September 2016 Railway Age by Railway Age

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RailwayAge

SEPTEMBER 2016

visit us at www.railwayage.com Features Class I Focus: Union Pacific 26 Freight Cars Market

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Transit Focus: Portland

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On the Cover Union Pacific GE Transportation ES44AC no. 7786, UP classification C45ACCTE Photo: Union Pacific 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. 217, 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 of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, PO Box 3135, Northbrook, IL 60062-2620, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital). September 2016 Railway Age 1

From the Editor William C. Vantuono

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

UP, conserver of crustaceans

he next time you sit down to an inexpensive fried seafood meal containing farm-raised fillet of fish or shrimp at an eatery like McDonald’s or Arthur Treacher’s, think of Union Pacific, and contemplate that, were it not for a sustainable engineering project conducted by this railroad on Utah’s Great Salt Lake, you might not have the opportunity to tickle your tastebuds and compromise your cholesterol. Good God, what’s Vantuono talking about now? Say that again? It’s not as fishy a fable as you might fathom, notwithstanding Wall Street hedge fund sharks who have made a killing, slithering away into the abyss with billions in railroad-derived profits in seek of their next target (p. 21). UP, through a very praiseworthy project, is largely responsible for making sure that a tiny crustacean found in the Great Salt Lake, the brine shrimp, is in abundant worldwide supply (p. 26). I’ll let UP explain this Forrest Gump-like, salty synergy of railroad engineering, sustainability and good citizenship (edited for space). Picture UP’s 20-mile-long causeway over the Great Salt Lake (originally constructed by the Southern Pacific), and two disintegrating culverts that were filled in for safety reasons, lest they collapse: “With the culverts closed, water only permeates through the rock-fill causeway, meaning significantly less water and salt passes from the south arm of the lake into the north arm. Over time, the north arm has grown saltier, and the south less saline, thanks to three contributing fresh-water rivers. This imbalance impacts Utah’s economy. Companies mine magnesium and natural salts from the lake. The saltier the lake, the more they can mine. “Then there’s the brine shrimp, another major Utah export. Extreme salinity levels aren’t compatible with the tiny crustaceans, which can’t survive in water that’s too salty or too fresh. Brine shrimp eggs are used in aquaculture to feed some types of fish and baby shrimp that don’t survive well on arti2

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ficial feed. Utah produces one-third of the world’s brine shrimp supply, which contributes $57 million annually to the state’s economy. If the Great Salt Lake’s brine shrimp population starts to decline, it could negatively impact worldwide seafood prices (and drive up the price of your McDonald’s Fillet of Fish sandwich). “Brine shrimp also are an important part of the Great Salt Lake’s unique ecological system. Along with brine flies, they are the main food source for migratory birds. The lake is a massive refueling station for birds as they complete migrations from places like South America, Russia and Mexico. The Eared Grebe actually doubles its weight eating the lake’s brine shrimp before completing its migration south. “Restoring the water flow between the north and south sides of the lake is critical to Utah’s economy and ecosystem. An updated U.S. Geological Survey computer model that simulates how the Great Salt Lake’s water and salt flowed through the causeway and its culverts allowed UP to determine what bridge width and depth would duplicate the amount of water and salt transfer the culverts originally provided. “UP, the U.S. Army Corps of Engineers and a Utah State University study determined that a 180-foot bridge, along with an adjustable earthen control berm, would strike the best salt balance. “The berms are very progressive. They can be built up or removed. This solution is adaptive. In 20 years, if it’s determined that something’s not quite right, or ecosystems are declining, there’s something that can be done to manage salt transfer. It’s an innovative and elegant solution.” An innovative and elegant solution, indeed. It is the kind of project railroads and the creative people in their engineering departments can devise, to keep the water— and the trains—flowing.

ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com BEN VIENT, Managing Editor bvient@sbpub.com Contributing Editors: Roy H. Blanchard, Alfred E. Fazio, 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: Nicole Cassano Graphic Designer: Aleza Leinwand 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 International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, db@railjournal.com Keith Barrow, kb@railjournal.com Kevin Smith, ks@railjournal.com 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 3135, Northbrook, IL 60062-2620, 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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Industry Indicators SHORT LINE AND REGIONAL TRAFFIC INDEX

TRAFFIC ORIGINATED CARLOADS MAJOR U.S. RAILROADS

FOUR WEEKS ENDING JULY 30, 2016

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 ’16 95,142 2,544 36,045 23,892 120,387 42,296 331,277 4,823 12,598 22,416 26,734 17,978 34,697 14,298 58,501 89,868 18,681 31,505 16,510 25,175 1,025,367

JULY ’15 82,501 2,951 38,095 24,154 121,022 54,222 401,756 6,155 13,517 25,088 28,504 16,522 38,721 16,532 65,389 101,633 18,796 33,934 13,110 22,295 1,124,897

% CHANGE 15.3% -13.8% -5.4% -1.1% -0.5% -22.0% -17.5% -21.6% -6.8% -10.7% -6.2% 8.8% -10.4% -13.5% -10.5% -11.6% -0.6% -7.2% 25.9% 12.9% -8.8%

276,467

306,810

-9.9%

1,301,834

1,431,707

-9.1%

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

COMBINED U.S./CANADA RR INTERMODAL MAJOR U.S. RAILROADS by Commodity TRAILERS CONTAINERS TOTAL UNITS

FIVE WEEKS ENDING JULY 30, 2016

Railroad employment, Class I linehaul carriers, JULY 2016 (% change from JULY 2015)

JULY ’16 81,334 921,067 1,002,401

JULY ’15 113,942 962,941 1,076,883

% CHANGE -28.6% -4.3% -6.9%

3,797 237,666 241,463

6,012 242,365 248,377

-36.8% -1.9% -2.8%

Transportation (train and engine) 58,934 (-16.07%)

85,131 1,158,733 1,243,864

119,954 1,205,306 1,325,260

-29.0% -3.9% -6.1%

Total employees: 152,718 % change from JULY 2015: -10.71%

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

Source: Monthly Railroad Traffic, Association of American Railroads

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

Average Weekly U.S. Rail Carloads: All Commodities 350,000 340,000 330,000 320,000 310,000 300,000 290,000 280,000 270,000 260,000 250,000 240,000 230,000 220,000

2014

2015

2016

Jan Feb Mar Apr May Jun

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September 2016

Maintenance of Equipment and Stores 28,496 (-8.56%)

Professional and Administrative 13,695 (-6.06%)

Maintenanceof-Way and Structures 36,201 (-5.86%)

Source: Surface Transportation Board

2009

Jul Aug Sep Oct Nov Dec

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

Executives, Officials, and Staff Assistants 9,276 (-6.40%)

Transportation (other than train & engine) 6,116 (-8.95%)

2006 (peak year)

% CHANGE -3.4% -12.7% -21.8% -6.7% 22.9% -0.6% -8.1% -29.2% -17.7% -10.2% -20.7% 6.0% -10.3% 7.2% -11.2% -9.9% 4.3%

JULY 2016 - 342,092

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED JULY ’15 46,147 23,321 30,846 11,162 22,021 6,410 9,464 4,345 17,679 9,582 2,752 1,976 19,348 12,633 50,070 10,312 81,854

TOTAL CARLOADS, JULY 2016 vs. 2015

CANADIAN RAILROADS ALL Commodities

ORIGINATED JULY ’16 44,560 20,356 24,119 10,419 27,066 6,374 8,701 3,078 14,546 8,606 2,182 2,094 17,350 13,542 44,462 9,296 85,341

BY Commodity

class I employment dropS ON YEAR, BUT STEADY ON MONTH Figures released by the STB show Class I total railroad employment dropped 10.71% in July 2016, measured against July 2015. But total railroad employment rose very slightly compared to June 2016, rising 0.19%. On the yearly comparison, Transportation (train and engine) dropped the most at 16.07%, followed by Transportation (other than train & engine), which dropped 8.95%, followed by Maintenance of Equipment and Stores, which dropped 8.56%.

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Industry Outlook

Charger burning up the rails in Pueblo Siemens’ new higher-speed Charger diesel-electric passenger locomotive is undergoing a comprehensive testing program at the Transportation Technology Center Inc. (TTCI) in Pueblo, Colo., prior to entry into revenue service in various U.S. locations. Several tests and validation exercises including maximum speed runs, acceleration and braking and the overall performance capabilities of the locomotive are being conducted to ensure the Charger “is operating and performing as designed and that the locomotive is ready to provide reliable service for passengers,” Siemens said. The Charger is powered by a highperformance, environmentally friendly,

4,400 hp-rated Cummins QSK95 diesel engine. Designed to operate at speeds up to 125 mph, it is the first higher-speed passenger locomotive to receive Tier 4 emissions certification from the U.S. Environmental Protection Agency. It obtains an emission reduction of approximately 90% compared to locomotives powered by Tier 0 power plants. An electronically controlled regenerative braking system use energy from the traction motors during dynamic braking to feed the auxiliary and HEP (head-end power) systems to reduce fuel consumption. The locomotives also meet the latest FRA safety regulations, including enhanced carbody structural safety

with CEM (crash energy management). All main components are produced in Siemens plants in the U.S. The first Chargers were ordered under a $225 million contract awarded in 2014 by a multi-state coalition led by the Illinois Department of Transportation (IDOT). Since then, options have been exercised by six states including Illinois, California, Michigan, Washington, Maryland and Missouri. In addition, the first Siemens-built trainsets for the new Brightline passenger service in Florida, each powered by two Chargers, will ship this fall. IDOT will receive its first Charger later this year, with additional customers to follow throughout 2017.

Canada speeds up phaseout of DOT-111 tank cars Canadian Minister of Transport Marc Garneau recently announced Protective Direction 38, which accelerates the phasing out of DOT-111 tank cars for crude oil service to Nov. 1, 2016. The accelerated timeline will phase out unjacketed legacy DOT-111 tank 6

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cars six months early and legacy jacketed DOT-111 cars 16 months early. Legacy DOT-111 tank cars are considered to be the least crash resistant cars still being used in crude oil service. They will be replaced by tank cars such as the DOT/TC-117, which

is designed with a number of additional safety features, including thicker steel, full-height head shields, thermal protection and top fitting protection. In 2015, more than 146,000 carloads of crude oil were shipped throughout Canada by rail.

Industry Outlook FRA cracks the quarterly whip on PTC rollout

A quarterly status update released last month by the Federal Railroad Administration shows that the agency has received seven of the approximately 38 PTC Safety Plans it is expecting, “which FRA must evaluate and approve before it can grant PTC System Certification under 49 CFR part 236, subpart I.” “An additional 13 railroads plan to submit a PTC Safety Plan to the FRA in 2016, but the majority of submissions are not expected until 2018, according to the railroads’ annual progress reports.” FRA said. “Submission and approval of a PTCSP does not mean a railroad has completed PTC implementation on all necessary track segments; a railroad may submit a PTC safety

plan when it believes there is enough data to support its safety case for system certification.” “The PTC technology being installed is revolutionary and is a full-time focus of the nation’s freight railroads, which continue to work all-out on PTC testing and installation and to move this complex safety system from concept to nationwide reality across the country as quickly as possible, without sacrificing safety,” the AAR told Railway Age. “Freight railroads have spent more than $6.5 billion of private money on PTC to this point, and the industry expects final costs to top $10.5 billion by the time PTC is completed” FRA said it awarded nearly $25

million in grants during August 2016 to help railroads complete full PTC implementation. “Many of the awards will help railroads achieve interoperability among the different PTC systems that railroads are deploying,” FRA said. “This follows DOT’s announcement in July that commuter railroads and states can apply for approximately $199 million in PTC grants.” FRA said that the Obama Administration “has consistently made funding and assistance for commuter railroads to implement PTC a priority. In his Fiscal Year (FY) 2017 budget request, the President requested $1.25 billion. This follows requests of $825 million in both FY 2015 and FY 2016. Since 2008, FRA has provided significant assistance to support railroads’ PTC implementation.” Among those efforts: • Approving more than $650 million in grants to passenger railroads, including nearly $400 million in ARRA funding. • Issuing a nearly $1 billion loan to the New York MTA to implement PTC on the Long Island Rail Road and MetroNorth Railroad. • Building a PTC test bed at TTCI in Pueblo, Colo. • Working directly with the FCC and the Advisory Council on Historic Preservation to resolve issues related to spectrum use and improve the approval process for PTC communication towers.

