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Canadian National Picking Up Steam From Canadian Pacific Throwaways

November 26th, 2012

Canadian National Railway is picking up business from markets abandoned by competitor Canadian Pacific Railway, according to CN’s chief marketing officer, Reuters reports.

CN has benefited from CP’s exit from the market in Milwaukee, Wis., and from its service between Vancouver, British Columbia, and Detroit, CN’s Jean-Jacques Ruest said at a Scotiabank transportation conference.

“The thing that they’ve decided to do less of, we still do very well,” Ruest said during a webcast presentation. “So we’ve picked up some business that seems to be no longer attractive to them.”

CN will expand its operations and services in the U.S. to gain intermodal market share, he added. For example, the company plans to open a new U.S. terminal, but it will not name the location until the first quarter in 2013.

The railroad reported good performance in October and decent performance to date in November, but fourth quarter performance will mainly be determined by December results, Ruest said.

CN will issue 2013 forecasts in January, although the company expects growth over the next two years in a range of businesses, including grain, potash, crude-by-rail and intermodal, Ruest added.

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Bombardier Provides Train Control System for Pan European Rail Corridor X in Croatia

November 23rd, 2012

Bombardier Transportation is upgrading a 20-kilometer section of the Pan European Corridor X, in Croatia, with its European Rail Traffic Management System (ERTMS) / European Train Control System (ETCS) technology.

The company’s INTERFLO 250 ERTMS/ETCS Level 1 solution will be installed on the double-track line connecting the stations of Okucani and Novska; the system has already been operating on a 33.5-kilometer section of the same corridor between Vinkovci and Tovarnik. Bombardier is responsible for the design, delivery and commissioning of the signaling system, including the EBI Lock 950 R4 computer-based interlocking (CBI) system and wayside equipment.

“As well as consolidating our ETCS expertise in this new market, this is an important new reference for Bombardier adding to our significant ERTMS portfolio,” said Franco Pietrini, head of Rail Control Solutions Eastern Mediterranean Region, Bombardier Transportation, in a written statement. “As part of the upgrade on a section of a Pan European interoperable corridor, which will enhance travel and transport links across Europe, our technology is also contributing to the development of the national rail network, and we look forward to continuing to work with the Croatian Railways.”

Pan European Corridor X connects Salzburg in Austria with Thessaloniki in Greece via Slovenia, Croatia, Serbia and Macedonia.

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Harkness Adds Treasurer to GATX Roles

November 21st, 2012

GATX Corp. has appointed Eric D. Harkness treasurer, in addition to his roles as vice president and chief risk officer.

“We are pleased to have Eric Harkness leading the treasury department,” said Robert C. Lyons, executive vice president and CFO, in a written statement. “With his extensive background in finance and knowledge of GATX, Eric is a positive addition to our strong treasury team.”

Harkness began his career with GATX in 2007 as a senior investment risk officer, after holding a variety of roles in the financial services industry. He received a B.S. in business from Indiana University and an M.B.A. from The University of Chicago Booth School of Business. Harkness is a certified public accountant, a CFA charterholder, and a member of the Investment Analysts Society of Chicago.

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Strong Rail Tank Car Outlook Projected

November 21st, 2012

Look for 56,000-60,000 new railcars, mostly tank and hopper cars, to be delivered this year.

And the bulk of the new cars are being purchased by shippers or leasing companies, according to Tom Williamson, owner of Transportation Consultants Co. He estimated that about 55 percent of the railcars are being bought by leasing companies, 35 percent by shippers, and 10 percent by railroads. Reasons for the ownership shift trend include the weighting of new equipment toward tank cars (which the railroads own few of) and the decline in coal car deliveries (which the railroads own heavily).

Williamson made his remarks in a Nov. 16 conference call hosted by Stifel Nicolaus Transportation, Logistics and Equipment Research Group on railcar demand and equipment challenges.

In terms of railcar leasing rates, Williamson said he expects general service tank car rates to be very firm for 12 to 18 months, then soften, and for boxcar rates to be firm because of tight supply. For other car types, he sees a soft market for frac sand cars, and weak markets for covered hoppers, open top hoppers, coal cars and gondolas.

