Side Tracks
What I Did on My Summer Vacation…
August 23rd, 2010My kids don’t go back to school until after Labor Day, but I thought I would write about what I just did over the last week. Holly and I got to spend a week together in California doing what every good tourist should do: Universal Studios, the San Diego Zoo, and the granddaddy of them all, Disneyland.
Some of you are saying “wasn’t he just in Orlando a couple of months ago and went to the Magic Kingdom?” Well, you guys are correct, we did get to spend a day in the park at the end of the ASLRRA Annual Meeting, but this was different. This was VACATION!
First of all, we were in Southern California, which is going through their coolest summer in years (San Diego had their hottest day of the summer while we were there, 82 degrees. Our hottest in New Jersey this year was well over 100 degrees), and it was warm, but not humid. Second of all, we were in Southern California, which, until it falls into the Pacific in the Big One, is a beautiful place to visit.
So why did we go to Disneyland? Especially since we didn’t have our kids with us? Mostly because we didn’t have our kids with us and we wanted to go to Disneyland. Both of us are big kids at heart, and we both truly enjoy the experience that one has on the Disney properties. Walt Disney was a master planner when it came to the experience, and even 55 years later that experience reflects his understanding of human nature and how to provide quality at such a high level that one wants to return over and over again. When one looks at Disneyland, and tries to compare it with Walt Disney World in Florida, you can see both the limitations that Walt had when he first built the park in California and how in their second version the Disney company (Walt died five years before WDW opened) took those limitations and turned them into the experience that tens of millions enjoy every year. The other thing that Disney does better than anyone I have ever seen is how they deal with people. Be it transporting them, serving them, or entertaining them, the Disney management process and style cannot be matched. Books and studies have been written taking apart the process, and while it is one that many (including myself) have tried to copy, it is nearly impossible to do.
So which property did we like better? Florida has a better overall package due to the amount of space they have, but there are individual rides, such as Pirates of the Caribbean and The Haunted Mansion which are significantly different and tell the story better in California (sometimes you shouldn’t fool with the original). In the end, the original Magic Kingdom, Disneyland, truly shows what one man can do with his dream, if he controls it from the start (Disney himself said that Disneyland would never be finished, and signified it by not putting gold leaf on one of the spires of Sleeping Beauty castle). The parks that followed the original have been in Walt’s style, but do not have his touch. This is probably best shown by California Adventure, the sister park to Disneyland that has never had the popularity or polish of the original, and was so far off the mark in its theming that it is undergoing a major rebuild that will result in almost 40% of the park changing before it is done in 2012.
And the best part of my trip? I got to spend a week with my wife having fun. We laughed, we got away from the daily grind, and we got to relax. We actually spent a day sitting by the pool and taking a nap, which for us is truly unusual. It really was a vacation (and thank you to all who left us alone while we were away, it makes a difference).
—By Steve Friedland
Steve Friedland is a child of the railroad industry. Following summers and vacations working on the track gang for the family-owned Morristown & Erie Railway, a 42-mile New Jersey short line, he started full-time in 1994. He has worked in all areas of the railroad, including track, mechanical, signals, and operations, and currently is a member of the management team for the company as director of operations in Morristown, N.J. In 1999, he founded Short Line Data Systems, a provider of railroad EDI and dispatching software, AEI hardware, and management consulting to the short line industry. He also served as chairman of the ASLRRA’s Technology Committee for the past four years.
I’m Outta Here!
August 12th, 2010Well, not gone completely. But, I am going on vacation with my wife next week, and I thought that this would probably be a good time to take a look back at this year’s entries, and see where we have been, and where we are headed going into the latter third of this year.
Let’s start out with my resolutions for the New Year. Back in January, I gave you a list of items that I thought I would be able to accomplish in 2010. Fortunately, I did not list losing weight on that list, because I would have failed miserably, but otherwise I have done ok. The Narrowband radio transition has begun, and I hope that my efforts and the efforts of the AAR and ASLRRA to get the message out have been successful. Things on the regulatory front have been relatively quiet (compared to the previous 18 months or so), and work has been progressing on conductor certification and the other regulatory requirements brought about by the Rail Safety Act of 2008.
The regulatory process has its roots in Washington, of course, and a large group of railroaders and other industry people descended upon the House and Senate office buildings this spring for Railroad Day on Capitol Hill, and for one of the first times that I could remember, we went to the meetings being the “Good Guys” and not the “Evil Empire.” I hope this good will continues (or some other political cause distracts our representatives), because there are going to be a couple of things that we need to get done, like a long-term tax credit.