MassDOT installs Director of Sustainable Mobility Jackie DeWolfe (left) has been appointed to the newly created position of Director of Sustainable Mobility for the Massachusetts Department of Transportation (MassDOT). DeWolfe, who previously served as executive director of LivableStreets Alliance, will be responsible for coordinating activities throughout MassDOT that enhance multi-modal transportation, and for developing new ideas. A key responsibility of this position is convening multi-disciplinary teams from across MassDOT, and coordinating with 8

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municipal partners, other state agencies, and nonprofit partners to drive change that will help the state meet its healthy transportation goals. “It is an exciting time to join MassDOT,” said DeWolfe. “It is also a pivotal moment as the Commonwealth and communities all across the country are grappling with how to reduce greenhouse gas emissions and traffic, and improve safety, mobility and sustainability. I look forward to working with diverse teams to tackle these important issues and pilot new ideas.”

Technology and Innovation Paired with Purpose PTC solution for safe and efficient train operations

Implementing a comprehensive PTC solution requires consistent and flawless engineering, forward thinking, and innovations. Based on a 160-year heritage of successful systems engineering, Siemens Rail Automation is an established leader in rail product and system engineering. With the customer in mind, Siemensâ&#x20AC;&#x2DC; focus is on designing, testing and implementing the most flexible, scalable and integrated PTC solution.

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Market

For Caltrain, 16 KISSes from Stadler Peninsula Corridor Joint Powers Board (Caltrain) CEO Jim Hartnett and Stadler Group CEO Peter Spuhler last month signed a $551 million contract for 16 KISS (Komfortabler Innovativer Spurtstarker S-Bahn-Zug) EMUs. Stadler’s Caltrain contract includes an option for an additional 96 cars worth $345 million. It marks the first time that Stadler has sold KISS trainsets in the U.S., and is also its seventh and largest U.S. contract. KISS EMUs measure 515 feet, 3 inches (157.1 meters) in length. The standard-gauge trains have a maximum operating speed of 110 mph (177 kph). The six-car trains are extendable to seven-car or eight-car units. Stadler will deliver the first KISS to Caltrain in August 2019. Trainsets are expected to begin entering revenue service in 2020 following conditional acceptance and type testing.

North America Los Angeles unveiled the first Tier 4 Metrolink F125 locomotive, scheduled to enter service at the end of 2016. The F125 will reduce particulate matter (PM) and NOx emissions by up to 85%, compared to Tier 0 units. First Transit signed its first rail contract in North America with the Denton County Transportation Authority, Texas. Siemens’ new 60,000 square-foot rail service headquarters in Sacramento, Calif., is now fully operational. Bombardier received an order from Toronto and Hamilton transport authority Metrolinx for an additional 125 Bi-Level coaches for the GO Transit commuter rail network in a deal worth C$428 million (US$328 million). 10

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Central Maine & Quebec Railway (CMQ), Railway Age’s 2016 Regional Railroad of the Year, took delivery of its first of eight rebuilt ElectroMotive Diesel (EMD) GP38-3 locomotives, no. 3812. Brookville Equipment Corp.’s fourth off-wire-capable Liberty Streetcar departed for Dallas six months ahead of its contractual delivery date. Ontario Northland Railway unveiled the first refurbished Polar Bear Express coach. CAF Mexico won a €164 million contract from Mexico City’s Collective Transport System (STC) for 10 nine-car rubber-tired metro trains for Line 1. Metra temporarily suspended its search for a vendor to supply 367 double-deck gallery-style commuter

rail coaches, due to “capital availability changes.”

Worldwide KiwiRail of New Zealand approved the acquisition of 15 additional DL class locomotives from CRRC Corp. (China) subsidiary Dalian Locomotive and Rolling Stock for delivery in 2018. Berlin Transport (BVG) exercised an option with Stadler Pankow for 27 additional type IK small-profile U-Bahn trains, increasing the total number of trains on order to 38. Alstom will expand Lima, Peru’s metro with 20 new six-car Metropolis 9000 trains and lengthen the existing fleet of 19 Metropolis trains from five to six cars.

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Update Supply Briefs Salient Systems ISO 9001:2008 Certification furthers quality management initiative

Wick Moorman named Amtrak chief executive

L.B. Foster’s wholly owned subsidiary, Salient Systems, Inc., achieved ISO 9001:2008 Certification in the second quarter of 2016. This facility engineers and manufactures remote infrastructure and vehicle monitoring devices and software for the global rail industry. Salient Systems, based in Dublin, Ohio, joins 13 other locations within L.B. Foster’s Rail Business that are part of a multi-site Quality Management registration.

NESCO acquires V&H Leasing Services NESCO LLC, an equipment and service provider for the utility industry, has acquired V&H Leasing Services from material handling and truck equipment manufacturer V&H Inc. The acquisition will fold V&H’s rail equipment rental business into NESCO’s newest division, NESCO Specialty Rentals, which was launched in January 2016 to offer equipment in the rail, lighting, sign, telecom and other specialized industries. The acquisition will make the NESCO Specialty Rentals rail fleet the second-largest serving the rail industry. In addition, NESCO and V&H have entered into a new equipment supply and fleet services agreement. NESCO will gain the coverage of V&H’s service support and repair facilities, “ensuring customers that they will continue to get the service they have come to expect, while also expanding nationwide through NESCO’s large service footprint,” NESCO said. “V&H brings 50 years of rail industry upfitting and service experience to this supply agreement.” 12

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mtrak’s next President and Chief Executive Officer is an experienced and highly respected Class I freight railroader who brings more than 40 years in railroading to the position: Charles W. “Wick” Moorman, who recently retired as Executive Chairman of Norfolk Southern Corp. Railway Age’s 2011 Railroader of the Year took control of Amtrak’s throttle on Sept. 1, 2016, on a $1 per year salary plus an annual bonus of $500,000 tied to performance goals. Moorman succeeds current CEO Joe Boardman, who announced his intention to retire last fall. Moorman is only the second Amtrak chief executive with practical railroad experience since the legendary W. Graham Claytor, Jr., who ran Norfolk Southern predecessor Southern Railway from 1967 to 1977, retired from Amtrak in 1993 after 11 years. He was named Railroader of the Year in 1989. David Gunn, who began his career with the Santa Fe Railway in the 1960s, ran Amtrak from 2002 to 2005. “I view this as public service,” Moorman told Railway Age Editor-inChief William C. Vantuono. “Amtrak

is important to the freight rail carriers, and to the country. This is something I really want to do, and I believe I can contribute to making Amtrak a better railroad. I’m sure the work will be interesting, and I hope it will be fun as well.” Moorman added that he “is not doing this for the money” (performance-based bonuses are extended to other Amtrak employees) and that he “has not been unhappy in retirement.” Moorman comes to Amtrak after more than 40 years at NS and predecessor Southern Railway. He began his career on the Southern in 1970, as a co-op civil engineering student from Georgia Tech. In 1975, the Southern hired him as a management trainee in the engineering department. He started as a track supervisor and then rose from management trainee to Chairman, President and CEO of NS, which was formed in 1982 when the Southern merged with the Norfolk & Western. A graduate of Harvard Business School, Moorman serves on the boards of Duke Energy Corporation, Chevron Corporation, the Virginia chapter of the Nature Conservancy, and the Georgia Tech Foundation. “Wick Moorman is a proven railroader whose track record of success demonstrates his commitment and adherence to rail safety, efficiency and service to customers,” said Association of American Railroads President and CEO Ed Hamberger. “His contributions and leadership in the freight rail industry, I believe, will advance the working partnership the freight railroads have with Amtrak. The AAR and its freight rail members recognize the importance of Amtrak as a reliable U.S. passenger rail service and look forward to working with Wick in his new capacity.” Similar accolades came from Amtrak Board Chairman Anthony Coscia and Vice Chairman Jeffrey Moreland. “We are very pleased that someone with Wick’s experience and vision will lead

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Update We Make a Difference Wick Moorman (left) began his career on the Southern in 1970, as a co-op civil engineering student from Georgia Tech.

Photo courtesy of Norfolk Southern Railway Company

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September 2016

Amtrak during this critical period as the company charts a course for future growth and improvement,” said Coscia, who believes Moorman will improve Amtrak’s relationship with freight carriers. “He clearly understands both worlds, and he’s going to be in a position to try to get us all to a much better place.” “Wick’s deep operational background and track record of building teams and driving innovation is exactly what we need to provide unparalleled service to the more than 500 communities we serve,” said Moreland. “We are confident that, working together with the Board, Wick can formulate a strong plan to take Amtrak to the next level and assemble the management team and expertise to carry it forward.” In a letter to Amtrak employees, Coscia said, “Having worked at Norfolk Southern from the ground up, Wick Moorman and his team modernized the way that NS conducted business, served customers and worked with

communities. As CEO, he emphasized performance and teamwork across all aspects of the company, helping to drive a new culture of safety and service throughout NS’s system. “When he retired, Norfolk Southern was well-positioned to leverage opportunities and manage future challenges. Wick has the expertise and vision to build on the record levels of performance and investment that Amtrak achieved under Joe Boardman’s leadership. He is looking forward to meeting with employees and stakeholders to establish a strong agenda to grow and strengthen Amtrak and to work together with the Board to chart a course for our future.” Boardman, Railway Age’s 2014 Railroader of the Year, led Amtrak for eight years. He said that he “has been humbled to lead this extraordinary organization. . . . I look forward to spending time with my family and wish Wick all the best as he brings his excellent experience to Amtrak.”

