and Brett delivers just that.”

September 14-16 ASLRRA Eastern Region Meeting Hershey Lodge, Hershey, Pa. Tel.: 202-628-4500; Email: jbourque@aslrra.org; Website: www.aslrra.org

September 14-16 AARS 118th Annual Meeting Union League Club, Chicago, Ill. Tel.: 331-643-3369; Email: aars@supt.org; Website: www.supt.org

September 21-23 CSX—Ed Jenkins named Vice President Market Strategy e-Business.

Parallel Infrastructure named Brad Balduf Vice President National Sales.

DART—Joseph Costello named Vice President of Finance; Nicole Fontayne named Chief Information Officer.

Plasser American Corp. promoted Dr. Günther Oberlechner to President, succeeding Josef W. Neuhofer, who is now Chairman of the Board. Georg Seyrlehner promoted to Vice President Operations & Production.

KANSAS CITY SOUTHERN—Erik B. Hansen named Vice President Intermodal. Daniel B. Bozung named Assistant Vice President Mechanical Operations. NEW ORLEANS AND GULF COAST RAILWAYS—Scott Wollack promoted to General Manager. SANTA MARIA VALLEY RAILROAD CO.—Brian Wampler appointed Chief Mechanical Officer of the Santa Maria, Calif.-based short line. TNW CORP.—Michael Gibson appointed Director of Health and Safety, reporting to Paul Treangen, CEO of the Dallas-based short line and transportation company. WATCO TRANSPORTATION SERVICES—Ryan Williams named Vice President Marketing-Gulf Region.

SUPPLIERS DVB Transport (US) LLC, New York, named Michael Mahoney Senior Vice President, Land Transport Finance. Encore Rail Systems, Inc. named Greg Spilker Vice President Sales. 70

RAILWAY AGE

September 2014

ASSOCIATION National Association of Railroad Passengers named Jim Mathews President and CEO.

100 YEARS AGO in

(SEPTEMBER 1914) WAR AFFECTS U.S. RAILROADS The embargo on freight for export to Europe, which was placed by the trunk lines soon after the opening of [World War I], was lifted August 29 to the extent of announcing that freight would be accepted if prepaid to the Atlantic seaboard, and if, before shipping it, arrangements had been made with the steamship agents. No through export bills of lading can be issued until contract for ocean transportation has been made through foreign freight agents, and all through export bills of lading must have attached the ocean condition war clause, as required by transatlantic lines. The export movement of flour during the past two weeks has been unusually heavy.

RSI/CMA 2014 Palais des congrès de Montréal (Montreal Convention Center), Montreal, Quebec Tel.: 202-347-4664; Email: patrick@rsiweb.org

September 23-26 InnoTrans 2014 Berlin, Germany Tel.: 732-933-1118; Email: mjbalve@globaltradeshow. com; Website: http://www. innotrans.de/en/

September 24-25 North Carolina Railroad Co. Rail Forum: Progress in Motion Raleigh, N.C. Tel.: 919-954-7601; Email: NCRR_info@ncrr.com; Website: http://www.ncrr.com/newsevents/ progress-in-motion-forum/

September 28-October 1 AREMA 2014 Annual Conference & Exposition Chicago, Ill. Tel.: 301-459-3200, ext. 705; Email: lhamilton@arema.org; Website: www.arema.org

October 12-14 ASLRRA Southern Region Meeting Naples, Fla. Tel.: 202-628-4500; Email: jbourque@aslrra.org; Website: www.aslrra.org

I’m looking for some insight on Positive Train Control.

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Railway Age has assembled a world-class collection of experts on a wide range of subjects in the world of rail, to get the answers that are important to Railway Age readers. This new paid service, The Railway Age Expert Network, offers you access to 27 experts on a broad range of rail topics.

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Products Railhead LED ZTR low-profile, programmable headlight/ditchlight Locomotive Axle Generator™ modern, low-profile design, is for locomotives field-configurable, easy-to-install, Railhead has introduced its new RVS-PAR56-75VLED, an FRAcompliant locomotive LED headlight. Operating in both the headlight and ditchlight locations, Railhead’s LED does not need to be tethered like other LED headlights, which simplifies the installation process. Its design incorporates military grade LEDs, an ice melting heat sync, and a patent pending circuit configuration, making it the longest-lasting solution available on the market, with a threeyear warranty. Information: ww.railheadcorp. com, email tpoulsen@ railheadcorp.com, (800) 235-1782.