Things have been kind of busy at the M&E so far this year, with traffic slowly growing following a hit due to the economy. We have been running our passenger excursions for the Whippany Railway Museum with great success, and our proximity to New York has led to a recent increase in the number of film and photo shoots that we have been involved with. I guess that trains are “in” with the popular media this year.
SDS has also kept me pretty busy with travel, and while my vacation will be the first time I have been west of Texas this year, the power of remote access to computers has allowed me to keep closer to home. I have been trying to get updates and revisions done, but like anything else in life your intended and actual schedules can vary greatly. One travel highlight of the year has been my flying up to our railroad in Maine in a Piper Cherokee piloted by the M&E’s computer hardware contractor, which was a truly memorable and unique experience.
Finally, as usual I have been very busy with my friends and associates at the ASLRRA. This year’s Annual Meeting was a resounding success, with a spectacular program and venue, and a record number of attendees. The Regional Meetings are now approaching, and registration has opened for this year’s Eastern Region Meeting in Baltimore September 11-14. I am honored to be the chairman of this meeting, and I believe that the Association and the planning committee (which included my blogging cohort on this site) have put together a first class program for the meeting (but I am biased). Come down to Baltimore (or go to Kansas City or Atlanta), and get to see the “latest and greatest” that is going on in our industry.
Well, I’m out of here, and I hope that everyone enjoys the last couple of weeks of summer.
—by Steve Friedland
Steve Friedland is a child of the railroad industry. Following summers and vacations working on the track gang for the family-owned Morristown & Erie Railway, a 42-mile New Jersey short line, he started full-time in 1994. He has worked in all areas of the railroad, including track, mechanical, signals, and operations, and currently is a member of the management team for the company as director of operations in Morristown, N.J. In 1999, he founded Short Line Data Systems, a provider of railroad EDI and dispatching software, AEI hardware, and management consulting to the short line industry. He also served as chairman of the ASLRRA’s Technology Committee for the past four years.
Connections That Work
August 11th, 2010I’ve been thinking a lot about work these days. I know that sounds odd because it is, after all, August–that month when lots of folks are either on vacation or are about to go on one.
While my bosses will be delighted to hear that I’m thinking about work, my thoughts aren’t so much on the day-to-day crush of emails, phone calls and normal business flow. I’m pondering the actual role of work and work relationships.
Let me explain. I just completed a manager professional development seminar put on by my employer based upon the book The Three Signs of a Miserable Job. New York Times best-selling author Patrick Lencioni offers suggestions to make virtually any job more rewarding and fulfilling. It’s an interesting quick read.
One of the takeaways from the book is that the best managers and leaders are those that take a real interest in their employees-and not just as workers. The author notes that the direct supervisor needs to take a genuine, personal interest in an employee in order to increase that employee’s satisfaction and sense of fulfillment. Take the time to get to know your people and find out what’s important in their lives, their suggestions for improving processes at work, and their career ambitions and pretty soon you’ll have some pretty powerful teamwork. When you ask your staff how their weekend was, you need to actually want to hear their response and prepare for the fact that it may not be a drive-by answer.
Sounds pretty simple, right? Maybe. I think most managers do this naturally, but I’m sure there are still some who are uncomfortable with the idea or might be shy. They might feel that by taking an interest in their personal lives they will be veering into inappropriate territory, and think managers and employees should have an almost church and state kind of relationship.
Those might be the same people who would decline a “friend” request on Facebook from someone at their job or a work colleague but connect on LinkedIn. The thinking there would be that LinkedIn is for folks you work with, but Facebook is where you stay in touch with friends (or, more likely, people you probably barely remember having gone to grade school or high school with).
Lencioni’s book is a gentle reminder to all of us to keep engaging and investing in our relationships on the job. Over the last two decades or so, I’ve been fortunate to have worked with and for some fantastic people, who quickly moved from colleague to “work friend” to cherished friend for life.
When you are lucky enough to be surrounded by people you know well and really enjoy working with, that’s when work isn’t work anymore. And that’s when “miserable” would be the last word you’d use to describe your job.
—By Kathy Keeney
Kathy Keeney is Publisher of the Rail Group at UBM Global Trade. The granddaughter of a railroader, she has been writing about railroads for more than 25 years. She is immediate past president of The League of Railway Industry Women, and served on the board of directors for the American Short Line and Regional Railroad Association.