Ultrasonic Rail Testing Begins With Knowing Who to Choose Alstom lands NEC trainset contract Amtrak has contracted with Alstom to supply 28 “next-generation high-speed” trainsets that will replace existing Acela Express equipment. The contract is part of $2.45 billion “that will be invested on the heavily traveled Northeast Corridor (NEC) as part of a multifaceted modernization program to renew and expand Acela Express service,” Amtrak said. Amtrak and Alstom also signed a long-term contract under which Alstom will provide technical support and spare components and parts. Combined, these contracts are worth $2 billion. The new trainsets will be based on Alstom’s TGV. The North American version, which like the Acela Express will be a tilting trainset with power cars at each end but unlike it will be articulated, is called the “Avelia Liberty.” It will have one-third more passenger seats, modern amenities that can be upgraded as customer preferences evolve such as improved Wi-Fi access, personal outlets, USB ports and adjustable reading lights at every seat, enhanced food service and “a smoother, more reliable ride.” Alstom describes the Avelia Liberty as the latest development in its high-speed trainset portfoilio. “Its configuration includes an innovative compact power car and nine passenger cars, with the possibility of three more being added if demand grows,” Alstom said. “The train is capable of travelling at speeds up to 186 mph), but will initially operate at a maxmum speed of 160 mph, based on

NEC track speed limits. Each power car is equipped with Alstom’s pioneering Crash Energy Management (CEM) system. Another key feature is the trainset’s articulated architecture, which provides greater stability and passenger comfort while enhancing safety. The Avelia Liberty also includes Alstom’s Tiltronix anticipative tilting technology, which allows it to negotiate curves safely and more comfortably at high speeds.” The trainsets will also meet current FRA safety guidelines. Amtrak is funding the trainsets and related NEC infrastructure improvements through an FRA RRIF loan that will be repaid “through growth in NEC revenues.” They will be manufactured at Alstom’s Hornell and Rochester, N.Y., facilities. Additionally, components will come from more than 350 suppliers in more than 30 U.S. states. U.S. content, which includes labor costs, is pegged at 95%. Amtrak will invest in improvements at Washington Union Station and Penn (Moynihan) Station New York, as well as in track capacity and ride quality improvements on the NEC that will benefit Amtrak and regional/commuter rail passengers. Amtrak will also modify fleet maintenance facilities to accommodate the new trainsets. A prototype Avelia Liberty is expected to be ready in 2019, with the first trainset entering revenue service in 2021. All of the trainsets are expected to be in service, and the current fleet retired, by the end of 2022.

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September 2016 Railway Age 15

Update

GWI moves to acquire P&W Add regional Providence & Worcester Railroad Co. (P&W) to Genesee & Wyoming Inc.’s growing stable of Class II and III carriers. GWI announced last month that it plans to acquire the P&W for $126 million at $25.00 per share. The acquisition is pending the approval of P&W shareholders of common and preferred stock and is set to conclude in fourth-quarter 2016. P&W’s board has approved the acquisition, following

completion of a process to assess strategic alternatives. The acquisition must also pass muster with the Surface Transportation Board (STB). GWI officials predict that P&W could bring in about $35 million in revenue and $12 million of earnings before interest, taxes, depreciation and amortization, including $8 million of operational cost savings and immediate overhead. The company

expects to fund the acquisition through its revolving credit facility, which had available capacity of $542 million as of June 30, 2016. Following anticipated STB approval, P&W would be managed as part of GWI’s Northeast Region, headed by Senior Vice President Dave Ebbrecht. GWI officials say the addition of P&W to its East Coast operations “strengthens GWI’s ability to serve Class I partners and customers in New England, a highly competitive rail market focused on quick, efficient and safe rail service.” The acquisition would provide GWI connections with the two Canadian Class I railroads (CN and Canadian Pacific), two U.S. Class I’s (CSX and Norfolk Southern) and two regionals (Pan Am Railways and NECR). P&W interchanges with CSX at Worcester, Mass., and New Haven, Conn; with Pan Am at Worcester; with Pan Am Southern LLC and NS

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September 2016

at Gardner, Mass.; with NECR and CP at Willimantic, Conn.; with the New York & Atlantic at Fresh Pond Junction, Queens, N.Y.; with Connecticut Southern at Hartford; with CN through trackage rights on NECR over the “Great Eastern Route” at East Alburg, Vt.; and with CP through trackage rights on NECR and Vermont Rail Systems over the Great Eastern Route at Whitehall, N.Y. P&W operates four classification yards in Worcester, Cumberland, R.I., and Plainfield and New Haven, Conn. The Worcester and Plainfield locations are also equipment maintenance facilities. Approximately 140 P&W employees operate the railroad with 32 locomotives along 163 miles of owned track and 350 miles of trackage rights agreements. P&W also has exclusive freight access on Amtrak’s Northeast Corridor between New Haven, Conn., and Providence, R.I., and trackage rights over Metro-North and Amtrak.

New INRD, Venture Logistics warehouse The Indiana Rail Road (INRD) and Venture Logistics on Aug. 24, 2016 officially opened the new Venture Rail Warehouse, decribed as “the first railserved mega-warehouse constructed in Marion County in decades.” The 406,000-square-foot facility, located on Indianapolis’ south side at 1102 W. Hanna Ave., “represents a new era in central Indiana logistics,” INRD said. INRD is the exclusive rail service provider for the facility, which features 15 indoor railcar spots, 58 truck dock doors, a 32-foot clear ceiling, 8-inch cement floors, and is food grade. Venture Rail Warehouse is one mile from Interstate 465, and with more than a dozen interstates and four-lane highways radiating from Indianapolis, more than 80% of the U.S. population is within a day’s truck drive of the facility. Venture Logistics’ fleet consists of 1,000 truck tractors and 2,500 trailers.

Venture Logistics and INRD officials said the new warehouse is “a gamechanger in the logistics landscape because the current rail-served warehouse inventory in central Indiana consists of smaller buildings with low ceilings. Our companies also will offer a variety of value-added services, including multiple rail switches per day based on volume, and state-of-the art warehouse management and inventory systems.” Adjacent land has been secured for a second rail-served warehouse that official said could exceed 500,000 square feet. “With our fast and efficient connections to the North American rail network, and Venture’s deep bench of trucking industry experience, the warehouse is garnering a lot of attention from companies interested in the combined efficiencies of long-haul rail and regional trucking,” said INRD President and CEO Peter Mills.

Logistics Challenges? Double Down on Experience. You have a deep investment in railcars, track, yard and rail terminals. So invest in a multi-faceted, award-winning logistics solutions leader to keep them operating safely and reliably — Road & Rail Services. From compliance inspection and repairs to capital projects and design-andbuild construction, we reduce costs, save time and add value to your operations. For results-oriented expertise, call the logistics leaders at Road & Rail Services today.

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September 2016 Railway Age 17

Update New York MTA previews new R211 subway cars

The New York Metropolitan Transportation Authority recently unveiled the design features of 1,025 “new and reimagined” subway cars— including enhancements to the exteriors and interiors of current cars, and addition of up to 750 “Open Car End” R211 cars that will reduce dwell

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September 2016

time and increase capacity. The MTA anticipates that out of 1,025 new cars, up to 750 will be R-211s, configured as 150 five-unit trainsets. They will feature an Open Car End design without gangways. The Open Car End design replaces the door and open gangway between cars with a

diaphragm that creates longer, open spaces, allowing for greater passenger flow movement and increasing capacity. These cars have become an international standard, MTA said. In London 31% of the Underground fleet will be Open Car End by the end of the year. In Paris, RATP’s figure will climb to 37%; and in Toronto, TTC’s will reach 56%, with addition of Bombardier Rocket cars. The door width of the new cars will be expanded from the current MTA standard of 50 inches to 58 inches. Wider subway doors can reduce delays by allowing customers to enter and exit more quickly, and have also become an international standard. According to a computer simulation of passenger flow conducted on behalf of the MTA, in crowded scenarios wider doors can reduce a train’s station dwell time by 32%.

CP urges expansion of locomotive video/voice recorders Canadian Pacific said last month that it in one place to discuss something we “welcomes the release of the full are passionate about at CP—safety,” proceedings from the Canadian said CP President and Chief Operating Transportation Safety Board’s (TSB) Officer Keith Creel (pictured). “LVVR recent Transportation Safety Summit was again discussed at length as an and urges government officials to take important, proactive means to improve action on LVVRs (locomotive video and safety, and I urge Canadian Transport voice recorders).” Minister Marc Garneau and his staff to CP said it “supports the need to heed the advice of experts and move implement LVVRs in Canada, which forward with this meaningful change.” can aide in incident investigation but In addition to attending the Safety have also been proven to proactively Summit, Creel met with Garneau in change in-cab behavior to prevent early June. Currently, on-board recordincidents in the first place.” ings are privileged and can only be used CP uses LVVR technology on 15 for post-occurrence investigations by locomotives in the U.S. CP noted that the TSB. Therefore, legislative change is “the technology is also being used by required in order for railways to be others in the U.S., with studies able to use this technology to prevent showing a 40% reduction in collisions accidents and increase safety, CP stated. per million miles traveled.” Creel believes the cameras—even “I attended the summit and was without audio—would ensure crews heartened to see so many thoughtful are following operating rules and not people from government and industry texting, AD - Railway Age 1/2 PG 2.qxp_Layout 1 7/22/16 11:51 sleeping AM Pageor 2 engaging in other

prohibited activities. “This is the number one safety improvement opportunity available,” Creel said. “After each human-caused derailment, I ask myself, ‘Would LVVR have prevented this?’ In the name of safety, it’s time to move forward on this.”

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September 2016 Railway Age 19

Update Go to jail, go directly to jail: North County Transit District California’s North County Transit District (NCTD) is significantly increasing enforcement activities against trespassers along both the Oceanside to San Diego and Oceanside to Escondido passenger rail corridors where Coaster, Sprinter and Amtrak Pacific Surfliner passenger trains and BNSF freight trains operate. Anyone caught crossing the tracks illegally or trespassing on the railroad right-of-way face will face criminal penalties imposed by NCTD’s Transit Enforcement Division Officers, or the San Diego County Sheriff’s Transit Enforcement Services Unit. The penalties for trespassing can result in fines up to $500 and/or six months in jail. “There’s an increasing problem we are seeing, and it needs to be stopped—now,” said Jaime Becerra, NCTD Chief of Transit Enforcement. “Every day, people are blatantly risking

their life as they illegally cross the tracks. What they don’t realize is that they are also risking the lives of hundreds of other people. “Each time a train comes to an emergency stop due to trespassers on or near the track, there is a risk of injury to the passengers and train crews who didn’t expect a sudden stop. A train doesn’t stop like a car, and it definitely can’t swerve like a car. In addition to the risk of injury, emergency stops require an inspection of the tracks after they occur. This federally mandated inspection delays passengers on that particular train, and can adversely affect the rest of the rail corridor. The inspection and delays can result in not just a cost of time, but an economic burden to passengers unable to get to work, and to taxpayers who pay for the inspection.” “With a trespasser on the rails, the

best-case scenario is that hundreds of passengers are inconveniently delayed due to an emergency stop. But far too often the results are tragic,” said Sean Loofbourrow, NCTD Chief of Safety. “There is no such thing as illegally crossing a railroad track safely. It’s always unsafe, and it’s always wrong to jeopardize the safety of others just for the convenience of crossing where you want to cross.” NCTD operates more than 400 Sprinter trains each week along the Oceanside-Escondido corridor and more than 130 Coaster trains each week along the Oceanside-San Diego corridor, with additional trains operated by Amtrak, Metrolink, and BNSF. The latter is part of the Los Angeles-San Diego-San Luis Obispo Rail Corridor (LOSSAN), the second-busiest intercity passenger rail corridor in the U.S., after the Northeast Corridor.