ZTR now offers its Locomotive Axle Generator™ in a PCD (pitch circle diameter, also known as BCD, or bolt circle diameter) 6 X 4.5 bolt pattern. The new device is designed for nonTimken bearings, and complements ZTR’s Locomotive Axle Generator™ for Timken bearings, launched in late 2013. It converts the rotation of a locomotive wheel into electrical signals that are readable by most speed indicator displays and event recorders. “Like axle generator for Timken bearings, this one features a

and replaces most existing axle generators,” said ZTR Product Development Manager Dave Brooks. “It mounts with a typical 6 x 4.5 PCD bolt pattern. The pulse per revolution (PPR) signal is programmable, so this device can replace virtually any older unit. Its low-profile design means it is less likely to get damaged from impact. The IP69K rating prevents water and oil from getting inside and freezing, increasing reliability.” For more information, visit www. ztr.com/axle, email railinfo@ztr.com, or call 952-233-4340. ZTR will be exhibiting at RSI/CMA in Montreal, Quebec, September 21-23, booth #401, and at InnoTrans in Berlin, Germany, September 23-26, Hall 6.2, Stand 509.

September 2014 RAILWAY AGE 73

Products Railway Equipment Company Cragg™ battery chargers Railway Equipment Company (RECO) offers two new Battery Chargers in its Cragg™ line, the DTC and SMC (SMartCharger), which focuses on providing a variety of solutions for different needs throughout the railroad industry. The DTC offers a combination of features such as a battery voltage monitor with relay output, remote voltage sensing, and temperature compensation. Together, the objective of these features is extending battery life, providing monitoring of temperature increases and drops, and internally adjusting the DC output based on battery temperature, making it more efficient for a longer period of time. In addition, the use of a digital display versus the older analogue dials increases the simplicity of setup and usage. The SMC is 90% more efficient

RAILWAY AGE

September 2014

and significantly smaller and lighter weight. It uses a switch mode supply vs. a traditional transformer, ensuring it meets new State of California energy efficiency standards. Both models offer a full line of 10 amp through 60 amp units and share the same user interface. Energy efficiency was not the only focus when developing these new chargers; RECO enlisted the help of its partner company, RRAMAC, to introduce the SNO-NET™ web-based remote monitoring system. This “net ready” connectivity enables the user to access real-time data such as voltage, current, and temperature via a secured site where they can monitor trends and set up email notifications and alerts to inform them when a change occurs outside their parameter settings. For more information, access the RECO website at www.rwy.com.

Dieselcraft Model 5x32 Fuel Purifier Todayâ&#x20AC;&#x2122;s diesel fuel contains more water than the fuel of just a few years ago. Water is the greatest concern because it is the most common form of contaminant. Water can be introduced into the fuel supply during fueling when warm, moisture-laden air condenses on the cold metal walls of fuel storage tanks or from poor housekeeping practices. The effects of water in diesel fuel can be serious, because it displaces the diesel fuel. Wear occurs because lubrication is absent. The problem is compounded once microbes are present: Bacteria plus water plus oxygen equals more bacteria plus carbon dioxide plus more water. This scenario isnâ&#x20AC;&#x2122;t good for fuel. Dieselcraft Fluid Engineering has developed a new Model 5x32 Fuel Purifier that removes 99.997% of the visible water at flow rates up to 12 GPM and more than 95% of the large

contaminates. This is all done without the use of replaceable, changeable, or cleanable filter elements. There are no moving parts, no elements to clean and dispose of, only purging of water and particulates. This new model is ideal for those that need to incorporate a fuel polishing system on a fuel storage tank. It can be mounted on the engine, at the fuel dispensing pump, where it cleans the fuel before it goes into a vehicle, or in a fuel polishing and re-circulating application to maintain stored fuel. Dieselcraft Fluid Engineering manufactures fuel purifiers to fit any application. See www.dieselcraft. com/diesel-fuel-purification-systems. php, or contact John T. Nightingale, Dieselcraft Fluid Engineering, P.O. Box 7670, Auburn, CA 95604; Tel.: 530613-2150; Email: sales@dieselcraft. com.

September 2014 RAILWAY AGE 75

Do you have the most up-to-date FRA Regulations?

Reb Says...