No, You Are Wrong About That
July 27th, 2010I have mentioned in the past my hobby of building model cars. In particular, my interest is in open wheel (Formula 1 and Indy) and sports prototype (Le Mans) type race cars, and I have built up a pretty large collection of built and unbuilt models over the years. One of the major parts of building a scale model of something is researching the subject, and (hopefully) getting the correct information so that you can create an accurate representation of the real thing. Since going over to Europe and visiting a bunch of museums in England and Germany is not in the current budget plans at the moment, the best reference source these days is the internet, and the many forums and sites that are available at your fingertips.
For many years, I was an active member of a group on the ‘net that dealt with Formula 1 cars, and I actively communicated with people all over the world, exchanging information, ideas, and critiques of work that everyone was doing on their various projects. As time went on, I got busy with my own business, and family, and while I was still building the models, I found myself spending my time reading the posts from the group, and doing less and less of my own posting. One of the big reasons why I did this was the increasing number of people who joined the group, and took it upon themselves to be experts on the subject, to the point of dismissing other people’s input in a discussion, whether their own information was correct or not. These days, I still observe the group, and read what comes across on their website, but I really have no interest in participating with people who have to be the “expert.”
With railroading, we have some of the most detail-oriented hobbyists out there. Whether they are modeling a certain railroad or taking and collecting pictures (or just about anything else having to do with a railroad), the railfan is a very unique character. Many of these people have been interested in trains since childhood, and a lot of them have “their” railroad that they have focused on throughout this time. Sometimes this extreme focus has led to a history or belief about certain things that went on with the railroad that is a little different than reality.
There are a number of railroad discussion boards and sites available today, and while I check on a number of them, you will never see me or most of the M&E’s management post or comment on these boards. Why? Well, there are a couple of reasons: first, in this day and age of heightened security, there is a real concern about “loose lips sink ships,” and we have to make sure that we run a safe and secure operation. Next we are trying to run a business here, and giving public explanations of what is going on with our customers is not fair to them, and not good business practice. Lastly, the fact remains that we have been “corrected” by railfans about things that went on here, and if they feel that they can be the expert on the subject, then we will let them be the “public” expert. Believe me, if we want to get a message out on one of these outlets, we have a number of “mouthpieces” that can put out the word.
We all have our hobbies and interests. When they become an obsession or start to alter reality then they stop being fun for others.
–By Steve Friedland
Steve Friedland is a child of the railroad industry. Following summers and vacations working on the track gang for the family-owned Morristown & Erie Railway, a 42-mile New Jersey short line, he started full-time in 1994. He has worked in all areas of the railroad, including track, mechanical, signals, and operations, and currently is a member of the management team for the company as director of operations in Morristown, N.J. In 1999, he founded Short Line Data Systems, a provider of railroad EDI and dispatching software, AEI hardware, and management consulting to the short line industry. He also served as chairman of the ASLRRA’s Technology Committee for the past four years.
New Tools, New Toys
July 12th, 2010I was in Montreal recently for the AAR Wireless Communication Committee meeting, and as many of you have heard me talk about in various forums over the last couple of years, the change to narrowband radios is now upon us. If you have locomotives in interchange service, you should have already changed your radios on the locomotives to a narrowband capable one, and you should be working on (or already have started) purchasing narrowband portable, mobile, and dispatch radios for the rest of your system in preparation for the start of the transition, which will take place in 2011, and run through 2012.
While the physical changeover won’t be starting for at least another six months, one thing everyone should be doing now is renewing their license with the FCC to include the narrowband channels. All you have to do is contact Jim Reimer at the AAR, and his people will help you with what you need to do.
One of the other things that people have heard me recommend over the last couple of years is that when you buy your new equipment, make sure that you are buying equipment that is capable of tri-mode (25kHz Wideband, 12.5kHz Narrowband, and 6.25kHz Very-Narrowband NXDN Digital) communication. This is especially important if your railroad is in a congested area, because it is possible that when the migration is done that some areas will have the 6.25Khz channels in addition to the 12.5kHz ones. Now remember, you should first check to see if your existing equipment can be reprogrammed to handle the 12.5kHz channels before trashing all of your existing equipment, and only buy what you need.
This is only the start of what will be a massive change for our industry, and “stay tuned” to keep up with the latest goings on.