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Pershing Square Capital Management L.P. principal Bill Ackman has sold all his shares in Canadian Pacific, walking away with an estimated $1.5 billion. Ackman sold off his stake in CP—9,840,890 shares, about 6.7% of the company—on Aug. 3, 2016. He had once held as much as 14.4% of CP. According to many Wall Street analysts, Ackman needed the money. Said Antoine Gara of Forbes: “Between the collapse of Valeant Pharmaceuticals and completion of the regulatory investigation into Herbalife, the past 12 months have been the busiest and most challenging in Ackman’s career. Shares of Ackman’s public investment pool, Pershing Square Holdings, have plunged 46%, and the billionaire investor was hauled in front of the U.S. Senate to explain Valeant’s price-gouging ways. “One thing the controversial activist hasn’t done? Invest. Pershing Square Capital Management has made no new large public investments for roughly a year. On [Aug. 3], Ackman was once more doing something he’s become accustomed to: Selling. After dumping most of his position in animal health company Zoetis this spring, Pershing Square is now exiting CP after a five-year investment during which Ackman oversaw one of the great corporate turnarounds in recent memory. Ackman first invested in CP in 2011 with a plan to unseat management and bring in new leadership that could make the Calgary-based railroad more efficient. The play was a watershed for Ackman and hedge fund activists broadly.” CP’s new leadership was Hunter Harrison, who led a remarkable turnaround at CP, earning him Railway Age’s Railroader of the Year Award in 2015. CP’s stock price tripled over the course of four years. “Canadian Pacific has completed an incredible transformation since our initial investment in 2011,” Ackman said in a statement. He said he intends to continue to serve on CP’s board until the next annual meeting, and added that Pershing Square plans to use the proceeds of the sale to fund one or more new investments. Said Steve Hansen, a Vancouver-based analyst, “Ackman was selling because of troubles with some of his other investments, including Valeant Pharmaceuticals International Inc., the Canadian drug maker. At the same time, there’s this debate about what inning CP is in its evolution. The big heavy lifting has been done, and now we’re into more incremental gains as opposed to wholesale step changes. So, he’s probably looking to move on.” Ackman also attempted a merger with CSX, then went after Norfolk Southern. That attempt failed as well, with Ackman throwing in the towel on on April 11, 2016.

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September 2016 Railway Age 21 1/2 Page Vert.indd 1

8/12/16 2:12 PM

Watching Washington Frank n. wilner

STB dysfunction menaces revenue adequacy

f you think a theater of the absurd is limited to presidential candidates less popular than the Grinch who stole Christmas, you’re missing Surface Transportation Board (STB) dysfunction where Chairman Dan Elliott’s leadership is infuriating fellow Democrat Deb Miller and Republican member Ann Begeman. Begeman’s level of frustration with Elliott is manifest in her record number of progressively penetrating dissents, while Miller increasingly has withheld a necessary second vote until Elliott makes revisions to his draft decisions. The squabbling promotes regulatory delay. A five-year Elliott-led torment to produce a decision on forced competitive access by a second railroad at certain one-railroad served points resulted in Miller holding out for further stakeholder input and a better grasp of the long-term financial impact. Begeman still dissented, irritable the decision failed to identify which shippers will use the access, how and at what cost, and the impact on rail network fluidity. It will be 2017 or later—with voting by up to three new STB members—before a final decision. Elliott, whose second term extends through 2018, likely remains chairman in a Clinton administration. Donald Trump will name a Republican chairman—not necessarily Begeman, politically attached to Sen. John McCain, and who will be gone if not renominated and Senate-confirmed before Dec. 31. Miller’s term extends through 2017. The 2015 Surface Transportation Board Reauthorization Act added two new members—creating a fivemember STB—but President Obama failed to make timely nominations,

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September 2016

likely leaving the choices, including a possible successor to Begeman, for the next President. A new majority may demand a more in-depth analysis of the access issue. In weighing conflicting predicted outcomes by shippers and railroads, little attention was given by the Elliott-directed staff to the effect of such access where it already exists. In addition to Canada, where such access is in place, a version exists at

No issue is so crucial to railroads, shippers and the economy as revenue adequacy. Conrail, the switching and terminal railroad in Northern New Jersey, Southern New Jersey/Philadelphia and Detroit. It offers shippers a line-haul choice of CSX or Norfolk Southern, creating price and service competition. Another shared facility is the BNSF-Union Pacific jointly owned line in the Southern Powder River Basin. The STB also is unsettled in resolving shipper allegations that they are “rate gouged” when lacking effective transportation alternatives to rail. Currently to gain redress, shippers must pursue a Stand Alone Cost (SAC) test requiring they construct, operate and maintain a hypothetical railroad built from scratch. “The complexity and cost [typically at least $5 million] of the SAC test is

astounding,” Miller says. Begeman wrote, “While I had been skeptical about the SAC test prior to my service at the Board, my concerns have only grown as I have seen the SAC process in action.” Shippers call it “the most complicated rate standard in the history of regulation.” They shun as unusable two allegedly more simple alternatives. An STB-commissioned consultant study of the SAC test is under way. Additionally awaiting STB action is whether and how to implement a rate cap on revenue-adequate railroads; and revisions to—and simplification of—the formula for calculating revenue adequacy. Railroads say the measurement is intended solely as a guide and not meant to summon new pricing restrictions. Inspiring Congress to partially deregulate railroads in 1980 and provide for safe-harbor pricing was regulatory sluggishness in assisting railroads to achieve revenue adequacy. No issue is so crucial to railroads, shippers and the economy as revenue adequacy—a high-wire act without a net that Congress consistently has identified as regulation’s North Star. In an economy with the beer turned flat and the fizz off rail earnings, flubbing the dub on what revenue adequacy is and means—and how it is affected by other regulatory decisions—will determine for another generation the level of investment available to renew and expand America’s rail network. Much rides on pending STB nominations. Frank N.Wilner served as aWhite Houseappointed chief of staff at the STB for former Commissioner Gus Owen.

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leasing company peer was lamenting the state of the railcar marketplace, the downward and steady pressure on railcar lease rates and the dim prospects for a 2017 rebound. The discussion turned to the topic of the seeming disconnect between the rail economy, which has been declining, and the overall economy, which continues to move forward albeit at a slower than optimal pace. Why might a seasoned leasing veteran be concerned at this anomaly? Here’s why: Railcar loadings have always been a forward economic indicator; however, railcar loadings and rail tons have been on a decline since 2014. During that same timeframe, the U.S. economy has been growing, and unemployment has been decreasing (putting aside the discussion about members of the work force that have dropped out). In general, the U.S. economy seems stable, but there is limited growth, and current growth trends heavily depend on consumer spending (2015 was a record year for auto sales) to make up for weakness in business investment. Here are a few quick economic stats and the changes in the past 12-24 months: • Unemployment of 6.6% in January 2014 down to 4.9% in July 2016. • GDP growth running at an annual average growth rate of 2.1% since the end of the recession—the slowest expansion pace since 1949. • Industrial production over the past 12 months remains slightly lower at a decrease of 0.5%. Manufacturing output has increased by 0.2%. Economic watchers suggest that manufacturing will improve in the second half of 2016. Railcar loadings drive railcar demand, which in turn drives lease rates. If loadings are a harbinger, loadings suggest the economy is contracting instead of expanding. The decrease in railcar loadings generally across all segments (but

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September 2016

especially in coal and energy) has led to dramatic improvements in rail system velocity. As a result, railcar demand has softened and lease rates on railcars of all types have dropped (in some cases, such as coal and small cube covered hoppers for sand) to extremely low levels. New car orders have decreased to the point where the existing backlog is running off at a rapid pace and prices are coming down. We hear on the street that railcar manufacturers are dropping prices to try to make any demand for any railcar a new car order.

Carloadings are a harbinger of the economy. Current levels suggest the economy is contracting. To understand the discrepancy between the rail marketplace and the U.S. economy, I consulted with Eric Starks, President of FTR Associates and an annual Rail Equipment Finance Conference participant, for an explanation. Here’s what he told me: The disconnect is less tied to economic issues that grab headlines like the strong U.S. dollar (already priced in and supporting U.S. intermodal loadings) than to weakness in the overall global economy (impacting commodity prices) and near zero or negative real interest rates (low returns on retirement capital inhibit consumer spending). What really grabs Starks’ attention is the downturn in energy-related rail business and continued weakness in manufacturing. The dropoff in coal loadings

(roughly 20% from 2011) and other energy products has been significant. If energy were at historical norms, the rail economy would seem “almost normal.” Instead, we have an imbalanced market where high inventories of consumables hinder manufacturing and business investment. Lacking confidence in the direction of the economy, Starks notes, businesses are holding cash on the sidelines waiting to confirm a return on future investments. So what will change loadings growth on the rails and what will this mean for the U.S. economy? Starks again returns to manufacturing and innovation, which should pick up if the consumer eats into those high inventories. Signs indicate potential additional manufacturing growth, but on the consumer side, something (such as housing starts) needs to replace autos in leading the pack. A possible increase in agricultural product moves (due to a bumper harvest) has the chance to begin to lift rail loadings off current lows. Growth in rail loadings will be an indicator of growth and strength vs. the teetering in today’s market, where we worry today might just slip into recession. I finished by asking Starks, if the Federal Reserve moves to raise rates, will that slow growth and potentially the rail economy? Answer: It’s a doubleedged sword. Better returns on bankheld cash might free up additional consumer purchasing power, but could slow growth as investment costs increase. The Fed should have tried to move rates to something more normal some time ago. My advice? Buy two of everything to get the railcars moving again and eat into those inventories. Except autos—buy three of those. And by all means turn up that air conditioning! Have questions? Set them free at dnahass@railfin.com.

FOCUS:

ike most Class I railroads, Union Pacific has had to make adjustments to deal with sharp declines in coal and other commodities. While its $3.75 billion 2016 capital program is lower than last year’s, it upholds a strong commitment to maintaining a state of good repair, building capacity and improving technology. As well, UP is committed to sustainability. And then there’s yet another historic UP steam locomotive undergoing restoration. At Railway Age’s 2016 Rail Insights conference, UP Chief Financial Officer Rob Knight sat down with Editor-in-Chief William C. Vantuono to discuss UP’s current state of affairs, and what may be in store in the short- to medium-term: • Coal, one of UP’s primary sources of volume and revenues, has been in decline, for more than one reason, not the least of which is the low price of natural gas that has prompted some electric utilities to convert from coal. “There

26 Railway Age September 2016

still is life in our coal franchise,” Knight said, indirectly dismissing those Wall Street analysts who have—shortsightedly in this writer’s opinion—tied UP’s future to coal. • PTC accounts for a significant chunk of UP’s capital budget. “We have been aggressively pursuing completion, with eyes on that 2018 completion date,” Knight said. “It’s all very complex, and expensive. When finished, we will have spent $2.9 billion on capital up front, and we’ve already spent about $2 billion, which shows you how far along we are with it all. But it has been costly, and we’ll need to recover our investments somehow.” • Though at the time of the conference UP had 1,800 locomotives in storage, Knight noted that the railroad plans to acquire 230 new locomotives this year, 70 in 2017, from EMD and GE Transportation. “What will drive orders after that will be how our business and the broader economy is

All photos courtesy of Union Pacific

FUTURE

How innovative engineering, safety and environmental programs are driving change at By WILLIAM C. VANTUONO, Editor-in-Chief Union Pacific

doing,” he said. • Of UP’s $3.75 billion capex budget, about $2 billion is allocated for replacement projects. “Our large projects (double-tracking the Sunset Route, for example) are mostly complete,” Knight said. He added that rumors of a track speed reduction on UP’s triple-track principal trunk line through Nebraska (North Platte to Omaha) are untrue. • An improved service product and concentrated market research “have opened doors to new business opportunities,” Knight said. • UP has a diverse franchise, is doing everything it can within its control to manage that franchise, and is well-positioned for growth, Knight stressed: “Industrial products are a lynchpin of our franchise. We’ve been experiencing domestic intermodal growth from taking trucks off the highways. Our petrochemical franchise has been a big growth engine. And

we have reach into Mexico over all six border interchanges.” UP holds a 26% stake in Ferromex, a relationship that began with privatization of Mexico’s national railway in the 1990s. Long Rail Strategy