Use this handy index to verify that you have the most up-to-date version of the FRA regulations. The left-hand column lists the FRA Part number and the right-hand column list the latest revision date. Items highlighted in red denotes recent changes. (IFR = Interim Final Rule) FRA Part #

Last Update Effective:

FRA Part #

Last Update Effective:

FRA Part #

Last Update Effective:

40 . . . . . . . . .10-3-12 209 . . . . . . . .2-12-13 210 . . . . . . . .8-14-89 211 . . . . . . . .7-20-09 213 A-F . . . . .3-25-14 213 G . . . . . .7-11-13 214 . . . . . . . . .7-1-14 215 . . . . . . . .6-25-12 216 . . . . . . . .6-25-12 217 . . . . . . . .6-25-12 218 . . . . . . . .6-25-12

219 220 221 222 223 224 225 228 229 230 231

. . . . . . . . .5-6-13 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . . .1-1-14 . . . . . . . .6-25-12 . . . . . . .12-19-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12

232 233 234 235 236 237 238 239 240 242

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .5-14-13 . . . . . . . .6-25-12 . . . . . . . .7-13-12 . . . . . . . .6-25-12 . . . . . . . .1-28-14 . . . . . . . .1-28-14 . . . . . . . .6-25-12 . . . . . . . .6-25-12

Mechanical Department Regulations

The following is a list of booklets reprinted from the Department of Transportation Code of Federal Regulations 49 CFR Parts 200 to 399 that apply to the rail industry. They are printed in a convenient format and are kept current with updates from the Federal Register which may be supplied in supplement form. Item FRA 50 or Code Part # Each more

209 211 BKTSSAF 213 BKTSSG 213 BKWRK 214 BKFSS 215 BKROR 217 218 BKRRC 220 BKEND 221 BKSEP

Railroad Safety Enforcement Procedures & Rules of Practice Track Safety Standards (Subpart A-F) Track Safety Standards (Subpart G) Railroad Workplace Safety Railroad Freight Car Safety Standards Railroad Operating Rules and Practices Railroad Communications Rear End Marking Device, Passenger, Commuter & Freight Trains BKHORN 222 Use of Locomotive Horns BKRFRS 224 Reflectorization of Rail Freight Rolling Stock BKHS 228 Hours of Service BKLSS 229 Locomotive Safety Standards BKSLI 230 Steam Locomotive Inspection BKSAS 231 Railroad Safety Appliance Standards BKBRIDGE 237 Bridge Safety Standards BKLER 240 Qualification and Certification of Locomotive Engineers BKCONDC 242 Conductor Certification BKBSS

232

Brake System Safety Standards

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4.95 4.50

13.25 6.25

11.95 5.60

10.50 11.00 22.95 9.35 6.25 12.75 11.00 Each

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Part 240–Qualification and Certification of Locomotive Engineers

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Ad Index Company

Phone #

Fax

URL/Email address stuart.kiernan@skf.com

Page #

AB SKF

+01506538176

Alcoa Fastening Systems/Huck

800-388-4825

254-751-5259

stu.millard@alcoa.com

Alstom Transport SA

+0033157069491

+0033141668843

elaine.west@transport.alstom.com

APTA

410-978-9174

lriggs@ntpshow.com

Amsted Rail Group

312-922-4516

312-922-4597

kskibinski@amstedrail.com

Arthur N. Ulrich

740-927-8244

740-927-6017

tulrich@anu-co.com

Balfour Beatty Infrastructure, Inc.

888-250-5746

904-378-7298

info@bbri.com

Birmingham Rail & Locomotive

205-424-7245

205-424-7436

bhamrail@aol.com

CAF Power & Automation

+34 9433 13 363

Antonia@suscreativos.com

Cyclonaire Corp.

402-362-2000

402-362-2001

sales@cyclonaire.com

Danella Rental Systems, Inc.

610-828-6200

610-828-2260

pbarents@danella.com

Diesel Electrical Equip.

219-922-1848

219-922-1849

dieseleqpt@aol.com

Dixie Precast

770-944-1930

770-944-9136

fbrown142@aol.com

Ellwood Crankshaft & Machine

724-347-0250

724-347-0254

ecgsales@elwd.com

FreightCar America

312-928-0850

312-928-0890

tbaun@freightcar.net

GE Transportation

814-875-2099

513-786-2540

chris.banocy@ge.com

Georgetown Rail Equipment Co.