While I was in Montreal, a new toy arrived at home for me to play with: a 64Gb wi-fi only iPad. I have been watching the goings on with this new exciting piece of hardware, and finally decided that it was time to take the plunge and see what it can do. If you have been a regular reader of this blog, you know that I own an iPod touch, and feel that it is a very powerful handheld computer, in addition to being a great way to have your music and videos on the go. I also have a Motorola Droid cell phone, which is without a doubt the best and most useful mobile device I have ever had, and I seem to prefer the Android operating system (which is on the Droid) to the Apple operating system in the iPod and iPad.
So, my quandary is “what can the iPad do for me?” It’s a great tool to look at news and the web, videos are beautiful, and there are tons of Apps available for reasonable prices. It has all sorts of potential, but I just don’t know yet what the “must have” reason for it is. I’m sure I will find it (or develop it), but it just hasn’t jumped out yet and tapped me on the shoulder and said “Hi”.
And don’t think for a second that I am going to get rid of it. It’s my new toy.
—By Steve Friedland
Steve Friedland is a child of the railroad industry. Following summers and vacations working on the track gang for the family-owned Morristown & Erie Railway, a 42-mile New Jersey short line, he started full-time in 1994. He has worked in all areas of the railroad, including track, mechanical, signals, and operations, and currently is a member of the management team for the company as director of operations in Morristown, N.J. In 1999, he founded Short Line Data Systems, a provider of railroad EDI and dispatching software, AEI hardware, and management consulting to the short line industry. He also served as chairman of the ASLRRA’s Technology Committee for the past four years.
See ‘n Say
July 7th, 2010The Department of Homeland Security is expanding to the national stage a program that was successful in New York City.
DHS Secretary Janet Napolitano this month launched the first phase of DHS’ nationwide “See Something, Say Something” campaign and announced a new national information-sharing partnership with Amtrak as part of the department’s nationwide Suspicious Activity Reporting (SAR) initiative. She spotlighted the public’s role in keeping the country safe by bolstering surface transportation security.
“Implementing a national suspicious activity reporting partnership with Amtrak and expanding the See Something, Say Something campaign strengthens our ability to guard against terrorism and crime,” said Secretary Napolitano. “These initiatives enable us to provide frontline security personnel with the latest information and intelligence to recognize behaviors and indicators associated with new and evolving threats.”
The See Something, Say Something campaign, first implemented by New York City’s Metropolitan Transit Authority and funded, in part, by $13 million from DHS’ Transit Security Grant Program, is aimed at raising public awareness of indicators of terrorism, crime and other threats and emphasizes the importance of reporting suspicious activity to transportation and law enforcement authorities.
DHS plans to expand the campaign over the next few months nationally with public education materials, advertisements and other outreach tools to continue engaging travelers, businesses, community organizations, and public and private sector employees to remain vigilant and play an active role in keeping our country safe. The See Something, Say Something campaign complements the national SAR initiative–a partnership among federal, state, and local law enforcement to establish a standard process for law enforcement to identify and report suspicious incidents or activity and share that information nationally so it can be analyzed to identify broader trends.
DHS said it will continue to work with Amtrak and others to expand the Amtrak SAR effort to regional railways, freight railroads and other mass transit agencies.
In the last several years, terrorist groups have targeted passenger rail systems with attacks in London, Madrid, Moscow, Mumbai, and elsewhere. It’s human nature that people are extra vigilant soon after such terrorist events, and become complacent over time. The new public outreach effort in the U.S. should be a helpful reminder.
There are sure to be problems along the way in implementing this initiative, including the potential for profiling and for misinterpeting the intentions of camera-toting railfans near railroad properties. In the end, though, law enforcement agencies would prefer to have more information than less and more watchful eyes than fewer.
Let’s see how it goes…
—By Kathy Keeney
Kathy Keeney is Publisher of the Rail Group at UBM Global Trade. The granddaughter of a railroader, she has been writing about railroads for 25 years. She is immediate past president of The League of Railway Industry Women, and served on the board of directors for the American Short Line and Regional Railroad Association.
