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Siemens to Electrify Ecuador Metro Line 1

October 26th, 2016

The Acciona-Odebrecht construction consortium has chosen Siemens to electrify the Metro Line 1 in Ecuador’s capital of Quito, one of the highest metro systems worldwide. Line 1 will provide direct routes from north (El Labrador) and south (Quitumbe) of the city into the downtown area and historical city center. The line is scheduled to begin passenger service in summer 2019.

The city’s first metro line will run over 20 kilometers through the capital of Ecuador and operate at an elevation of more than 2,800 meters above sea level. Siemens will be responsible for the complete electrification of the new double-track Metro Line 1 that will connect the northern and southern parts of the city with 15 stations.

The scope of the project includes approximately 46 kilometer of rigid catenary, 6 kilometer of flexible catenary, 11 traction power supply stations, 29 auxiliary power supply stations, and the Supervisory Control and Data Acquisition (SCADA) system for monitoring and controlling the traction power supply.

The new rail system is expected to transport more than 350,000 passengers a day when completed. The mass transit system is expected to reduce CO2 emissions in the city by up to 30,000 tons a year.

Hitachi Delivers New Railcars to Miami-Dade County

October 26th, 2016
Hitachi Rail Italy presents new railcar for Miami-Dade County. Photo: courtesy of  Hitachi Rail Italy.

Hitachi Rail Italy presents new railcar for Miami-Dade County. Photo: courtesy of Hitachi Rail Italy.

In a ceremony at the Hitachi Rail Italy factory in Medley, Fla., attended by Miami Mayor Carlos Gimenez and the Japanese Consul General Ken Okaniwa, Hitachi Rail Italy presented the first new Metro vehicle for Miami-Dade County. The ceremony saw the unveiling of the first two cars of train number 1 (out of 68 trains in total) that Hitachi Rail Italy is manufacturing for the City in Florida.

“Fully respecting the contractual deadline, we have delivered a product which we particularly care for, and not only for commercial reasons.” said Maurizio Manfellotto, CEO of Hitachi Rail Italy. “The award of this contract marked the return of Hitachi Rail Italy to the United States after about ten years of absence from the heavy rail market. Therefore it is highly symbolic and encouraging for all of us.”

The contract with Miami-Dade Metro is worth approximately $300 million. The contract is for a total of 68 trains, including136 cars. Each vehicle is 45.8 m long, 3.11 m wide and can reach a max speed of 75 km/h. The carbody structure is stainless steel, and the interior fittings are light alloy with integrated lighting and solutions of modular assembly.

“We are focusing on the American market– because we can offer a range of products, from driverless metros to traditional metros, with a variety of innovative solutions to meet the requirements of customers,” said Andrea Pepi, head of Hitachi Rail Italy strategies and sales division.

G&W Australia to Acquire Glencore Rail

October 26th, 2016

Genesee & Wyoming Inc.’s (G&W) subsidiary Genesee & Wyoming Australia (GWA) has entered into agreements to acquire Glencore Rail (GRail) for $1.14 billion (Australian) and concurrently issue a 49 percent equity stake in GWA to funds managed by Macquarie Infrastructure and Real Assets (MIRA). The agreement will create a GWA partnership with MIRA. The transaction is expected to close on December 1, 2016, subject to Australian Foreign Investment Review Board approval.

“The acquisition of Glencore Rail solidifies GWA’s position as the most efficient rail operator with the highest service quality in the Australian rail market,” said Jack Hellmann, G&W president and CEO. “Through the acquisition and 49 percent new equity issued to MIRA, we are effectively doubling the size of GWA and retaining 51 percent of a business with stronger long-term free cash flow and a significant portion of GWA’s rail shipments under long-term, take-or-pay contracts.”

“We are pleased to be partnering with G&W, a leading global rail operator in their Australian business,” stated Frank Kwok, Asia-Pacific co-head of MIRA. “GWA is a strong business that owns and operates essential rail infrastructure supporting industries primarily operating in regional Australia. For MIRA, this agreement expands our infrastructure footprint in Australia and allows us to contribute our international experience investing and managing transport and transport services assets.”

The acquisition will strengthen GWA’s footprint in Australia by adding a significant presence in the Hunter Valley coal supply chain in New South Wales, and it will complement GWA’s existing intermodal, agricultural and mining business in South Australia and the Northern Territory.