512-869-1542 ext. 228

512-863-0405

karen@georgetownrail.com

Greenbrier Companies The

800-343-7188

503-684-7553

gbrx.info@gbrx.com

HARTING, Inc. of North America

847-204-4970

847-741-8257

bob.Laskowski@harting.com

Herzog Railroad Services, Inc.

816-233-9002

816-233-7757

tfrancis@hrsi.com

Holland Co.

708-672-2300 ext.382

708-672-0119

gpodgorski@hollandco.com

Hotstart

509-536-8667

509-534-4216

mfloyd@kimhotstart.com

Kelso Technologies

630-495-1151

630-396-9069

schwartz@kelsotech.com

Knoxville Locomotive Works

865-525-9400

865-546-3717

goklw.com/contactus

LORAM

763-478-6014

763-478-2221

sales@loram.com

LTK Engineering Services

215-641-8826

215-542-7676

tfurmaniak@ltk.com

MAC Products

973-344-0700

973-344-5891

edward.gollob@macproducts.net

Michael Baker Jr., Inc

781-255-7200

847-677-0138

david.wilcock@mbakerintl.com

Midland Manufacturing

847-677-0333

sales@midlandmfg.com

Miner Enterprises

630-232-3000

630-232-3055

sales@minerent.com

MTU

248 560 8484

248 560 8485

bryan.mangum@tognum.com

New York Air Brake Corp.

315-786-5431

315-786-5676

janice.pheile@nyab.com

NRE

618-241-9270

618-242-8519

sales@nre.com

Okonite Co.

201-825-0300

201-825-3524

info@okonite.com

Pandrol USA, Inc.

1-800-221-CLIP

856-467-2994

Penn Machine Co.

412-279-4460

412-279-4465

pmcsales@pennmach.com

Pettibone

800-GoPettibone

906-353-6325

info@GoPettibone.com

Phoenix Contact

800-888-7388

717-948-3475

info@phoenixcon.com

Plasser American Corp.

757-543-3526

757-494-7186

plasseramerican@plausa.com

Power Drives, Inc.

716-822-3600

716-824-4817

r.panzica@powerdrives.com

Progress Rail Services

256-505-6402

256-505-6051

info@progressrail.com

R&W Machine Division

708-458-4200

708-458-3299

jwarner@rwmachine.com

Railhead Corp.

773-779-2400

773-779-0231

jdonnan@railheaddcorp.com

Railquip Inc

770-458-4157

770-458-5365

sales@railquip.com

Railroad Financial

312-222-1383

312-222-1470

msilverman@railfin.com

Rails Co.

973-763-4320

973-763-2585

rails@railsco.com

Railway Educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

3 9 34

22 66, 72, 76

RJ Corman Railroad Group

800-611-7245

859-885-7804

www.rjcorman

S & C Distribution Co.

708-396-1755

708-396-1754

info@sandcco.com

Sealeze Unit of Jason, Inc.

804-275-1675 ext.235

800-923-4824

smaclaughlin@sealeze.com

Siemens-Rail Automation

502-244-7400

502-253-3760

bob.coffman@invensys.com

SMBC Rail Services LLC

312-559-4800

888-4RAILCAR

sales@smbcrail.com

Soft Rail

888-872-4612

sales@signalcc.com

Star Headlight & Lantern

585-226-9500 ext.137

585-226-2029

chrisjacobs@star1889.com

Strato

732-317-5406

732-981-1222

korozco@stratoinc.com

Trackmobile LLC

706-884-6651 ext.229

706-884-0390

keithsellers@trackmobile.com

Trainyard Tech LLC

724-443-8881

cra2@zooninternet.net

TrinityRail

800-631-4420

214-589-8623

info@trinityrail.com

TTX Company

312-606-1450

Wi-Tronix LLC

630-679-9927 x307

630-679-9954

felix.castillo@ttx.com

fcozzi@wi-tronix.com

September 2014 RAILWAY AGE 77

PRODUCTS & SERVICES

EQUIPMENT SALE/LEASING

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RAILWAY AGE

September 2014

EQUIPMENT SALE/LEASING

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Railcars for Lease:

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· 52’-2500 Cu.Ft. Mill gondolas—263 GRL Contact: Elliot Lewis-(479) 802-5207 or el@everestrailcar.com www.everestrailcar.com

SIGNAL MAINTAINERS Indiana & Ohio Railway, a company of Genesee & Wyoming

Available for Lease 3600 cu ft Open Top Hopper Cars 100 ton Automated/Manual Ballast Cars 4480 cu ft Aluminum Rotary Open Top Gons Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