Union Pacific’s Long Rail program, more than a decade in the making, ranks among the industry’s most significant engineering innovations. UP is the first railroad to import highstrength, head-hardened continuous-cast rail from Japan, in 480-foot-long sections. Only two welds are needed to create quarter-mile strings, instead of 17 welds connecting 80-foot sections—an 88% reduction in the number of welds required. Nippon Steel and Sumitomo Metal Corp. supply the rail, which is delivered to the Port of Stockton, Calif., by ship, and then transported in specially designed shuttle railcars to UP’s $18 million Stockton rail welding plant. September 2016 Railway Age 27

CLASS I Focus: union pacific

The facility is equipped with a custom overhead crane to lift the rail out of the cars. Holland LP is providing rail welding services for this program. Sumitomo designed and built Pacific Spike, the first ship of its kind, to serve as UP’s long rail carrier. The vessel is outfitted with three cranes synchronized to simultaneously unload five 10-ton rail sections. Rail is stacked three bundles high onto the shuttle cars to be moved from the dock to storage. Sustainability: Bridging Great Salt Lake

Utah’s Great Salt Lake, the largest saltwater lake in the Western Hemisphere, is one of the world’s most unique, and fragile, ecosystems. It’s also home to UP’s Lucin Cutoff, a 20-mile-long rock-fill causeway built originally by the Southern Pacific. Without the causeway, rail traffic would be diverted to UP’s Shafter Subdivision south of the lake, requiring additional train starts. The causeway contained two culverts, both large enough for water and small boats to pass through, that were critical to maintaining the Great Salt Lake’s delicate balance of salt and fresh water. That balance impacts, among other things, the lake’s brine shrimp population, one of Utah’s major exports (details, p. 2). The structure had been sinking for quite some time. Diving inspectors discovered cracks in both culverts’ sidewalls directly under the tracks in 2011. The west culvert was

in danger of collapse. Both were closed by 2013. UP turned to a U.S. Geological Survey computer model of the lake’s bi-directional water and salt flow to design a new causeway bridge to replace the culverts. The model allowed UP to determine a bridge width and depth that would duplicate the water and salt transfer once provided by the culverts. The U.S. Army Corps of Engineers and the Utah Division of Water Quality approved the design in 2014. The bridge is a 180-foot-long structure supported by 49 pilings, with adjustable earthen control berms that can be built up or removed. Described as “an innovative and elegant solution,” the berms can be modified if, for example, the ecosystem is determined to be declining. Construction of the bridge and berms is expected to be completed by the end of the month. UP will monitor salinity changes in the lake until 2021. Improving High and Wide

The Railway Industrial Clearance Association (RICA) recently named UP Railroad of the Year by. RICA consists of railroads, shippers and manufacturers, and logistics providers that plan and execute special movements of loads requiring extra height and width clearances. RICA recognition is based on peer votes in such areas as technological advances and customer service. UP received RICA’s award largely due to creation and

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modeling, creating loaded railcar geometry and rail network information to check for obstructions, select viable routes and produce meet-pass location mapping. The software, initially implemented by UP, is now available commercially. Machine Vision

Machine Vision has been implemented at three UP yards.

implementation of iClear software developed by Union Pacific Corp. wholly owned subsidiary PS Technology. iClear allows users to quickly validate railroad routes for oversized loads, without waiting for manual clearance checks, saving time and improving service. iClear uses automatic 3D

UP, with the help of its R&D lab at its Omaha headquarters, is deploying its version of the state-of-the art rolling stock inspection system known as Machine Vision. UP’s Machine Vision consists of an array or “portal” containing a combination of fault detection sensors, cameras, lasers and strobes. As a train passes through a Machine Vision portal, the equipment generates a three-dimensional model of every railcar that can be viewed remotely from any UP computer. So far, the system is able to identify and measure 22 railcar components and flag defects that could lead to a delay or, in a worse-case scenario, a derailment. Inspections are conducted 24/7, in any type of weather. Machine Vision inspections relay information on needed repairs before a train arrives in a classification yard. The technology helps improve yard throughput, reducing dwell time as well as the potential for misrouted cars or missed connections. So far, Machine Vision arrays have been deployed outside three UP yards in Nebraska, Iowa and Arkansas. Various types of data come from wheel detectors, lasers,

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infrared cameras and line-scan cameras that photograph one continuous line of pixels at a time—50,000 photos every second—that are then assembled to form a continous image of the train. Algorithms developed by UP’s Omaha R&D lab analyze the data gathered by the Machine Vision portal as a train passes through the structure at speeds up to 70 mph, displaying high-resolution images of the train in near real-time. There’s also LiDAR (Light Detection and Ranging), a surveying technology used for geomapping. Machine Vision uses LiDAR to generate three-dimensional images of an entire train. Algorithms look for defects using photography and LiDAR. For example, the system can verify that there is an appropriate and balanced amount of spring compression on a three-piece truck.Too much compression on one side throws off the car’s balance, which can cause a derailment. Big Boy Requiem

One of the largest and most famous steam locomotives ever built—UPs articulated 4-8-8-4 “Big Boy” No. 4014—is undergoing restoration to operating condition (including conversion from coal to oil) by UP’s Cheyenne, Wyo.-based Heritage Fleet Operations.4014 will join UP’s other iconic steam locomotives—4-6-6-4 Challenger 3985 and 4-8-4 Northern 844—in excursion service when restoration is

Big Boy 4014’s massive smokebox undergoing inspection.

completed, and become the world’s largest operational steam locomotive. Alco built 25 Big Boys for UP between 1941 and 1944. UP took delivery of 4014 in December 1941. She was retired in December 1961, having traveled more than one million miles in 20 years of service. RA

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Signs of renewed life For what is described as “a highly lumpy industry,” there are strong indications that the freight car market will settle down to a state of more-predictable consistency.

William C. Vantuono

By WILLIAM C. VANTUONO, Editor-in-Chief, with Contributing Editor BRUCE KELLY

btaining an accurate read on the current freight car market is like trying to fine-tune a multiple-carburetor setup on a classic performance car. Adjust one setting, and another setting may be thrown off. “Railcar orders are likely to remain well below 2015 and 2014 levels for the foreseeable future, but our recent [research] suggests that third-quarter inquiry and order activity may be fairly solid, given the challenging environment,” says Cowen and Company Analyst Matthew Elkott. “This could be largely attributable to three factors: grain cars; aggregate hoppers and gondolas, and potential opportunistic buying. On the grain front, the trifecta effect of high storage levels, strong North American crops and poor South American crop conditions could boost demand for grain shipment on rail and spur export activity from the U.S. and Canada. Demand for aggregate hoppers and gondolas should continue to stem from the construction sector and expected infrastructure projects

associated with the [surface transportation] bill passed in December 2015, especially as a new Administration will likely strive to accelerate economic growth. Finally, as we are nearly two years into an industry down cycle, some financial investors and lessors may be close to calling bottom for equipment pricing, which could lead to some opportunistic buying of railcar assets.” “Somewhat Better Than Expected”

The Railway Supply Institute American Railway Car Institute (ARCI) second-quarter 2016 freight car order, delivery and backlog statistics are “somewhat better than expected,” according to KeyBanc Capital Markets analyst Steve Barger. Orders in the quarter increased sequentially to 7,555 cars from 6,646 in first-quarter 2016. Carbuilders delivered 15,655 railcars in the quarter, following first-quarter 2016’s delivery figure of 16,834. The backlog stood at 89,155 units, September 2016 Railway Age 35

THE freight car MARKET

down 6.2% from the prior quarter’s 95,038, though still at historical highs. Industry book-to-bill came in at 0.5x, slightly better than the first quarter’s figure of 0.4x. In the quarter, respective book-to-bill for tank car and non-tank car activity was 0.7x and 0.4x, respectively, vs. 0.2x and 0.5x, respectively, in first-quarter 2016. “We think the sequentially stronger book-to-bill for tank cars reflects a reversion to a replacement market with modest growth in some non-O&G car types,” Barger said. Non-tank car orders totaled 4,363 units in the quarter vs. 5,729 n first-quarter 2016. Covered hoppers, which showed the largest concentration in orders, totaled 2,017 railcars, or about 27% of the total, below the prior quarter’s 51%, with medium-cube covered hoppers representing the majority of the orders at 1,286 cars, vs. 2,020 cars ordered in the first quarter. Orders for large-cube and small-cube covered hoppers were 708 and 23 cars, respectively, vs. 1,335 and 0, respectively in the first quarter. Orders for tank cars totaled 3,192 vs. 917 in the first quarter. Together, tank cars and covered hoppers accounted for more than 69% of total orders in the quarter vs. 64% in the prior quarter. Second-quarter 2016’s deliveries of 15,655 break down into 4,318 tank cars and 11,337 non-tank cars. Though secondquarter 2016 tank car deliveries fell 27% sequentially, “we think current tank deliveries imply that the industry enjoys

roughly 16 months of tank backlog visibility,” Barger noted. “On current deliveries, we think the backlog implies just under six quarters of theoretical production visibility. The tank car backlog decreased about 4% sequentially to 24,424 cars, while the non-tank car backlog moderated to 64,731, down from last quarter’s 69,488. We think the industry backlog continues to trend toward a more ‘normal’ distribution, with 27% tank cars, 20% small-cube covered hoppers, 18% medium-cube covered hoppers and 13% large-cube covered hoppers.” “Additionally, we think the industry benefited from a net increase in a small-cube covered hopper backlog totaling 2,618 railcars,” Barger said. “We suspect this could be the result of negotiations with customers, whereby some cars are coming out of cancellation. The industry saw 5,793 cancellations in first-quarter 2016, 4,847 of which were for small-cube covered hoppers. Given that the industry numbers are likely somewhat better than expected, we think this order activity and backlog support our view that low-end 2017 consensus estimates for railcar OEMs Greenbrier and Trinity are likely too conservative.” Energy By Rail Revival?