He noted that the prices for new tank cars have surged in the last two years, in part because of new safety features required by regulations. According to Williamson’s data, the average new tank car purchase price increased from $73,800 in 2011 to $101,500 in 2012 and will increase to $133,000 in 2013.

Efficiency gains could reduce demand for tank cars in crude service and increased pipeline capacity could slow growth for energy shipments. Williamson estimated that most crude-on-rail equipment is running in trips of 15-20 days. As railroads become more experienced in this new service, and as refiners build additional unloading capacity, it is possible that the rails will be able to run trains with shorter cycle times, reducing demand for tank railcars.

Williamson said he does not expect a decline in crude traffic on the rails; he agrees with other estimates that the rails should continue to handle about 40 percent of the crude coming out of the Bakken and expects growth in overall crude production to continue. He was less bullish on the rails’ opportunity to move crude from shales other than the Bakken and believes rail will have a market share of 15 percent or less of production out of the other shales.

He noted that leasing companies have bought, and are expanding/adding railcar maintenance and repair services. Williamson expects this to be a growth area.


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Vale Receives License to Expand Carajas Railroad

November 21st, 2012

Brazilian mining company Vale recently received an installation license, issued by the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovaveis, for construction work and vegetation removal along the 786 kilometers (about 488.4 miles) of the Carajas railway, which connects Vale’s iron ore mining operations in Para, Brazil, to the Ponta da Madeira port terminal in Maranhao, Brazil.

The license allows expansion of the railroad to 230 million metric tons per year. The project is expected to conclude in 2017.

The license also removes a regulatory block of the $19.5 billion project to develop the Serra Sul, or S11D, mine at Carajas in the Brazilian Amazon. More than half of the project’s budget will be used to prepare the Carajas railroad and the Ponta da Madeira terminal to handle Serra Sul’s production of 90 million metric tons of iron ore per year.

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Las Vegas Railway Express, Union Pacific Sign Conditional Deal for Passenger Service

November 20th, 2012

Las Vegas Railway Express and Union Pacific Railroad recently signed a conditional agreement for LVRE to provide passenger service on Union Pacific’s right of way between Las Vegas and Daggett, Calif.

The provisional agreement is dependent on LVRE fulfilling specified conditions.

LVRE plans to operate a luxury train service, called the “X Train,” between the Los Angeles basin and Las Vegas using Union Pacific’s track. The service is slated to begin in late 2013.

The company has been planning for the establishment of a “Vegas Class” passenger train service since early 2009. Service departures are planned to be Thursday and Friday to Las Vegas, with returns on Sunday back to Los Angeles.

The luxury train company reported a net loss in the third quarter of $870,020, compared with a net loss of $341,995 in the third quarter of 2011.

LVRE said in its quarterly financial statement that it needs to obtain a minimum of about $80 million to $90 million to begin operations of the planned service. It intends to seek the funds through the public or private sale of equity and debt securities, to be used for railcar purchase, design, refurbishment and outfitting, depot design and construction, lease payments, mileage fees, salaries and fees, technology and corporate infrastructure.

LVRE will give $56 million of the funds, if they are raised, to Union Pacific for the luxury route’s operating rights.

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Cargill to Expand Track at Tuscola Grain Elevator

November 20th, 2012

Agricultural producer Cargill is adding a loop of railroad track at its grain elevator in Tuscola, Ill., that will provide access to CSX, expanding the market for local corn and soybeans to the eastern and southeast U.S., as well as the Gulf of Mexico.

The $6.4 million project is set for completion in the spring of 2013. The track will loop around 200 acres at the Cargill site and will be able to accommodate 110 grain cars that can be loaded at one location.

The draw area is from the five counties surrounding Tuscola, which are some of the top producers of corn and soybeans in the nation, said Doug Childers, farm service group leader for Cargill AgHorizon’s Central Illinois region.

“Having access to load trains on the CSX gives the local farm customers additional access to eastern livestock markets, Cargill’s soybean processing plants in the southeast and the Gulf exports market,” Childers said.