The Only Way to Fly…
June 30th, 2010As many of you know, the Morristown & Erie actually has three railroads under its umbrella: the original M&E, which operates in Morris County, New Jersey, the Maine Eastern (MERR), which operates in the midcoast section of southern Maine, and the Stourbridge Railway (SBR), which operates in north eastern Pennsylvania. The Maine Eastern and Stourbridge both have active excursion passenger lines on them, and for ticketing on both railroads we utilize a ticketing system that I wrote for them known as PETROCS. PETROCS has been in use at the MERR for four years now, and this is our first season operating the service on the SBR. To maximize the utilization of our resources, we decided to handle all reservations for both railroads from our Maine offices, and I had to go up there with our computer person to set up the hardware that would allow us to get everything done.
When the MERR started up, I spent a good amount of time up in Maine setting up our processes and computers for both the freight and passenger sides of the operation, but schedules and the fact that things were running smoothly had kept me from getting up there over the last couple of years (it is amazing what you can do with a telephone and remote access of a computer these days), and it was good to have the opportunity to make the trip. Normally, to get up to Rockland, which is where our offices are, you drive up (eight hours) or take the plane or train to Portland and drive from there (travel time on the plane or train plus a 2 ½ hour drive), both of which really result in a full day of travel (at least). This time though, I had my ace in the hole.
Arthur Olshan, who is the contractor that maintains our computers in New Jersey, is a private pilot with access to a 1964 Piper Cherokee, which is a four seat propeller plane. Our plan was to fly up together to Maine to the Owl’s Head airport, which is five minutes from our offices, spend two full days up there setting up the new system, and fly back. By flying directly up it would take us about 2 ½ hours to get there, and we actually gained an extra half day to get stuff done, which in the end we needed. The flights themselves were great, with clear weather and light winds in both directions, and the ten mile visibility allowed us to get a great view of the route and the land below us. All in all it was a very enjoyable experience, and one that I would do again if the opportunity presented itself.
The visit to our Maine offices was good too. As I mentioned above, it had been a couple of years since I had been up there, and while it really was my intent to come up and pay a visit, life kind of got in the way. We do have some great people taking care of the operation in Maine, and while Arthur and I were dealing with making sure the electrons and bytes were going in the right direction, they were very patient and accommodating to our disruption. We got the new ticketing system up and running in the time allotted, and even ended up with some time to deal with some aging hardware that had not been really swept of viruses since my last visit up north.
Now, if you are wondering how the costs compared with going the traditional route, for the situation that we were in, it was less expensive to do what we did. If we had to rent a plane, it would have been more expensive. The extra time that we gained by the direct flight was definitely put to good use, and if we had really run into problems we would have been able to adjust our travel schedule to fit our needs. Oh, and there was one other benefit to taking our own plane: my wife, mother, and step-father got to have some fresh off the boat lobsters that I brought back with me for dinner, with no extra baggage charges .
It really was the only way to fly.
—By Steve Friedland
Steve Friedland is a child of the railroad industry. Following summers and vacations working on the track gang for the family-owned Morristown & Erie Railway, a 42-mile New Jersey short line, he started full-time in 1994. He has worked in all areas of the railroad, including track, mechanical, signals, and operations, and currently is a member of the management team for the company as director of operations in Morristown, N.J. In 1999, he founded Short Line Data Systems, a provider of railroad EDI and dispatching software, AEI hardware, and management consulting to the short line industry. He also served as chairman of the ASLRRA’s Technology Committee for the past four years.
New Destinations
June 23rd, 2010Been to Minneapolis lately? How about Indianapolis or Cincinnati?
Reason I ask is that it seems that the rail trade show circuit is broadening a bit. There are some definite standard cities for rail conventions (and conventions in general): Orlando, San Antonio, Washington, Chicago, Seattle, Nashville, St. Louis, Kansas City, Baltimore, San Diego, New Orleans, Las Vegas and Atlanta.
I’ve seen a lot of emails recently promoting next year’s Railway Interchange conference (Sept. 18-21, 2011) in Minneapolis. Exhibit sales open up July 1. The indoor exhibits will be hosted by the Railway Supply Institute (RSI), the Railway Engineering & Maintenance Suppliers Association (REMSA), and Railway Systems Suppliers, Inc. (RSSI) and technical sessions will be hosted by the American Railway Engineering and Maintenance-of-Way Association (AREMA) and the Coordinated Mechanical Associations (CMA).
RI 2011’s indoor exhibits and technical sessions will be held at the Minneapolis Convention Center and its outdoor exhibits will be held about 20 minutes away at Canadian Pacific’s Humboldt Yard. Organizers of this joint event are expecting some 5,000 attendees.
