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U.S. Transportation Secretary Anthony Foxx recently announced that Sarah Feinberg, U.S. Department of Transportation (DOT) chief of staff, will serve as acting administrator of the Federal Railroad Administration (FRA), becoming the second woman to lead the agency since it was founded in 1966.
Feinberg succeeds Joseph C. Szabo, who was appointed FRA administrator in 2009 and recently stepped down from his position.
“Sarah has been my partner and served as my closest advisor during her tenure as Chief of Staff at the U.S. DOT. With her ability to bring clarity, focus and direction to complex challenges, she has become a proven leader within our agency,” said Secretary Foxx. “Sarah has the right mix of experience and skills to adeptly lead the FRA as it continues its important work to ensure the safe, reliable and efficient movement of people and goods.”
As U.S. DOT chief of staff, a position she has held since 2013, Feinberg worked closely with Secretary Foxx and each agency in the U.S. DOT to ensure they are continuously raising the bar on safety. As FRA acting administrator, she will work to strengthen the culture of safety across the railroad industry.Norfolk
In addition, Feinberg managed the agency’s 10 modal departments and spearheaded the agency’s legislative, policy, and communications efforts. She provided strategic advice and counsel to the Secretary regarding operational and legislative initiatives across all modes of transportation and lead the department’s efforts on its $302 billion surface transportation reauthorization plan, which was sent to the U.S. Congress last year.
The Surface Transportation Board has refused to reconsider its controversial finding that railroad contractor Rail-Term Corp. is a rail carrier within its statutes.
In a decision released Dec. 30, the STB affirmed its finding that Rail-Term’s performance of dispatching services on behalf of several short lines made it a rail carrier subject to the board’s jurisdiction. STB Commissioner Ann Begeman dissented from the majority opinion. “Rail-Term does not meet any of the definitions or associated requirements of a rail carrier. Rail-Term does not hold itself out to the general public as a provider of interstate rail transportation for persons or property. Rail-Term does not have track, locomotives, rail cars or crews, or have access to or operate a railroad line. Rail-Term is not equipped to provide service upon reasonable request. Rail-Term’s clients—the rail carriers—provide interstate rail transportation services, and only they are carriers subject to the board’s jurisdiction.”
She concluded: “the majority materially erred in the prior decision, and does so again here.”
This is considered a pivotal case involving the definition of a railroad contractor, and the STB’s finding could lead to eligibility by Rail-Term’s employees for employee benefits under statutes administered by the Railroad Retirement Board.
At issue is a decision issued Nov. 19, 2013 in Finance Docket 35582 in which the STB ruled on a referral question from the U.S. Court of Appeals for the District of Columbia Circuit asking whether Rail-Term Corp., a contractor that provides dispatching services for short lines, fits its statutory requirements to be considered a rail carrier. The issue stems from the court’s review of decisions of the Railroad Retirement Board (RRB) finding that Rail-Term is a covered employer under rail employee-benefits acts that the RRB administers, entitling its employees to those benefits.
“We find here that, by performing an essential rail function on behalf of several short line railroads, Rail-Term has become a rail carrier under § 10102(5). Although Rail-Term does not directly hold itself out to the public as providing interstate rail transportation services, the dispatching services that it provides under contract with carriers are an essential part of the total rail common carrier services offered by its clients to the public,” the STB said, in that 2013 decision.
On Dec. 13, 2013, Rail-Term filed a petition for reconsideration. A few days later, several rail associations including the Association of American Railroads, the American Short Line and Regional Railroad Association and the National Railroad Construction and Maintenance Association filed petitions to intervene in the case and comment.
The associations voiced concern that the STB’s original ruling runs counter to agency precedent that has found that the performance of dispatching services and other functions would not make an entity a rail carrier. NRC, which represents contractors, vendors and suppliers to freight and passenger railroads, voiced concerns about the precedent and the potential for uncertainty in the marketplace.