Cargill also has access to Canadian National and Union Pacific because Tuscola is an intersection of the three major rail lines.

The grain elevator has 7.5 million bushel storage capacity in upright concrete and steel space, plus room for another four million bushels on temporary ground piles.

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Norfolk Southern Names Rail Welding Facility After Late Engineering Executive

November 19th, 2012

Norfolk Southern named its rail welding facility after the late Hubert L. Rose, who worked for the company for 43 years, at a dedication ceremony on Nov. 10.

Rose, who died in January, retired from Norfolk Southern as senior assistant vice president of maintenance of way and structures and planning in 1991. He headed the railroad’s maintenance of way group for 15 years, during which he led the railroad in its transition from laying jointed rail, which uses bolts to connect 39- or 78-foot sections of track, to installing continuous welded rail, in which 1,400-foot sections of rail are welded together to form one continuous track.

Rose was a native of Kenly, N.C., and graduated from North Carolina State University. He joined Southern Railway in 1948 as a survey, and was named chief engineer in 1971.

“Hubert Rose was an industry leader in the maintenance of rail infrastructure, and he is the person most identified with helping Norfolk Southern take advantage of the benefits of continuous welded rail, saving millions of dollars in maintenance and costs and preventing derailments,” Wick Moorman, NS CEO, said at the dedication.

The Atlanta rail fabrication complex opened in 1958 to manufacture railroad track for Norfolk Southern. It stretches over 30 acres and includes plants for rail welding, rail renewal, switch panels, track panels and rail reclamation. The rail welding and rewelding plants turn out new quarter-mile strands of rail for use on mainline tracks and reconditioned rail for use on secondary lines and industrial sidings.

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Harsco CFO Schnoor Resigns

November 19th, 2012

Harsco Corp. has announced the resignation of Stephen J. Schnoor as senior vice president, chief financial officer and treasurer

The company said that Barry E. Malamud, who currently serves as vice president and corporate controller, has been named interim CFO and will assume the responsibilities of principal financial officer until a permanent CFO has been selected. Both changes were effective as of Nov. 16, 2012.

“Steve has dedicated himself throughout his many years of Harsco service to the highest principles of financial integrity and prudent fiscal management,” said Harsco President and CEO Patrick Decker in a written statement. “We acknowledge with extreme gratitude his contributions to Harsco’s long-term financial stability. We recognize also that it is time to move forward under new leadership in this area as we shape the course of our renewed vision for Harsco as one of the world’s premier industrial companies.”

Harsco said it has engaged the firm of Heidrick & Struggles to undertake its search and recruitment process.

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Georgia Ports Unveils Improved Intermodal Container Transfer Facility

November 19th, 2012

At a ribbon-cutting ceremony on Nov. 16, Georgia Ports Authority officially opened its expanded Mason Intermodal Container Transfer Facility.

The $6.5 million, 6,000 foot railyard extension will expand capacity, improve efficiencies, and reduce costs for customers, said GPA Executive Director Curtis Foltz.

Previously, trains entered the Mason ICTF from the east and exited toward the west, requiring trains to make a wide loop through Garden City. Now, trains can enter from the west, avoiding 21 rail crossings and shaving six hours from the roundtrip turn times to Atlanta.

The two railyards at the port’s Garden City Terminal, serving Class I railroads Norfolk Southern and CSX, now have a total of 46,921 linear feet of track.

“Our two on-terminal facilities mean shippers don’t have to haul their goods to remote railyards, and can get cargo moving to distribution centers or other destionations more quickly,” Foltz said. “This expansion is part of our ongoing effort to hone the world-class service at the Port of Savannah.”

“This infrastructure investment helps prepare the Port of Savannah for projected increases in the share of container volumes moved via rail,” said Robert Jepson, GPA board chairman. “Currently, 18% of Savannah’s container volume is moved by train.”

The state Department of Transportation and GPA worked together on a Highway 307 overpass and the rail expansion projects in order to boost efficiency for both truck and rail transport.

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