GRail’s coal haulage business is an alternative rail service provider to the incumbent railroads in the Hunter Valley in Australia. G&W’s Freightliner Australia subsidiary is the rail operator of GRail and will continue these services following the GRail transaction.

GATX Net Income Increases in Third Quarter

October 26th, 2016

GATX Corporation has reported a net income of $95.7 million, or $2.36 per diluted share, for the 2016 third quarter compared to last year’s third quarter net income of $39.5 million, or $.91 per diluted share. Net income for 2016 year-to-date was $226.2 million or $5.49 per diluted share, compared to the same time period in 2015 with $147.1 million or $3.33 per diluted share. The 2016 third quarter results include a $49.1 million pre-tax residual sharing fee settlement from the Portfolio Management segment, or $0.75 per diluted share and $0.74 per diluted share year-to-date.

“Market dynamics in the North American rail industry are similar to recent quarters,” said GATX President and CEO Brian A. Kenney. “A growing oversupply of railcars, fewer railcar loadings, and improved railroad velocity continue to present significant challenges.”

“Railcar lessors are aggressively attempting to place new deliveries and their existing idle railcars, resulting in declining lease rates,” continued Kenney. “In the third quarter, the renewal lease rate change of GATX’s Lease Price Index decreased by 21.4 percent, the average renewal term was 29 months, and our renewal success rate was 74.1 percent.”

The Rail North America segment of GATX reported a profit of $87.9 million for the 2016 third quarter, compared to $90 million in last year’s third quarter. Lower segment profit was a result of lower revenues, partially offset by lower maintenance expenses.

Rail North America’s wholly owned fleet was approximately 123,000 cars as of September 30, 2016, including approximately 18,100 boxcars. Excluding the boxcar fleet, fleet utilization was 99 percent at the end of the third quarter, compared to 99.2 percent at the end of the 2015 third quarter.

“Despite the difficult market conditions, Rail North America is performing well,” said Kenney. “Our fleet utilization increased to 99.0 percent in the quarter; we further optimized our fleet by selling railcars in the secondary market at attractive prices, and we are successfully placing future years’ railcar deliveries from our committed purchase agreement. This continued success is a direct result of GATX’s well-diversified fleet, high-quality customer base, and outstanding service.”

Rail International’s third quarter segment profit was $23.3 million, compared to $15.5 million in the 2015 third quarter.

“Our strategy in this market is to aggressively protect fleet utilization, reduce the length of lease term as rates decline, continue to improve efficiency within our maintenance network, tightly control SG&A, and capitalize on attractive growth opportunities as asset prices fall,” concluded Kenney. “Based on year-to-date performance, we are maintaining our 2016 full-year earnings guidance of$5.55-$5.75 per diluted share. This guidance excludes the $0.74 per share contribution from the Portfolio Management fee noted above.”

BNSF Names BJRY its Shortline of the Year

October 25th, 2016
BJRY named BNSF Shortline of the Year. Photo: courtesy of BNSF.

BNSF Names BJRY its Shortline of the Year. Photo: courtesy of BNSF.

At its annual Shortline Conference, BNSF Railway Company (BNSF) named Burlington Junction Railway (BJRY) its 2016 Shortline of the Year in recognition of its dedication to promoting safety initiatives, customer relationships and growth opportunities. BJRY has not had a single FRA reportable injury since its formation in 1985.

“As a company who prioritizes safety, we wanted to recognize a fellow railroad who exemplifies what it means to be safe,” stated Merril Lieb, assistant vice president, BNSF shortline development.

BJRY is headquartered in Burlington, Iowa, and operates out of eight different locations throughout Illinois, Iowa and Missouri. The railway moves approximately 15,000 carloads annually, shipping commodities such as frac sand, lumber, tallow, resin and frozen foods.

“Our success is due to us having the best employees of any operation,” said BJRY General Manager Bob Wingate. “Customers constantly report that our employees genuinely care about their problems and concerns. This award is a credit to them and their dedication to our railroad.”

In 2015, the shortline moved 100 frac sand unit trains and built a new 2,000 foot stretch of interchange track in Quincy, Ill. BJRY volumes grew eight percent in 2015, despite the current difficulties in a soft freight rail market.