“NRC’s members are generally not considered to be rail carriers within the meaning of 49 U.S.C. 10102(5),” NRC said. “The board’s decision raises new uncertainty as to when companies that provide services or products to rail carriers may be “imputed” to be rail carriers for purposes of regulation by the board under the Interstate Commerce Act and the application of other federal law which applies to entities subject to the jurisdiction of the board under the ICA.”
Indiana Rail Road (INRD) Company Founder, President and CEO Thomas G. Hoback will retire, effective June 30, 2015, and be replaced by Peter Mills, whose position will be effective on July 1. Hoback will continue to serve as a director on the railroad’s board while pursuing other business and philanthropic interests.
“After nearly 30 years of concentrated focus on growth, and having reinvested nearly $200 million of our earnings into improvements, INRD is in the best physical condition it has ever been,” said Hoback. “With innovative marketing and customer service, we have grown our business by a compounded rate of more than 12 percent annually, and today we move the equivalent of more than 800,000 truckloads of freight per year.”
The INRD Board of Directors chose Mills as the next President and CEO of the railroad. He has served on the INRD board for 10 years and is currently vice president of finance operations for CSX Transportation, where he has been employed for 26 years. He will resign his position at CSX on June 30.
Mills attended the University of Delaware where he earned bachelors and masters degrees. He has held numerous management and financial leadership positions for CSX, including managing director of investor relations and director of international sales and marketing for Europe. Mills also took a business exchange assignment with British Steel, where he helped the company launch an innovative new product.
“Pete is a natural fit to assume leadership at Indiana Rail Road because he will continue the legacy of entrepreneurial thinking that has made us so successful,” said Hoback. “He will bring a real passion for business development while drawing on his commercial management experience.”
“This is the career opportunity of a lifetime for me to join Indiana Rail Road,” said Mills. “Tom and his team have built a remarkable franchise with which I have been associated for the past 10 years in my role on the board. I am excited about this opportunity and look forward to the future.”
Hoback established the Indianapolis-based regional railroad from an unused branch line and began operations in 1986 with a team of 16 employees. Today’s INRD moves Indiana commerce to and from Asia and points all over North America and employs nearly 200 people.
“The transformation of this company has been truly remarkable, and it’s due to an entrepreneurial spirit and an outstanding group of professionals who are among the best in the business,” stated Hoback.
Hoback gave the “go-ahead” 25 years ago to INRD employees who wanted to operate the Santa Train. Since 1990, more than 100,000 people have visited INRD’s Santa Train and thousands of donated coats, hats and gloves have been distributed to Indiana and Illinois families.
Joseph C. Szabo, who has served as Administrator of the U.S. Department of Transportation’s Federal Railroad Administration (FRA) since 2009, announced he will be leaving the agency in January 2015. He has accepted a position as senior fellow with the Chicago Metropolitan Agency for Planning (CMAP), the official regional planning organization for the northeastern Illinois counties of Cook, DuPage, Kane, Kendall, Lake McHenry and Will.
A fifth-generation railroader, Szabo is the 12th FRA Administrator and the first to have the distinction of coming from the ranks of railroad workers.
At CMAP, Szabo will play a leadership role in major policy-related projects, including infrastructure funding, coordinating with local officials to develop and implement policies, and developing a national transportation policy in cooperation with other major metropolitan regions and national associations.
In a letter to his co-workers and leaders in the rail industry, Szabo said, “As a 38-year veteran of the rail industry – one who worked out in the ranks – the most meaningful improvement to me was the dramatic drop in employee fatalities to a new record low. Over the course of my railroad career, I’ve lost five good friends to on-duty fatalities and, like most rail workers, survived my share of close calls in the workplace. In 2008, the year before I came to FRA, 26 rail workers perished in on-duty fatalities – a rate of more than two a month.”
He continued, “Through your good work, we drove that down to a record low number of 14 employee fatalities in 2013 – still too many, but a remarkable improvement. Now, ten months into 2014, we are at 5 fatalities for the year and getting so close to the ultimate goal of zero. I’m counting on the practices we’ve put into place, particularly proactive programs like Confidential Close Calls Reporting, to get us to zero in 2015. And I’ll be watching closely from the sidelines.”