Can exports revive crude-by-rail and coal? Railway Age Contributing Editor Bruce Kelly offers the following analysis: During a moment when much of the world was fixated

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THE freight car MARKET

on Presidential politics, two business stories of considerable importance to energy, transportation and the economy went largely unnoticed. U.S. crude sourced primarily in the Gulf States has been shipping overseas since January, moving from storage tanks to seaport primarily via pipeline. These exports took advantage of a nearly $2.00 discount on West Texas Intermediate crude vs. European Brent crude. Meanwhile, the April start-up of oil exports from the Bakken shale formation signals a potential resurgence for CBR, assuming market behavior continues its slow trek back into favorable territory. Rail still represents a viable means, and in some cases the only means, for transporting Bakken and other central-U.S. or Canadian crude to refineries and ship terminals on the East, West and Gulf coasts. The business is there, but it must be won. CBR for domestic consumption is currently down by roughly one-third from its late-2014 peak, but there’s potential for CBR to regain lost ground, now that the whole world has become a marketplace for U.S. crude. Among the factors for railroads to consider: how and where can CBR tap into an oil export market most effectively, and with line capacity more available now due to declines in other traffic, how to price for export crude movements competitively yet profitably. Within the North American market, U.S. imports of crude and petroleum products from Mexico have dwindled, from 1.6

million barrels in 2006 to virtually zero in 2016, according to the U.S. Energy Information Administration. However, U.S. exports to Mexico have risen steadily during the same period, reaching more than 27 million barrels in March. In addition to the current export of U.S. crude to Canadian refineries, there is opportunity for U.S. crude to move through Canadian ports to reach Asia. Efforts to build new coal and crude export terminals in Washington and Oregon face environmental opposition, which is why low-sulfur Powder River Basin coal has been rolling toward the export dock at Roberts Bank, B.C., at a rate of roughly two trains per day. A proposed export coal terminal at Surrey Docks, B.C., was granted approval by Port Metro Vancouver in November 2015. The project’s amended plan calls for direct transload from unit trains into ocean-going ships. If built, Surrey Docks would eventually have capacity to unload approximately one trainload of PRB coal per day, according to BNSF. Construction is being held up by new legal challenges, as well as the need for permitting on air quality and wastewater discharge. Even if capacity increases for exporting PRB coal to Asia, the reliability of that market—China in particular—remains in question. Reports on China’s coal consumption continue to paint conflicting pictures, some saying that China’s coal imports have increased and new coal-fired power plants continue to be built, while others say China is easing away

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THE freight car MARKET

from coal and placing emphasis on gasfired plants, solar and wind. An increase in China’s demand for crude has been observed, which could translate to export rail traffic. Canada’s export of CBR into the U.S. continues, though volume is down, from 176,000 barrels per day during December 2014 to less than 90,000 bpd in August 2015. That figure rebounded slightly to 107,000 bpd in December 2015. Failure to start the Energy East and Keystone XL pipelines has preserved the need for railroads to transport a share of Canada’s crude southward, even in these times of depressed prices. The EIA explained that production facilities in Canada’s oil sands, even if operating currently at a loss, “are designed to operate over a period of 30 to 40 years and can withstand volatility in crude oil prices.” The cost of shutting down an oil sands facility, according to the EIA, “is estimated to be in the range of $500 million to $1 billion, which may exceed the operating losses a producer might experience in the short term.” If the numbers add up favorably for moving crude and coal by rail to export, there will still be an uphill battle against opponents of such fuels, even though many recognize their current value to the economy. A survey of 1,200 residents in the Pacific Northwest conducted in 2014 found that a slight majority supported CBR. However, less than half of the participants said they had actually paid much attention to CBR. Natural gas, which has been touted as the cheaper and cleaner alternative to coal, is being targeted by some environmental groups. Sierra Club Climate Policy Director John Coequyt told Railway Age, “The world is moving away from fossil fuels, and that’s necessarily going to include the rail industry, which needs to look now toward electrification and other zero-carbon modes.” For the near term, railroads are perfectly poised to accommodate growth in energy exports. Long-term, the idea that railroads could someday lose that business and be forced to electrify might sound improbable, until you consider the fact that a federal mandate

has already forced rail companies to invest billions of dollars toward another perceived necessity: PTC. BNSF Vice President Corporate Relations Zak Andersen submits a view probably shared by many in the rail industry: “Opposition to certain commodities has always existed, but the permitting process has been twisted into a tool to Railway Age-halfpgISL_Layout 1 8/23/16

stop projects where the commodity is disliked. There is always someone who will not like a certain commodity. At some point, it impedes the ability of the railroad to grow, and by extension, commerce. In a trade-dependent state, trying to decide what will and won’t move, independent of market forces, just won’t work in the long run.” RA 10:51 AM Page 1

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New Designs for Special Trackwork Research at the Facility for Accelerated Service Testing is resulting in improved reliability and efficiency.

By David D. Davis, Senior Scientist; and Rafael Jimenez, Senior Engineer, TTCI, for Railway Age

n addition to improving safety, railroads are striving to improve reliability and efficiency in special trackwork. The AAR SRI (Strategic Research Initiatives) program has developed several new concepts and prototypes for special trackwork. TTCI is evaluating these designs under heavy-axle-load operations, first at the Facility for Accelerated Service Testing (FAST) in Pueblo, Colo., and then in revenue service. Among the designs evaluated, the following provide performance benefits: • Under-tie pads for turnouts and crossing diamond foundations. • An initial groove in flange-bearing running surfaces. • Superelevation for increasing allowable speeds on the diverging route of main line turnouts. • Continuous main line rail turnouts for low speed, lowdiverging-volume locations. These designs may also provide economic benefits for freight and passenger applications. The extent of any such benefits are dependent on the particular operation being considered. Under-tie pads have been evaluated in a Number 20 turnout at FAST, which has an AREMA alignment and

timber crossties. After 300 MGT of HAL traffic, the turnout has about one-third less average settlement and far less differential settlement than a similar turnout without under-tie pads. The pads increase the contact area with the ballast. It is expected this will also reduce ballast breakdown. Changing the transverse profile for flange-bearing frogs from flat to having a conformal groove has reduced initial deformation in FAST and revenue service tests. The groove is machined to match the design profile of a new wheel flange. In tests on a western railroad, the initial wear rates are reduced by 40%. The grooves also help keep vehicles centered on the track; reducing gage face wear on the rails. The photo on page 44 shows a crossing diamond ramp with a conformal running surface groove. Adding superelevation to turnouts can allow higher diverging speeds for any turnout length. It may also allow use of lower-entry-angle switches without a diverging speed penalty. Superelevation can be accomplished by altering the plate work of the diverging side. For typical turnouts with switchpoint risers, 1/4 inch of crosslevel is already present September 2016 Railway Age 43

TTCI R&D: special trackwork

at the switch heel. This can be continued and increased in the closure curve of the turnout. If timber ties are used, the elevation will counteract the tendency for the frog to become a low point in the turnout. A prototype Number 20 turnout with 1/2 inch of superelevation has performed well at FAST for 200 MGT. The turnout shows no unusual wear from the addition of superelevation. Continuous main line rail turnouts are being implemented in revenue service. This design is appropriate for low-volume, low-speed diverging traffic locations such as set-out tracks. The photo on page 43 shows a continuous main line rail turnout in western revenue service. The main line rails are continuous throughout the turnout, with no change in running surface profile. Both switch points are on the diverging route, with both stock rails on the main line route. In addition, the frog is a “lift” frog with no flangeway gap on the main line route. This provides excellent ride quality and a very long life for the switch components. RA References Davis, D., Shu, X., Jimenez, R., & Rael, B. (2014, November). “Evaluation of a Foundation Design for Turnouts Under Heavy Axle Load Traffic.”Technology Digest,TD14-022,Transportation Technology Center, Inc., Pueblo, Colo. 1_2pgHorzWrkStTraining2016.qxp_Layout 1 8/17/16 3:25 PM Page 1

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TRANSIT PORTLAND: RAIL WORKERS’ EDITION

All photos: TriMet

n 2000, Railway Age presented its Railroader of the Year Award to The Railroad Worker: “the rank-and-file employee [who] has been the dependable backbone of an efficient, profitable rail transportation network” as we entered this new century. As Portland, Ore.’s MAX light rail system enters its 30th year, it’s an opportunity to hear its workers describe their city’s transit development. Here, six workers who have been with Portland’s TriMet transit agency since the city’s first LRT line opened Sept. 5, 1986, describe their experiences. “People thought we were literally creating a white elephant,” laughs John Whipple of the white Bombardier Type 1 light rail vehicles (LRVs) that began traversing 15 miles of track on the city’s east side on opening day. Kevin Powell was with Bombardier, working on Type 1 LRV manufacturing, when TriMet hired him three months before the MAX line’s opening. “TriMet realized light rail knowledge didn’t exist on its staff,” he recalls. “It was all

By BEN VIENT, Managing Editor

buses up until that point. If the plan was to grow light rail, then they’d better hire technicians who understood LRVs.” The 30-station east side MAX Blue Line, kick-started by the Federal Transit Administration’s 83% funding of the $214 million project, led to considerations of whether the city’s west side could also be connected by LRT. Standing in the way were the West Hills, and a tunneling process. Whipple worked in the three-mile, twin-tube tunnel for three years, where “engineers thought it’d be harder rock, but had to adapt the boring process as the rock was rather soft. This was a big engineering accomplishment for us.” Another big accomplishment: hiring strides as the west side Blue Line prepared to open, remembers Delina Adams. She began with TriMet as a high school student in a temporary administrative job in 1982. In preparation of the 1998 west side opening, she worked with personnel “to hire and transfer more workers to light rail. More workers saw this light rail development as a way to advance their careers in September 2016 Railway Age 47

TRANSIT FOCUS: PORTLAND

Delina Adams started with TriMet as a high school student in 1982. Today, she is a maintenance helper.

Kai Houlander transitioned to TriMet’s capital projects division in 2000 after 14 years in the maintenance department.

this new transit sector.” Portland’s 18-mile west side MAX Blue Line opened Sept. 12, 1998, adding an additional 32 stations to the city’s LRT system. Construction began in July 1993, and brought the newly enacted Americans with Disabilities Act of 1990 into consideration. “We had lifts at some stations for people in wheelchairs or with handicaps,” remembers Dennis Van Dyke, a TriMet bus driver who was recruited as an LRV

operator. “But this new law and our developments allowed us to think of a new type of LRV.” The result was the first low-floor LRV in North America, the Type 2 SD660, manufactured by Siemens. It was of a 70% low-floor design. Kai Houlander worked his way up through TriMet’s light rail maintenance department in the 1990s, and transitioned to the capital projects division in 2000. The city was preparing a unique approach to the 5.5-mile MAX Red Line to

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September 2016

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TRANSIT FOCUS: PORTLAND

Kevin Powell (in 1986 and today), brought LRV expertise to TriMet from carbuilder Bombardier when MAX opened.

Portland International Airport: a public-private partnership. No federal dollars nor new taxes were needed for this $125 million project, funded 36% by TriMet’s general fund, 23% by the private developer Bechtel/Cascade Station Company, 23% by the Port of Portland, and 18% by the City of Portland. “We had more players, with more interests to coordinate,” remembers Houlander, who served as field inspector for this capital project.

But of everything to coordinate, no one could have imagined the events that would affect the development’s opening: The airport Red Line opened Sept. 10, 2001, one day before all flights were grounded after the 9/11 attacks. “That, and the recession we faced afterwards, delayed the public development growth we expected with our light rail line,” Houlander says. Van Dyke remembers the excitement building up as the West Coast’s first airport rail transit line opened, “but 9/11 changed our thinking: Now it was a security issue. We were able to use these trains to bring the stranded passengers back from the airport to the city, and I could see that the new security concerns were on everyone’s minds.” When the airport re-opened in the next week, “we had the new Red Line to bring the influx of passengers,” says Van Dyke, “and we really got to prove our worth to the city.” Bryan Gillespie also transitioned from a city bus driver to LRV operator, and by the time of the MAX Yellow Line opening in 2004, was a scheduler for TriMet. “I was the first schedule writer with rail experience,” Gillespie says. “It can be sometimes challenging to convey the subtle differences of a closed rail system to transit people who know buses firsthand. If a problem occurs, an LRV can’t seek an alternate route or pull off to the side. I think we’ve all been learning from each other as development of light

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Railway Age

September 2016

TRANSIT: PORTLAND

The 5.8-mile, 10 station, $350 million MAX Yellow Line opened May 1, 2004 connecting North Portland. The MAX Green Line followed, adding 20 stations along 8.3 miles into Southeast Portland, opening Sept. 12, 2009 at a cost of $575.7 million. “While adding all these miles, adding all these trains, we really saw technology advance in front of our eyes,” says Kevin Powell. “The train is becoming more like a computer. Now, so much is written on microchips, so many of us rail technicians don’t understand the codes inside those microchips. It’s a downside to the technology we see advancing: rail systems become beholden to the manufacturers and their fees, whereas in the past, the rail electronics technician could fix most issues. I’m really here to maintain electronics on older vehicles now.” The 7.3-mile MAX Orange Line opened Sept. 12, 2015, and it’s at one of these 10 new stations where Delina Adams works: “As a member of the Amalgamated Transit Union Local 757, I was able to bid on jobs in the past 30 years, and decided I wanted to be outside to see all this light rail development and its riders,” she says. She is now a maintenance helper, focused on station cleanliness, “an important factor to attract more people to ride our system,” she says. TriMet estimates close to 130,000 people now ride the

Thirty-year TriMet employee and West Hills tunnel worker John Whipple in 1986 (left) and today.

five MAX lines’ current 60 miles of track serving 97 stations each weekday. “From that first day in 1986,” Dennis Van Dyke says, “when I saw people lining up to ride the new LRVs, it was an indication that I had made the right decision switching from buses to light rail.” RA With special thanks to Mary Fetsch, Nate Allison and Theresa Tyree at TriMet.