OmniTRAX Logistics to Acquire Frac Sand Company Assets

October 25th, 2016

OmniTRAX, Inc.’s transloading, terminal and logistics affiliate, OmniTRAX Logistics Services, LLC (OLS), has agreed to acquire all assets of Terracor Group, a frac sand logistics company. Terracor Group is part of Sanjel Corporation, a Canadian company that filed for Chapter 15 bankruptcy protection in the United States earlier this year.

The assets include three transload facilities with vertical silo storage in Texas and Montana and a high quality frac sand mining opportunity located in Wisconsin.

“We know the frac sand industry very well, so this acquisition is a terrific opportunity for us to expand the operations of OLS and increase the touchpoints we have with customers,” said OmniTRAX CEO Kevin Shuba. “There is also great potential to expand beyond sand into other commodities.”

The new facilities serve energy customers in the Bakken, Eagle Ford and Permian basins. The acquisition broadens the OLS reach in the frac sand supply chain and allows OLS to manage the movement of sand and other commodities from the source through the point of distribution.

UP Reports Third Quarter 2016 Results

October 25th, 2016

Union Pacific (UP) has reported its 2016 third quarter financial results with net income of $1.1 billion, or $1.36 per diluted share, compared to the 2015 third quarter’s $1.3 billion net income, or $1.50 per diluted share.

In the 2016 third quarter, business volumes, measured by total revenue carloads, dropped by 6 percent from the same quarter last year. Agricultural products grew by 11 percent while declines were seen in coal, intermodal, industrial products, chemicals, and automotive.

“Continued momentum from our productivity initiatives, as well as positive core pricing, helped partially offset the decline in total carload volumes,” said UP Chairman, President and CEO Lance Fritz. “While many of the same volume challenges have continued throughout the year, we are keeping a laser focus on our six value tracks. This strategy ensures we provide our customers with an excellent value proposition and service experience, while efficiently and safely managing our resources.”

Operating revenue declined by 7 percent to $5.2 billion compared to last year’s third quarter. The company’s operating ratio of 62.1 percent was unfavorable by 1.8 points compared to the record third quarter 2015, but improved 3.1 points sequentially. Operating income was down by 11 percent to $2 billion.

Freight revenues decreased 7 percent, with volume declines and lower fuel surcharge revenue more than offsetting core pricing gains.

“The macroeconomic environment still has its challenges – an unstable global economy, the relatively strong U.S. dollar, and continued soft demand for consumer goods,” continued Fritz. “However, certain segments of the economy, such as grain and energy, are showing signs of life.”

“Closing out 2016 and heading into next year, we are optimistic about the opportunities that lie ahead,” Fritz added. “In the coming months we will continue to do what Union Pacific does best – operate a safe, efficient, and productive network while providing an excellent customer experience and delivering solid shareholder returns.”

Jeswant Gill to Lead Harsco Rail

October 25th, 2016
Jeswant Gill

Jeswant Gill

Harsco Corporation has appointed Jeswant Gill president of its worldwide Harsco Rail business, effective November 1, 2016. Gill has 30 years of global leadership experience in major multinational manufacturing and technology firms. He will be based at Harsco Rail’s division headquarters in Columbia, S.C.

Since 2015, he has been serving as managing director of Arcadia Group International’s global solutions group, providing business advisory and strategic planning services to multinational clients. Prior to that, he was executive vice president at Kennametal’s $1.3 billion industrial segment, where he delivered strong revenue growth and margin expansion in emerging markets.

Gill was also employed by Ingersoll Rand, where served as vice president of global services for the industrial technologies sector, successfully developing and launching offerings to address the equipment/systems life cycle needs of customers, and as president of the company’s technologies business in the Asia-Pacific region. In addition, he has held leadership positions in Asia and North America with Invensys PLC and Johnson Controls Inc.

Gill earned a Bachelor of Science in Engineering Physics and Master of Business Administration at Queen’s University in Kingston, Ontario.

“Jeswant is an inclusive, collaborative leader who has built and led high-performance global teams and driven significant business growth across the Americas, Europe and Asia,” said Harsco President and CEO Nick Grasberger. “His leadership accomplishments fit perfectly with our aspirations for the Harsco Rail business.”

Harsco Rail is delivers railway track maintenance and construction to more than 125 major railway customers throughout the world. It operates from nine main locations in the United States, United Kingdom, Germany, India, Brazil, China and Australia.