The American Short Line and Regional Railroad Association praised the FRA administrator, saying his “support of the ASLRRA’s Safety Institute initiative has been unwavering and has set the groundwork for helping ASLRRA to establish improved safety processes and procedures on America’s short line and regional railroad operations.”
“We wish Joe well in his move back to Chicago and look forward to continuing to work with him in his new capacity,” the association said.
Seasoned railroad executive JR Sampson has been chosen to serve as coordinator to help launch the Short Line Safety Institute.
Sampson, former vice president of safety and rules at short line operator OmniTRAX, will serve a key role in the pilot project, which is the first step in establishing the institute, made possible by an initial grant from the Federal Railroad Administration.
Sampson will head up an initial assignment in coordination with the American Short Line and Regional Railroad Association, the FRA, the University of Connecticut and the Volpe National Transportation Systems Center, resulting in both the creation of a training module and selection and training of safety assessment professionals for the pilot project. ASLRRA noted that this is a critical step toward the longer-range goal of developing a comprehensive industry-wide safety culture and safety compliance assessment program that will serve as the core of the Short Line Safety Institute.
The Safety Institute is an outgrowth of an ASLRRA proposal to U.S. Transportation Secretary Anthony Foxx in January 2014 as a step toward improving safety for crude oil shipments by rail.
“The Safety Institute is a top line priority for ASLRRA and reflects the short line industry’s dedication and leadership on an issue of critical importance to communities, shippers and railroads,” said ASLRRA Chairman Ed McKechnie. “We look forward to working with JR on this critical initial assignment.”
The ASLRRA is a D.C.-based trade association representing more than 1,000 short line and regional railroad and associate members in legislative and regulatory matters.
The Surface Transportation Board has extended TTX Co.’s flatcar pooling authorization for another 15 years.
TTX filed for reauthorization with the STB on Jan. 16 in Finance Docket No. 27590 (Sub-No. 4). The Chicago-based company said that the railroad participants in TTX’s flatcar pool agreed to extend the TTX flatcar pooling agreement for another 15 years and by its application, TTX and its railroad participants sought STB approval of an amended pooling agreement and related car contracts between TTX and its participating railroads.
The railroads that participate in TTX’s flatcar pool include BNSF Railway Company; Canadian National Railway Company, through its U.S. affiliates Illinois Central Railroad Company and Grand Trunk Western Railroad Company; Canadian Pacific Railway through its U.S. affiliate Soo Line Railroad Company; CSX Transportation, Inc.; Ferromex; Kansas City Southern Railway Company; Norfolk Southern; Pan Am Railways, and Union Pacific Railroad.
The former Interstate Commerce Commission approved TTX’s original flatcar pool in 1974, and the ICC and the STB extended TTX’s pooling authority in 1989, 1994, and, most recently, in 2004 for a 10-year period that expired in 2014.
In its decision, which took effect Oct. 1, the STB noted that more than 80 interested parties, including the Defense Department, shippers, ports, car parts suppliers, car manufacturers, and others, submitted written comments in support of continuing the TTX flatcar pool for another 15 years.
“On the record before us, TTX has shown that the pooling of flatcars promotes research and development of new and innovative equipment, permits standardized fleet repair and maintenance to reduce costs for the participating railroads, allows the participating railroads to spread the risk of investment in equipment, enables the participating railroads collectively to respond effectively and efficiently to the dynamics of the North American railroad network, and produces substantial capital savings by maximizing the efficient use and distribution of pooled equipment,” the agency said. “That record reflects and the industry’s many years of experience with the pool confirms that the full array of benefits achieved through flatcar pooling cannot readily be achieved through any other means. The benefits of pooling also clearly outweigh any anti-competitive effects that may flow from the arrangement. Based on the record, the Board believes that such anticompetitive effects (to the extent they exist) are likely to be minimal. We are aware of no alternative mechanism that would entail less restraint on competition while achieving benefits similar to those generated by the pooling agreement.”