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TRAINING

Part 243 Training & Certification Part 242 Conductor Training Part 240 Engineer Training and re-certification -------------------------------------------------------Modoc Railroad Academy 916-965-5515 info@modocrail.com Find your rail industry job opportunities at www.railwayage.com

MARKETPLACE SALES Contact: Jeanine Acquart Ph: 212/620-7211 Fax: 212/633-1165 Email: jacquart@sbpub.com

ALL MAJOR CREDIT CARDS ACCEPTED September 2014 RAILWAY AGE 79

Financial edge DAVID NAHASS

Factors affecting this year’s “equipment harvest”

all is the season of the harvest. This is true for the farmers working their wheat, corn, and soybeans, but also true for many railcar owners. As important as bushel prices are to the farmer, determining what will be shipped to market or moved to storage, the fall brings a harvest mindset to the rail investor. Periodic harvesting from existing railcar fleets is an occurrence that is almost as regular as planting cycles for commodities moved by railcar. In this context, the term “harvest” means to sell certain assets at a profit and to take gains on past successful investment decisions or, alternatively, to eliminate or to pare down positions in less optimal or non-earning assets (not always profitable decisions). Harvesting equipment from a portfolio does several important things. Perhaps most important, harvesting is an opportunity to take some profits and realize the benefits of good investment decisions. Harvesting for profit is like a pat on the back, a way to say “good job!” Harvesting for profits allows companies invested in rail assets to “pop” cash (book) gains to the bottom line as needed to help smooth out balance sheet issues that may arise quarter to quarter or at the end of a fiscal cycle. In the same way that futures provide a point of view on the current market for wheat, corn, or soybeans, the harvest season in rail equipment gives a window to any potential seller about the health of the overall rail market, the depth and breadth of the current pool of rail investors. Organized asset sales provide a barometer on asset valuations, on whether there is optimism or pessimism regarding the lease market for railcars, and on the number of new entrants that might be in the operating lessor market. Sophisticated equipment lessors know that being one step ahead of your

RAILWAY AGE September 2014

competition is helpful in a tight market like the one that exists today. Harvesting is one way the savvy investor does reconnaissance on the competition. A secondary reason that companies engage in harvesting is that putting equipment up for sale provides owners real-time data on asset values. For all the collective knowledge a company may have (real or hypothetical), nothing is more fundamental than real-time market knowledge provided through a competitive bid process to tell an investor what its assets are worth.

As with everything in the railcar equipment market, there is plenty of rumor and information sharing. For a large operating lessor, a sale of one group of 4,750 cubic-foot covered hoppers will provide a “real-time” value for every 4,750 in that lessor’s fleet. Off this data, a lessor may adjust those values to account for differences in lease term, lease rate, and lessee credit quality. Additionally, obtaining knowledge about the value of the equipment in a lessor’s fleet is as important today as it ever has been. Readers of this column are certainly aware of the growth in demand for cars for hauling frac sand

and of the overwhelming demand and massive uncertainty regarding DOT 111A tank cars. For covered hoppers hauling sand, some investors are expressing concern that an almost two-year-long backlog is trending toward overbuilding. A harvesting event that includes small-cube covered hoppers can provide a market-based opinion on the asset, limit exposure, and monetize positions taken before a shift in the balance between supply and demand. For DOT 111A tank cars, the situation is potentially magnified. Investors have the same potential concerns about overbuilding (due to the potential for pipelines to replace crude by rail opportunities). There are additional concerns that stem from the impending DOT equipment specification changes that are currently in the comment stage. While the final result of the DOT specification change is unknown, all parties can generally agree that crude oil being moved in 30,000-gallon non-coiled and non-insulated tank cars will have to move to a new or modified car. All lessors that have exposure to this market are at a crossroads. In the next two to three years, they will need to decide if cars need to change service, be modified, or be scrapped— tough decisions when you are talking about (depending on the lessor) up to thousands of cars in a fleet. Using the market at large to provide feedback on the risk and reward profile of investments in those asset classes sounds like a shrewd maneuver right about now. As with everything in the railcar equipment market, there is plenty of rumor and information sharing. A keen eye and ear might let you know what the market is thinking even if you are on the sidelines during this year’s equipment harvest. Questions? Dnahass@railfin.com.

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