Rail Systems & Vehicle Engineering

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To place a job posting, contact: Jeanine Acquart 212 620-7211 • jacquart@sbpub.com

www.ltk.com September 2016 Railway Age 51

People

Meetings

High profile Edward Fishman has joined the Infrastructure Practice Group of Nossaman LLP as a Partner. Fishman, based in the firm’s Washington, D.C. office, provides project structuring, risk management and regulatory advice in connection with rail, highway and related intermodal projects and has worked on several P3s. He has substantial experience representing multinational clients in connection with the FCPA (Foreign Corrupt Practices Act), trade sanctions and other U.S. laws that apply to business activities outside the U.S. Fishman Fishman Nossaman LLP is admitted to practice in the District of Columbia and Maryland, and holds a J.D. from George Washington University Law School, an M.A. from George Washington University Elliot School of International Affairs and a B.A., cum laude, from Duke University.

Sept. 15-16, 2016

The Railway Supply Institute Committee on Tank Cars (RSICTC) named veteran railcar design and regulatory compliance and safety professional John Byrne as Vice Chairman. Byrne succeeds William Finn, who retired earlier in 2016. WSP | Parsons Brinckerhoff appointed Ryan Davis as a contracts manager, Los Angeles. Jorge A. Chaves Dominguez named President and Asdrubal Montenegro named CFO, Latin America region. HNTB hired Positive Train Control specialist Aaron Marx for the firm’s U.S. public- and private-sector clients. The Conference of Minority Transportation Officials (COMTO) named WSP | Parsons Brinckerhoff AVP Community Relations and Diversity-Manager, Central U.S. Region Tanya Adams as 2016 Corporate Executive of the Year. Union Pacific announced a succession in its Marketing & Sales department leadership: John Kaiser named Vice President Strategic Planning; Jason Hess named VP and General Manager Intermodal, succeeding Kaiser; Brad Thrasher named VP and GM Agriculture Products, succeeding Hess; and Kenny Rocker named VP and GM Industrial Products, succeeding Thrasher. Orgo-Thermit, Inc. named Christopher Booth as Vice President and COO of the GT-Group, Manchester Twp., N.J. 52

Railway Age

September 2016

OBITUARY Robert R. Kiley, the New York Metropolitan Transportation Authority’s (MTA) fifth and longest-serving chairman, died August 9th at the age of 80. His family cited complications of Alzheimer’s disease. Kiley was appointed chairman of the MTA by then-New York Gov. Mario M. Cuomo in 1983 and served until January 1991. The MTA said Kiley “was a principle catalyst of the system’s remarkable transformation from a symbol of urban decay to today’s modern, safe and vital economic engine.” Kiley implemented the first and second MTA Capital Programs, overseeing more than $16 billion worth of investments.

100 YEARS AGO in

Railway Age and Parsons NextGen Train Control Conference Key Bridge Marriott, Arlington, Va. Contact: conferences@sbpub.com; Website: www.railwayage.com/ nextgen.

Sept. 20-23, 2016 InnoTrans Messe Berlin Convention Center and Hotel del Coronado, Berlin, Germany Contact: mjbalve@globaltradeshow.com; www.innotrans.com

Sept. 21-23, 2016 Northeast Association of Rail Shippers Fall Meeting Sable Oaks Marriott, Portland, Me. Contact: www.nears.org

Oct. 10, 2016 Chicago Railroad Mechanical Golf Outing, Chicago Contact: http://www.thecrma.org/

Oct. 27-28, 2016 Railway Age Energy by Rail Conference Key Bridge Marriott, Arlington, Va. Contact: conferences@sbpub.com; www.railwayage.com/energy

September 8, 1916 Railway Strike Averted by Legislation The threatened strike of the railway train service employees, which had been ordered for the morning of September 4, was called off on Saturday evening after both houses of Congress had hurriedly passed a bill establishing eight hours as the standard for a day’s work and a day’s wage for employees engaged in the operation of trains on interstate railways. The bill provides for a creation of a commission to observe the effect of the introduction of the eight-hour basis and to report to the President and Congress.

Nov. 1-2, 2016 18th Railroad Environmental Conference - RailTEC University of Illinois at UrbanaChampaign/Illini Union, Urbana, Il. Co-sponsored by The Association of American Railroads, American Railway Engineering & Maintenance of Way Association, American Short Line and Regional Railroad Association, American Railway Development Association, and the Railway Association of Canada. Contact: rrec-conf@illinois.edu.; http://railtec.illinois.edu/RREC/ overview.php

Products New NEXTSENSE portable wheel profile measuring device

NEXTSENSE GmbH says its new device makes light work of measuring wear parameters on railway vehicle wheels with the utmost precision. Reducing the number of work steps and the extent to which users are involved in measurement operations enables wheelsets to be checked more reliably than ever. This ultimately increases the availability of the fleet and allows maintenance intervals to be optimized. Railway vehicle wheels are typical wear parts. The constant weight on the wheels when in use causes wear, which can have significant negative effects on the safety and reliability of railway vehicles. For this reason, all wheel profiles are measured regularly. Various gauges and measurement devices can be used for this purpose; they vary primarily in their degree of automation, their technology and the quality of the measured data they provide. However, a substantial gap in the market has been noted among the expensive tactile and optical profile measurement devices and the cheap mechanical gauges. NEXTSENSE GmbH says its new device is an alternative to these other devices, marketed for small businesses or rail transport companies specializing in goods transport. NEXTSENSE, the optical sensor specialist known for its multifunctional CALIPRI C40 profile measurement device, has currently developed this product mindful of an improved costbenefit ratio. The optical testing device can measure variables such as flange height, flange width and qR. In addition, the manufacturer guarantees that the device measures wear values

comprising wheel width, hollow tread and rollover, allowing a complete wheel profile measurement. The measurement device is therefore capable of providing the results of several measurements in one, which would otherwise require the use of multiple mechanical gauges such as a tread wear or tread thickness gauge. CALIPRI Prime is based on advances in the laser light sectioning process, which projects a laser line onto the profile to be measured and captures the contour with a camera. The use of multiple laser lines to capture the shape of the profile, thereby eliminating the possibility that the device could tilt or distort the image, is a world first. The measurement device can be operated by hand thanks to this “trick.” As such, the possibility of user interference is eliminated, thus making the results more consistently reproducible.

Mechanical gauges require measured variables to be read off a scale, documented in writing and then painstakingly entered into a database. CALIPRI Prime, by contrast, shows the wear values on its integrated display as soon as the measurement has been taken and can transfer the measured data to a computer via USB. With this innovation, NEXTSENSE has expanded its product range in the budget segment and is addressing the needs of workshop users, railway vehicle technicians and freight train operators. Clemens Gasser, Managing Director of NEXTSENS, explains: “CALIPRI Prime wins customers over because it provides the high-quality measured data that they expect from our products, but at an affordable price.” Contact office@nextsense.at for further information. www.nextsense.at

September 2016 Railway Age 53

Products IEM Vibration Monitoring System for Sound Transit

Flat spots on wheels can wreak expensive havoc on any railroad, freight or passenger—excessive rail and wheel wear, compromised ride quality, truck damage, and in a worse-case scenario, a broken wheel leading to a derailment. On top of that, there’s the noise, a relentless steel hammer pounding away on a steel rail with every revolution of the wheel. On a rail transit system, aside from the safety problems generated by flat wheels, the noise and vibration can adversely impact the surrounding community. Sound Transit, Seattle, ran into this problem on its Link light rail line, specifically, the portion of the right-of-way under the University of Washington campus. The university has world-class research laboratories containing sensitive instrumentation that could be impacted by vibration. Sound Transit turned to Troy, N.Y.-based International Electronic Machines Corporation (IEM Corp.) for a solution. 54

Railway Age

September 2016

IEM developed state-of-the art Vibration Monitoring System (VMS), and has attained “Substantial Completion” status for its installation. Substantial Completion is a status indicating that the customer has certified that the installed system along with its related software operates in a manner that meets all design performance specifications. The VMS system was designed to achieve two goals, IEM says: • Monitor all vibrations emanating from the Sound Transit operations under the University of Washington campus to ensure that there is zero impact on research taking place on the campus. • Provide system operators with real-time information about any light rail vehicle that has a wheel flat spot creating an unacceptable amount of noise. The affected LRV can be issued a slow order or be taken out of service prior to entering the tunnels beneath the campus. IEM’s system consists of three components, all described as “innovative”: • A Vibration Monitoring System (VMS) that monitors all vibrations emanating from Sound Transit rail operations. • A next-generation Wheel Flat Detection System (WFDS) that uses “sophisticated signal processing” to identify small flat spots at low speeds before they reach the point of generating an unacceptable level of vibration or damaging the wheel, the rail, and the suspension system. • The Smart Infrastructure Monitoring System (SIMS™), a “robust and redundant” industrial communications system that monitors all the sensors in the entire system and “intelligently” generates reports and alarms to train operators, maintenance supervisors, and University of Washington monitors in real time as necessary, according to Sound Transitdetermined alarm levels. “This is the first real-time remote asset monitoring system currently operating in any rail system in the world,” according to IEM President Zack Mian, “By taking an entirely new technological approach to the identification of wheel flat spots, we have created an easy to install, easy to operate system that can identify flat spots inaudible to the human ear at speeds as low as eight mph. Virtually any transit agency, no matter how small, can afford this system, and we believe that the savings in wheel wear, rail wear, damage to truck components, and improvements in ride quality and fuel economy will provide enormous benefits to transit systems throughout the world.” International Electronic Machines Corporation has provided transportation safety and security solutions for more than 25 years. IEM serves freight rail, transit, intelligent transportation system, defense, and security markets with core technical competencies in machine vision and video analytics, non-destructive evaluation, thermal imaging, wireless sensors and sensor networks, and robotics. For further information, see http://www.iem.net/.

Products Larson 25-watt red LED crane light Larson Electronics, a leader in the commercial and industrial lighting sector, has announced the release of a 25-watt red LED crane light designed to expand safety measures in hazardous work areas by actively providing early notifications for nearby workers and pedestrians. The EPL-TN-CRN-RED red LED warning light from Larson Electronics is an explosion-proof light that produces 2,250 lumens of sharp red light while drawing only 2.09 amps from a 12-volt electrical system. This LED spotlight is designed to be mounted on the front or back of a crane or other heavy machinery to warn pedestrians and bystanders when they are in the path of oncoming machinery. Five, five-watt red LEDs producing 450 lumens each are combined with high output parabolic reflectors to produce a narrow five-degree spread spot beam, providing a high intensity center beam that is visible at night and during the day.