The STB directed TTX and the participating railroads to continue discussions with the U.S. Army’s Military Surface Deployment and Distribution Command about mechanisms that might address the military’s need for an adequate and efficient supply of chain tie-down flatcars. It ordered TTX to file a status report by Oct. 1, 2015 on its discussions.
“We are mindful of SDDC’s lingering concern about the availability of chain tie-down flatcars and the military’s ability to access an adequate supply of such flatcars in times of national defense need. While we do not specifically condition the Board’s approval on TTX’s implementation of any particular mitigation measures, we direct TTX and the participating railroads to continue discussions with SDDC regarding mechanisms that might alleviate the issues it has identified,” the STB said.
Freight railroads and shippers, not surprisingly, have opposite views on new legislation in the Senate dealing with the Surface Transportation Board.
The Association of American Railroads (AAR) is concerned that the Surface Transportation Board (STB) Reauthorization Bill (S.2777) will harm the railroads’ ability to move what the economy demands and deliver the service shippers expect. The AAR also believes that the proposed legislation, if allowed to proceed in its current form, would have a negative effect on the industry’s continued reinvestment of record amounts of private capital into the freight rail system and on future hiring. The Senate Commerce Committee held a mark-up and passed the bill on Sept. 17.
AAR President Edward R. Hamberger said railroads have several serious concerns with the bill, beginning with the legislation directing the STB to pursue regulations that could cap rates and require railroads to turn over traffic to competitors. “The rail industry believes this legislation will harm the ability of the nation’s railroads to invest in the network and improve service for our shippers,” he said, noting that railroads are moving the most freight in the last seven years and that some commodities are up double digits over last year. “These new restrictive regulations would be imposed on the nation’s railroads at a time when investments in capacity, new equipment and new hires are needed.”
According to the AAR, several other sections of the STB reauthorization bill could also harm the rail industry. These include directing the STB to prevent railroads from using the common approach of railroads and shippers alike in contract negotiations to “bundle” offers, but allowing shippers to continue to do so. The AAR says the STB has no authority over rail contracts and should not be directed to interfere in agreements that are arms-length transactions freely entered into by both parties. The AAR also believes that the STB already has broad regulatory oversight over the railroads. The legislation, however, would give the STB expanded authority to launch investigations of a railroad even where no complaint against the railroad has been lodged.
“On the one hand, everyone wants to see capacity grow and traffic flow unimpeded, and on the other hand there are those that want to undercut our very ability to get the capital necessary to invest,” stated Hamberger. “This is a perfect example of you simply can’t have it both ways. America’s rail industry is urging policymakers not to rush this legislation and instead give all stakeholders the opportunity to have a more productive conversation to try to find common ground.”
The National Industrial Transportation League, speaking on behalf of its shipper membership, has announced its strong support of the Senate legislation, which was introduced last week by Senators Jay Rockefeller (D-WV) and John Thune (R-SD).
“League members are gratified that Chairman Rockefeller and Ranking Member Thune have introduced an exceptionally well-crafted bill which, if enacted, will improve the operation and effectiveness of the Surface Transportation Board,” said League President and CEO Bruce Carlton. “Insuring that the STB has the resources it needs to carry out its statutory mandates is important to our members and rail shippers generally.”
“Senators Rockefeller and Thune have demonstrated the importance of a well-functioning STB by proposing legislation that will expand Board membership and its authority to help ensure that our nation’s rail system operates effectively and efficiently for the benefit of both railroads and shippers,” continued Carlton. “This bill is a shining example of effective and appropriate Congressional oversight to give this important federal agency needed new tools and direction.”
The bill calls for the addition of two new members to the Board and also encourages the STB to move forward in a timely manner on the League’s proposed competitive switching rulemaking to improve the state of competition for so-called captive shippers. “By bringing this bipartisan proposal forward now the Commerce Committee’s leadership has demonstrated a unity of purpose which we admire. Moreover, they have managed to draft a bill that does not reregulate the rail industry but appropriately requires the STB to achieve more balance in its policies and determine the necessary degree of economic regulation for the freight rail industry. They certainly have the League’s support and respect for a job well done,” concluded Carlton.