I haven’t been to Minneapolis for a conference in probably 20 years now, so I’m looking forward to seeing how it’s changed and to how the big rail show experiment turns out.
Indianapolis is also emerging as a destination on the rail show circuit. The American Short Line and Regional Railroad Association (ASLRRA) will hold its annual convention there in 2012 and my understanding is that the second Railway Interchange is scheduled there in 2013.
RSSI, which held its convention this year in Omaha, has selected Cincinnati as the location for its next stand-alone annual convention in May 2012. (Cincinnati is one town that I’ve never been to).
And as someone who both “mans” a booth at railroad shows and works behind the scenes managing some other rail shows, I often think about business travel and rail conventions and the factors behind what drives attendance.
Certainly, budgets are the largest factor in travel. Assuming there’s money in the budget, do you go to certain railroad conferences and shows regardless of their location? (In other words, do you go wherever the customers are?) Are you more likely to go if it’s one of your favorite cities? How much of an impact do the speakers and educational lineup have on your decision? Are you more likely to attend if it’s an event that you can drive to instead of jumping on a plane or train?
Feel free to share your thoughts. See you in Minneapolis, if not before.
—By Kathy Keeney
Kathy Keeney is Publisher of the Rail Group at UBM Global Trade. The granddaughter of a railroader, she has been writing about railroads for 25 years. She is immediate past president of The League of Railway Industry Women, and served on the board of directors for the American Short Line and Regional Railroad Association.
It Used to Be a Lot Easier Back Then…
June 14th, 2010When you look at how railroads were built originally, there were huge challenges. How the builders dealt with those challenges is directly related to what they needed to do in the long run. In the East, railroads were really in their infancy when the first lines were built, so curves were tighter, bridges shorter in length and height, and the roadbeds generally followed the flattest geography there was, and that is a river.
The Morristown & Erie is a great example of that, as the original 1895 alignment of the roadbed follows the Whippany River. Once expansion took place to the west (and I’m talking across the Mississippi and beyond, not into Pennsylvania), railroad technology had moved forward to the point that instead of going around an obstacle, in many cases you went through, over, or across it (The Rockies were a bit of a challenge, but it was solved). No matter what the challenge, the railroad was able to get through no matter what the cost in people or material.
Fast forward to today. We’ve already proven that no matter what the geographical or physical challenge, we can overcome it. So, what are the challenges to a modern railroad? Are they physical? Yes, but in a different way. Are they geographical? Yes, but not in the way you might think. In fact, most of the challenges to the modern railroad come from ourselves, and the belief that we can dictate to all others how things should be at any time.
Let’s take a look at where the current challenges come from:
Federal Government: These are the people who should have the most say, and really do. Since most railroads cover multiple municipalities, states, or countries, it has been decided that the Federal Government has the most say in how we operate and what we do. This doesn’t mean that the lower levels of government or localities don’t have any control, as evidenced by some of the parts of the Rail Safety Act of 2008, but the Feds do have the final say. This could be through the FRA, STB, OSHA, or any of the alphabet soup of agencies that we deal with, but it is in the end easier than having to have all of those same agencies for each town that a railroad operates through.
State Government: They have a bit of regulatory control over what we do, but where the state governments really get involved is with the purse strings. It could come through taxation, but for short lines, a lot of control by the states comes through their infrastructure assistance programs. For a short line, maintaining the right of way can be a very expensive prospect, and a number of states have assistance programs to help fund rehabilitation and development. To get these funds, companies will have to meet the requirements of the state agencies that provide these funds, and in some states, those agencies are at the mercy of the local governments, as in New Jersey, where state projects require letters of support from each municipality that a project will take place in. It’s amazing to watch a multi-million dollar project come to a screeching halt because a local town manager doesn’t want to write a letter.
Local Government: For the most part, this is a case of “what’s in this for me,” and from what I’ve run into all across the country they really are not looking at the things that we are looking at. In many cases, we may see a new customer as increased revenue for the railroad, but the local government is looking to see if they will be receiving any new tax revenue for what could be a drain on the municipal resources. Also, they are the closest to the community at large (see NIMBY’s, coming in the next section), and have the most at stake in responding to their constituents. The local governments really have the most to gain from dealings with the railroad, but if handled poorly they also might have the most to lose.