This LED warning light can operate in temperatures ranging between –40°C and +80°C. It is also waterproof (up to one meter) and resistant to the ingress of dust, dirt, and humidity. The housing is formed from extruded aluminum and the lens is constructed of unbreakable polycarbonate. The light is enclosed in a Class 1 Division 1 casing constructed of copper-free aluminum with a thermoset powder coat finish. The lens on the casing is constructed of ¾-inch thermal shock and impact resistant tempered glass. This LED safety light is permanently mounted with a yolk type mounting bracket with a single through hole. “This new LED light eliminates the need for strenuous strobe lights and audible alarms that could cause more of a distraction rather than assist with safety precautions in a hazardous work area,” said Rob Bresnahan, CEO of Larson Electronics. Since 1973 Larson Electronics has manufactured industrial lighting and power distribution products: explosionproof lighting, portable hazardous location lighting, high powered LED lights, hand-held 12/24 Volt lighting, light towers and portable power distribution panels. Visit Larson Electronics at www.Larsonelectronics.com or call 1-800369-6671 for more information.

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September 2016 Railway Age 55

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

FRA News:

A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound. Part Title 210 Railroad Noise Emission Compliance Regulations 215 Freight Car Safety Standards 216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment 217 Railroad Operating Rules 218 Railroad Operating Practices - Blue Flag Rule 221 Rear End Marking Device-passenger, commuter/freight trains 223 Safety Glazing Standards 225 Railroad Accidents/Incidents 229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

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Ad Index Company

Phone #

Fax

URL/Email address

Page #

American Railcar Industries 636-940-6020 636-940-6100 sales@americanrailcar.com 39 Ameristar Perimeter Security USA, Inc. 918-879-6011 918-835-0899 allen.wright@assaabloy.com 38 Amsted Rail Group 312-922-4516 312-922-4597 kskibinski@amstedrail.com 11 763-784-2075 763-784-5236 cas4shoes@chetsshoes.com 53 Chet’s Shoes Curry Supply Co. 800-345-2829 814-793-4877 sales@currysupply.com 28 610-828-6200 610-828-2260 pbarents@danella.com 45 Danella Rental Systems, Inc. Dixie Precast 770-944-1930 770-944-9136 fbrown142@aol.com 50 Enerpro Inc. 717-201-1829 bobt@enerpro-inc.com 49 FreightCar America 312-928-0850 312-928-0890 tbaun@freightcar.net 37 Greenbrier Companies The 800-343-7188 503-684-7553 gbrx.info@gbrx.com 46 Herzog Railroad Services, Inc. 816-233-9002 816-233-7757 tfrancis@hrsi.com 15 708-367-2987 708-672-0119 ptenhoven@hollandco.com C4 Holland Co. Koppers, Inc 412-227-2739 412-227-2841 ambrosegf@koppers.com 42 LTK Engineering Services 215-641-8826 215-542-7676 tfurmaniak@ltk.com 51 MAC Products 973-344-0700 973-344-5891 edward.gollob@macproducts.net 13 215-430-5506 215-568-1349 malisesky@mbakerintl.com 14 Michael Baker International New York Air Brake 315-786-5431 315-786-5676 janice.pfeil@nyab.com 23 618-241-9270 618-242-8519 sales@nre.com 30-31 NRE 201-825-0300 201-825-3524 info@okonite.com 5 Okonite Co. PNC Equipment Finance 513-455-9056 robert.hogan@pnc.com 34 716-822-3600 716-824-4817 r.panzica@powerdrives.com 3 Power Drives, Inc. Progress Rail Services 256-505-6402 256-505-6051 info@progressrail.com 29, 36 800-235-1782 708-844-5559 jdonnan@railheadcorp.com C2 Railhead Corp. Railquip Inc 770-458-4157 770-458-5365 sales@railquip.com 16 973-763-4320 973-763-2585 rails@railsco.com 20 Rails Co. Railway Educational Bureau, The 402-346-4300 402-346-1783 bbrundige@sb-reb.com 44, 50, 55, 56 RailWorks 866-905-7245 952-469-1926 jrhansen@railworks.com 32-33 Ritron, Inc. 800-USA-1-USA 317-846-4978 sales-info@ritron.com 48 502-365-5198 17 Road & Rail Services, Inc. RSSI 502-327-7774 502-327-0541 rssi@rssi.org 21 630-685-4661 630-783-2590 sales@salcoproducts.com 25 Salco Products, Inc. Siemens Industry, Inc. 412-944-6533 amanda.weir@siemens.com 9 888-872-4612 sales@signalcc.com 20 Soft Rail Strato 732-317-5406 732-981-1222 korozco@stratoinc.com 19 508-556-5500 info@vertexrail.com 18 Vertex Railcar Corporation Wi-Tronix 888-948-7664 630-679-9954 cjasmin@wi-tronix.com C3 7 Zhuzhou CSR Times Electric Co. The Advertisers Index is an editorial feature maintained for the convenience of readers. It is not part of the advertiser contract and Railway Age assumes no responsibility for the correctness.

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, AR, IN, KY, LA, MI, MS, OH, OK, TN, TX Jon Schact 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5021 jschacht@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, WV, Canada – Quebec and East, Ontario Jerome Marullo 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

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Scandinavia, Spain, Southern Germany, Austria, Korea, China, India, Australia, New Zealand, South Africa, Russia, Eastern Europe Baltic States, Recruitment Advertising Julie Richardson International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185 jr@railjournal.co.uk Italy, Italian-speaking Switzerland Dr. Fabio Potesta Media Point & Communications SRL Corte Lambruschini Corso Buenos Aires 8 V Piano, Genoa, Italy 16129 +39-10-570-4948 Fax: +39-10-553-0088 info@mediapointsrl.it

Japan Katsuhiro Ishii Ace Media Service, Inc. 12-6 4-Chome, Nishiiko, Adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Jeanine Acquart 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7211 Fax: (212) 633-1325 jacquart@sbpub.com

September 2016 Railway Age 57

equipment Sale/Leasing

Available For Lease ◆ Pressure Differential (PD) Covered Hopper Cars – 5,125 & 5,230 cu. ft., 286K GRL, operate at 14.7 psi. ◆ Covered Hopper Cars – 4,750 cu. ft., 268K Gross Rail Load, trough hatch/gravity gates. ◆ Pressure Differential (PD) Covered Hopper Cars – 3,915 cu. ft. capacity, operate at 14.7 psi. ◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides. For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail jgoodwin@mwrail.com www.carmathinc.com

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 4480 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks (1) Shuttlewagon SWX 630 Railcar Mover Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

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Railway Age

September 2016

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LEGAL NOTICES

Legal Notice

EMPLOYMENT

Yangtze Railroad Materials, headquartered in Baltimore, MD is hiring for Marketing Manager, preferably for professionals with 5 years+ Marketing/Sales Experience in the Railroad Industry. If you are interested, please e-mail your resume to info@yangtzeproducts.com.

The Connecticut Department of Transportation will be requiring professional consultant services for the 2017 calendar year. Consultant firms must be prequalified by the Department in order to provide services. Additional information can be obtained by visiting: www.ct.gov/dot/business/consultant/selection and following the Annual Consultant Prequalification link or by contacting the Consultant Selection Office at (860) 594-3017. Submittals must be hand delivered by 3:00 pm on Tuesday, November 15, 2016 or postmarked by this date and received within 3 days. No submittals will be accepted after the due date. Connecticut Department of Transportation An EO/AA/ADA Employer

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GLOBAL RAIL TENDERS

September 2016 Railway Age 59

Perspective William C. Keppen

Redefining medical fitness for duty

RA-regulated railroads are the only U.S. transportation mode that do not have comprehensive, federally mandated medical fitness-forduty standards and monitoring protocols. Only vision and hearing are covered by FRA regulations. That leaves railroads free to fashion standards and impose them, at will, on employees. This is a bad situation for railroad workers and unions. One example is the policy (paraphrased) of one railroad that imposed unilateral medical fitness-forduty standards: “Diabetes treated with insulin and severe sleep apnea have been added to reportable conditions that apply to field employees. These employees must report any new diagnosis or change in a prior stable condition for cardiac conditions, including heart problems and strokes; seizure or loss of consciousness; insulintreated diabetes; severe sleep apnea; a significant change in vision or hearing including eye surgery, new use of hearing aids, etc. Employees must report any condition that may impact their ability to work safely. Medical rules are based on safety standards and regulations. They determine fitness for duty, including the medical and functional ability to work safely, with or without reasonable accommodations, and meet medical standards established by regulatory agencies.” This was positioned a “safety” policy. As such, this railroad established the right to unilaterally determine its policy’s structure and content and determine how and to whom it is applied. The policy was written without input from workers or unions. It is vague, and the unpublished standards may very well be arbitrary. The federal regulatory process allows for input from stakeholders and other interested parties. When medical fitness-for-duty regulations for other transportation modes were being

Railway Age

September 2016

developed, workers had the opportunity to provide testimony. Medical fitness standards for commercial motor vehicle operators, for example, were the product of an independent, nationally recognized medical expert panel. Policies and standards written and imposed unilaterally by railroads lack the structure and constraints implicit in regulation, and vary widely. Establishing medical policy and standards, unilaterally, no matter how vague, reasonable or unreasonable, and making unilateral decisions on how and to whom they are to be applied, allows railroads to make out-of-service decisions, unilaterally,

Adopting FMCSA standards and protocols would make a lot of sense. even though they may not be qualified to make such decisions, leaving workers and their representatives with whatever recourse, if any, in the terms of their collective bargaining agreements. As well, employees are “guilty” (medically unfit) until they prove themselves “innocent” (medically fit). Even if an employee is eventually able to prove that he/she is medically fit, there may be no compensation for lost time and benefits. Thus, the right of railroads to medically disqualify employees denies those employees the ability to earn wages and benefits. This approach alienates employees and unions, greatly diminishing the chance to gain labor’s cooperation. Such policies and medical standards are almost certain to yield disparate and

substandard results, leaving railroad workers and the public at great risk. When railroads have no requirement that employees undergo regular medical fitness-for-duty examinations, the employees decide when and what kind of medical procedures will be undertaken, no matter how at-risk they may be. Employees who receive a medical diagnosis that they are at-risk due to a performance-impairing medical condition decide whether that diagnosis rises to the level of a reportable condition, and if it is actually reported. Such policies have the effect of driving the problems associated with medical conditions underground, because employees are not going to report conditions that will result in being removed from service. They cause workers to avoid regular medical examinations because they may find out they have a reportable medical condition that, if reported, could result in them being held out-of-service. Instead of regulatory solutions, let’s consider an alternative: Adopt FMCSA (Federal Motor Carrier Safety Administration) medical fitness-forduty standards and protocols and apply them uniformly across the rail industry, except where they are in conflict with other federal or state regulations. This could be done in an expeditious manner, without all the delays and costs associated with the rulemaking process. Qualified, FMCSA-certified medical examiners would make decisions, thereby addressing labor’s concerns about unfair or unjustified medical outof-service decisions. Covered workers would be treated equally. William C. Keppen, Jr., a Transit Safety Analyst for a Close Call Reporting Program on an East Coast transit agency, is a former Class I BLET officer with experience in fatigue countermeasures programs.

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