Sen. John D. (Jay) Rockefeller, IV, chairman of the Senate Committee on Commerce, Science, and Transportation, announced a full committee hearing for Sept. 10 titled, “Freight Rail Service: Improving the Performance of America’s Rail System.” The hearing will focus on rail service issues throughout the country, including congestion and locomotive and railcar shortages. Stakeholders will discuss the impact of rail service issues on various industries and the economy. That hearing will be webcast live via the Senate Commerce Committee website.
The STB, meanwhile, will hold a field hearing on Sept. 4 in Fargo, N.D., to hear reports from shippers and others on service issues on the U.S. rail network and to hear from rail industry executives on their efforts to address service problems. The hearing is expected to discuss and examine further steps to improve service. A live video broadcast will be available from the STB’s website.
Representatives from BNSF Railway, Canadian Pacific, Genesee & Wyoming, Inc., Amtrak, National Coal Transportation Association, Western Coal Traffic League, Alliance for Rail Competition, American Soybean Association, and the North Dakota Grain Growers Association are among those expected to appear at the hearing.
North Dakota Gov. Jack Dalrymple, U.S. Senators John Hoeven and Heidi Heitkamp and Rep. Kevin Cramer are also expected to testify.
U.S. Sen. John Thune (R-S.D.), ranking member of the Senate Commerce Committee, said his panel’s hearing will examine the rail service backlogs in South Dakota and throughout the region that have led to service disruptions for South Dakota farmers, ethanol producers, utilities, and other businesses. “With the backlog in rail service and grain bins reaching capacity, South Dakota producers have limited storage options for both last year’s and this year’s expected record-breaking harvest,” said Thune. “I will continue working with Chairman Rockefeller and the Surface Transportation Board (STB) to seek commitments from the railroads to address the backlog of grain orders to minimize the harm that South Dakota producers face in getting their crops to market. I look forward to the committee’s upcoming hearing and hope it will better highlight for committee members and the general public the scale and scope of the challenges that shippers are facing across the country.”
Linda Bauer Darr, a Washington veteran with transportation association expertise, has been selected as the next president of the American Short Line and Regional Railroad Association.
Darr, who is president and CEO of the American Moving and Storage Association, will succeed Rich Timmons, who is retiring at the end of this year after leading the association since 2002. Timmons assumed the helm of ASLRRA following an executive post at Norfolk Southern and a distinguished career in the Army where he attained the rank of lieutenant general.
Darr has been at AMSA since 2007 and has many years of experience in transportation policy, association management and government relations. Her experience includes senior posts with the American Trucking Associations and the American Bus Association, as well as serving during the Clinton Administration at the U.S. Department of Transportation. As Deputy Assistant Secretary for Budget and Programs, she interacted regularly with senior officials in the administration and at the White House and with members of Congress and their staffs on a wide range of transportation policy issues.
She serves on the board of the American Highway Users Alliance, the Eno Transportation Foundation’s Advisory Board, the Industry Advisory Panel of the Employee Relocation Council, and was appointed to the U.S. Chamber of Commerce’s Committee of 100 Top Association Executives. She holds a bachelor’s of science degree from the University of Maryland and has done post-graduate work at the University of Virginia and the Harvard Kennedy School of Government.
Darr joins a railroad association that has greatly expanded both its membership and scope of work on behalf of its members during Timmons’ tenure. She will step into a high-profile role as the voice of the nation’s 550 short line and regional railroads, which operate over 50,000 miles of track. She will represent the interests of these railroads before Congress, federal, and state regulatory agencies and on policy and technical committees of the U.S. railroad industry. On the legislative front, she will work on several of ASLRRA’s key issues, which include opposing legislative efforts that could harm the railroad industry’s current economic and antitrust regulatory environment, urging Congress to extend the short line infrastructure tax credit, and battling efforts to increase truck size and weight allowances.
