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Archive for February 13th, 2013

CSX Taps Avtec to Outfit Dispatching Centers

February 13th, 2013

Avtec, Inc., announced today that it has entered into a contract with CSX.

Under the multi-year contract, all of the Class I railroad’s main-line dispatching centers will migrate to Avtec’s Scout pure-IP radio console with enterprise management capabilities, the Gilbert, S.C.-based firm said. As a result of the project, CSX will end up with hundreds of console positions controlling more than 1,000 RoIP (Radio over Internet Protocol) radio base stations in 23 states, Washington, D.C., and the Canadian provinces of Ontario and Quebec.

Specific terms of the contract were not disclosed.

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Miller Felpax Announces Expansion

February 13th, 2013

Rail supplier Miller Felpax Corp. is investing for growth.

The Winona, Minn.-based company will be adding additional offices, warehousing, and training and “innovation lab” spaces, resulting in a 20% expansion of its facilities there. New positions may be added as well, but that has yet to be determined.

Steady growth throughout the past decade and expectations of significant increases in business going forward are prompting the expansion project, which began about a week ago.

“This investment in infrastructure reflects our confidence that we can keep growing by continuing to offer new products to the railroad industry,” said Steve Blue, Miller Felpax president and CEO, in a written statement.

He added, “This additional infrastructure will support employee efforts to drive sales of current products and invent new solutions to pressing railroad industry needs. That’s not merely a strategy statement but it is what drives everyone here. We are focused on a single goal: net operating profit. We’re giving them more tools to do just that.”

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Canadian National Halts Preparations for Proposed Iron Ore Rail Line

February 13th, 2013

Canadian National Railway has suspended the feasibility study for the construction of its proposed rail line and terminal handling facility to serve the Quebec/Labrador iron ore range.

The feasibility study was initiated in August 2012 by CN and its partner La Caisse de depot et placement du Quebec, along with six mining companies.

“Current market realities” have resulted in anticipated delays with mine development projects in and around the Labrador Trough, CN said in its release. A joint review of the project together with the mining companies indicates that mine construction schedules and diverging needs for each project will make it difficult to obtain the critical volume of iron ore necessary to support the building of new rail and terminal infrastructure by CN.

The decision by some miners in the region not to join the group of mining companies supporting the CN infrastructure project was also a factor in the lower-than-anticipated iron ore volume.

“We have invested considerable effort and resources towards the feasibility study, but in light of the circumstances, CN has concluded that it is not advisable to continue with the feasibility study at this time,” said Luc Jobin, executive vice president and CFO of CN, in a written statement.

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Genesee & Wyoming’s Profit Hit by RailAmerica Acquisition Charges

February 13th, 2013

Genesee & Wyoming reported net income in the fourth quarter of 2012 was $13.4 million, dropping 60% from $33.3 million in the fourth quarter of 2011.

However, the earnings were impacted by GWI’s acquisition of RailAmerica. Fourth quarter earnings included after-tax charges of $30.7 million associated with the transaction, financing and integration-related expenses.

GWI’s quarterly operating ratio was 85.2%, compared with 78.4% in the fourth quarter of 2011. The company said its consolidated adjusted operating ratio in the fourth quarter of 2012 was 74.6%, compared with 78.6% in the same quarter in the previous year.

Quarterly operating revenue was $227.3 million, up 8% from $210.4 million in the same quarter in the previous year. Railroad freight revenue was $163.1 million, compared with $148.8 million in the fourth quarter of 2011.

“G&W’s financial results for the fourth quarter of 2012 were consistent with our expectations. Our fourth quarter revenues increased 8%, our adjusted operating income increased 28% and our adjusted operating ratio improved 4.0 percentage points to 74.6%,” said Jack Hellmann, GWI’s president and CEO, in a written statement. “In Australia, where our grain traffic was unusually low due to now-fixed mechanical issues in the Adelaide Outer Harbor, we nevertheless reported an adjusted operating ratio of 70.0% due to the smooth start-up of iron ore shipments from a new mine. Meanwhile, RailAmerica’s fourth quarter financial results were solid while it was held in a voting trust, contributing adjusted equity earnings of $19.1 million.”

For the full year of 2012, profit was $52.4 million, falling from $119.5 million in 2011. Annual operating revenue rose 5% from $829.1 million in 2011 to $874.9 million in 2012.

“The integration of RailAmerica is well underway, with new regional management teams largely established, overlapping functions being rationalized and best practices being established in each department,” Hellmann said. “We are optimistic that we will complete the vast majority of the integration work by the end of the second quarter of 2013.”

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