NIBMY’s (Not In My Back Yard people, otherwise known as the neighbors): This group can be the biggest impediment and the biggest help you might have. Work with them, and show how the project will benefit them, they will be your biggest friend. Cross them once, and you will never have their support again, no matter what you do. Now don’t think that I feel that you don’t have a right to have a clean safe place to live and raise a family. In fact it is the opposite. I hope that everyone has the opportunity to live and raise a family in a clean and safe place. Where I draw the line is when you have someone who has moved next to the railroad, and knows full well that the railroad is there and what it does, and then expects you to improve their situation for them. I’m sorry, but that is simply not anyone’s responsibility to do other than the person themselves. Not the railroad, not the local government, not the state government, nor anyone else. We all have a right to coexist, equally and fairly for all.
Are the current obstacles to building and operating a railroad any more dangerous or daunting than what the pioneers of the rail industry faced in the 19th Century? Physically yes, time and cost wise, no.
—By Steve Friedland
Steve Friedland is a child of the railroad industry. Following summers and vacations working on the track gang for the family-owned Morristown & Erie Railway, a 42-mile New Jersey short line, he started full-time in 1994. He has worked in all areas of the railroad, including track, mechanical, signals, and operations, and currently is a member of the management team for the company as director of operations in Morristown, N.J. In 1999, he founded Short Line Data Systems, a provider of railroad EDI and dispatching software, AEI hardware, and management consulting to the short line industry. He also served as chairman of the ASLRRA’s Technology Committee for the past four years.
CAT’s Bullish on Rail
June 9th, 2010Caterpillar is making a Warren Buffett-like move in the railroad industry but with only a fraction of the headlines.
Buffett grabbed a lot of attention with his bet on the rail sector and the U.S. economy with his firm’s purchase of BNSF (completed earlier this year). Caterpillar, one of the world’s leading heavy equipment manufacturers, quietly built up its presence in railroading the last four years, but amped up its commitment when it targeted locomotive manufacturing giant, EMD.
This month, Caterpillar’s Progress Rail Services subsidiary signed a definitive agreement to purchase Electro-Motive Diesel (EMD) for $820 million in cash from two private equity firms. Barring any regulatory or other setbacks, the parties expect to complete the transaction by year’s end.
Including the EMD, Progress Rail and other bolt-on purchases, Caterpillar has invested about $2 billion since 2006 to grow its rail and transit businesses. “This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry,” said Caterpillar Vice Chairman and CEO-Elect Doug Oberhelman. “Rail has proven to be a highly efficient and sustainable method for moving freight and people, and we see a positive long-term future for the continued growth of the rail industry.”
The proposed EMD purchase positions the industrial giant to compete directly with General Electric in the locomotive manufacturing segment and to take advantage of increased infrastructure investment and an improving economic climate. EMD, which posted $1.8 billion in 2009 revenues, says it has the largest installed base of diesel-electric locomotives in the world.
Progress Rail Services is a leading provider of rail and transit products and services in North America, including: locomotive upgrade and repair, railcar remanufacturing, track work, rail welding, rail repair and replacement, signal design and installation, maintenance of way equipment, parts reclamation and recycling.
Yesterday, Caterpillar executives unveiled the company’s Vision 2020 strategy to employees, dealers, suppliers and shareholders.
“As we build on our strategy from 2005 and communicate the direction and goals to our employees, dealers, suppliers and stockholders, it will become very clear that Caterpillar will be intensely focused on helping our customers succeed,” Oberhelman said. “We’ll be driving execution in key areas of the business that are critical to customers - quality, production capability and cost.”
Caterpillar is focused on delivering total shareholder returns over the business cycle in the top 25 percent of the S&P 500. “To do that, I believe we need to deliver compound annual earnings per share growth of 15 to 20 percent over the business cycle. Last year we introduced a 2012 goal of achieving $8 to $10 profit per share, and that’s still our goal for 2012. That level of performance in 2012 is squarely on the path to delivering the growth that should place us in the top quartile of the S&P 500,” Oberhelman said.
Rail is still a small part of the overall portfolio for Caterpillar, which posted 2009 sales and revenues of $32.396 billion. Company executives will meet with analysts in New York later this summer to discuss the 2020 vision and I’m anxious to hear how big a role the company expects rail to play in its worldwide growth strategy.
—By Kathy Keeney
Kathy Keeney is Publisher of the Rail Group at UBM Global Trade. The granddaughter of a railroader, she has been writing about railroads for 25 years. She is immediate past president of The League of Railway Industry Women, and served on the board of directors for the American Short Line and Regional Railroad Association.
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