LA Metro Lowers TBM for Regional Connector

October 24th, 2016

Los Angeles County Metropolitan Transportation Authority (Metro) was joined by elected officials and community stakeholders in Little Tokyo to celebrate the naming and lowering of a segment of the tunnel boring machine (TBM) for excavating twin 1.1-mile underground rail tunnels for the Regional Connector project. The work on the tunnels under downtown Los Angeles will begin in January.

The $1.55-billion Regional Connector Transit Project is a 1.9-mile underground light-rail tunnel that will connect the Blue, Expo and Gold Lines in downtown Los Angeles. It will include three new stations and is expected to serve 88,000 riders daily. Regional Connector Constructors, a joint venture between Skanska USA Civil West California District, Inc., and Traylor Brothers, Inc., is designing and building the Regional Connector Transit Project. Construction is expected to be complete in 2021.

“This is a major milestone toward the completion of a vital project that truly connects the region by providing a one-seat ride to downtown Los Angeles for users of the Blue, Gold and Expo lines,” said Metro Board Chair and Duarte City Council Member John Fasana. “The Regional Connector will reduce travel times for many Metro Rail riders and make our system much more convenient and attractive to those who want a transit alternative to driving.”

The TBM, which weighs approximately 1,000 tons, is 450 feet long and is 21.5 feet in diameter, was manufactured in Germany by Herrenknecht AG. It will advance about 60 feet per day once digging begins and will take 16 to 18 months to excavate the twin 1.1-mile tunnels.

At the event, Fasana awarded TAP Cards to students who won contests to name the TBM and create an illustration for its tail shield. The winning name, Angeli, was submitted by 8th grade student Windsor McInerny, and the winning illustration was submitted by Alexander Li, a senior at Adolfo Camarillo High School in Ventura County. Naming of the TBM is a mining tradition that dates back to the 14th century.

“The regional connector is a huge step toward our overarching transportation goal for Los Angeles County,” remarked Fasana. “By tying together all of our lines to create a truly interconnected system, residents and tourists alike can easily and quickly get from Claremont to LAX, Torrance to Chatsworth, and everywhere in between. Angeli’s work in Downtown will ease congestion and streamline trips for commuters across the region.”

Angeli will begin boring from the northeast corner of 1st and Alameda Streets for the northbound tracks until it reaches 4th and Flower Streets. The TBM will then be retrieved from underground and returned to Little Tokyo, where it will be re-launched to excavate the southbound tunnel.

Metro CEO Phillip A. Washington said, “The Regional Connector is a game changer for the entire region by connecting three light rail lines that already have more than 170,000 weekday boardings. Measure R played a pivotal role in funding this project and helped us secure a federal grant and loan to build the infrastructure that will be enjoyed by generations to come.”

STB Posts Internal Rate Case Assessment

October 24th, 2016

The Surface Transportation Board (STB) has posted a June 2015 report on improving the Board’s internal rate case processing. The agency also expects to release stand-alone cost (SAC) processing guidelines in the near term that implement many of the June 2015 report’s recommendations.

The goal of the June 2015 report and the forthcoming guidelines is to ensure that the Board continues to produce quality rate decisions in a timely fashion.

“I am pleased that we are able to share this report with our stakeholders,” stated STB Chairman Daniel Elliott. “Although our rate decisions have been well-reasoned and fully defensible, I am committed to further improving the Board’s ability to deliver rate case decisions in an efficient manner. The June 2015 report and the forthcoming processing guidelines are one part of a larger effort to meet the challenge of complex cases and provide value to the Board’s stakeholders.”

The evaluation of rate reasonableness for rail shippers in adjudications under the Board’s SAC rate reasonableness methodology is one of the STB’s more complex responsibilities. The STB handles these cases using interdisciplinary teams composed of staff from at least three STB offices (the Offices of Economics, Proceedings, and General Counsel). To improve efficiency, Chairman Elliott convened a study team consisting of members of each of these offices, along with resources provided by an outside contractor.

The June 2015 report analyzes the agency’s internal procedures at the time of the study and provides a number of recommendations on how to improve the quality of the Board’s internal processes. The report provides immediate implementation recommendations, near-term recommendations to be considered over 3-12 months, and longer-term recommendations.

“While the agency has treated this report as confidential to date, I have decided to release it in the interest of transparency as the Board continues its evaluation of other SAC-related issues, including the recently released InterVISTAS report and the upcoming economic roundtable and public hearing,” said Chairman Elliott. “I will also post the processing guidelines as soon as they are ready to be issued.”