“ASLRRA undertook a nearly year-long search for its new President and we believe we have concluded that search with an outstanding selection,” said ASLRRA Chairman Ed McKechnie. “Ms. Darr has significant experience in leading trade associations and has spent almost her entire career in the transportation industry. Her government service was at a very senior level in the agency that has direct budget and programmatic oversight over the Federal Railroad Administration, the federal agency with the most interaction with the railroad industry.”
Timmons is concluding his 12th year as ASLRRA’s president. “Rich transformed our Association,” said McKechnie, executive vice president and chief commercial officer for Watco Companies. “He made us a stronger, more effective and more member-focused organization and we are sincerely grateful for the energy and enthusiasm he gave us during his tenure. In Linda Darr we look to taking our Association to an even higher level of effectiveness as we address the challenges of improving safety, building on our legislative successes and enhancing the short line railroad brand.”
Association of American Railroads President Ed Hamberger applauded the choice. “I have known and worked with Linda over many years,” said Hamberger. “She is a smart, energetic leader with a wealth of experience in the transportation industry. I look forward to maintaining the strong partnership we have enjoyed with ASLRRA under Rich Timmons’ leadership.”
U.S. Transportation Secretary Anthony Foxx joined local, state and regional representatives to celebrate the opening of the 11.7-mile Silver Line extension, the first phase of the planned 23.1-mile extension of Washington, D.C.’s Metrorail service to Dulles International Airport and Loudoun County, Virginia. The new line, the largest expansion of Metrorail service in 20 years, connects the nation’s capital to the Virginia areas of Tysons Corner and Reston.
“The Obama Administration is proud to be a partner in delivering more world class transportation options to the Washington Metropolitan area and connecting thousands of residents and visitors with major employment, education and economic opportunities throughout the region,” said Secretary Foxx. “The Silver Line is an excellent example of why Congress should pass the President’s GROW AMERICA Act so we can meet the rising demand for more and better transportation choices by supporting projects like this across the country.”
The first phase includes five new stations, a 2,300-car commuter parking garage, the purchase of 64 rail cars, and expanded capacity at the West Falls Church rail yard. The new line is expected to serve approximately 85,700 daily riders by 2030.
Federal Transit Administration (FTA) Deputy Administrator Therese McMillan, who also attended the opening, said that with population growth expected to continue over the next two decades, the Silver Line is an excellent investment in the area’s transportation future. “This project will expand capacity for one of our nation’s largest transit agencies, accommodate thousands of additional riders for years to come, and offer a much-needed alternative to traffic congestion in Northern Virginia,” said McMillan.
The U.S. Department of Transportation is providing $900 million in FTA Capital Investment Grant (New Starts) Funding and $75 million in other DOT funds toward the $3.14 billion total project cost of the first phase of the Silver Line extension. The remaining cost is being covered by state and local funding sources.
In addition, DOT has approved a $1.87 billion Transportation Infrastructure Finance and Innovation Act (TIFIA) loan for construction of the second phase of the Silver Line extension to Loudoun County—the largest TIFIA loan in the program’s history.
The Silver Line is being constructed by the Metropolitan Washington Airports Authority (MWAA) and operated by the Washington Metropolitan Area Transit Authority (WMATA).
“The Silver Line will be a dynamic economic boost to the region,” said Virginia Governor Terry McAuliffe, who also attended the opening. “It will reduce congestion, create new jobs and begin to unlock Dulles Airport, one of Virginia’s most important economic assets. I am honored to have worked along so many leaders to help bring Phase 1 of this transformational project to fruition.”
Metrorail, the nation’s second busiest rapid transit system, grew 10 percent larger with the five new stations and new direct rail service between the Washington region’s two largest employment centers, as a result of the opening of the Silver Line’s first phase. The new rail line is the largest expansion of Metrorail — and the first time a new color has been added to the Metro map — since the Green Line opened in 1991.
With the opening of the Silver Line, Metrorail now serves a total of 91 stations on a 118-mile system in Virginia, Maryland, and the District of Columbia.