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DysonRail Coordinates Magnetite Shipment Through Mexican Port of Guaymas

November 29th, 2012

Burbank, Calif.-based DysonRail, on behalf of its client Southern Minerals Group, has acted as a logistics coordinator for a 50,000 metric ton shipment of magnetite from New Mexico to China via Mexico’s Port of Guaymas.

DysonRail negotiated rail rates and service in a deal involving Southwestern Railroad, BNSF Railway, Union Pacific Railroad and Ferromex.

The company also coordinated the border crossing into Mexico at Nogales with Suarez Brothers Customs Brokers on the U.S. side, and Oscar Mayer Group in Sonora, Mexico. Port documentation and operations were arranged and supervised by Grupo Vejar of Guaymas.

The project entailed the rehabilitation of five miles of railroad spur to the mine where the magnetite is stockpiled.

The Port of Guaymas used a recently installed Ashcross railcar unloading machine.

“The level of teamwork among those involved was exemplary,” said Paul Dyson, president of DysonRail.

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Mica Stresses Need for Improved Performance Following Amtrak’s Reorganization

November 29th, 2012

At a U.S. House Transportation and Infrastructure Committee hearing today to review Amtrak’s structural reorganization, Chairman John L. Mica, R-Fla., stressed that the national passenger train’s plans must significantly reduce its dependence on taxpayer subsidies by improving performance, accountability and cost savings.

He also cited concerns with Amtrak’s mismanagement of its food and beverage service, resulting in an $833 million loss in 10 years, and inability to compete successfully against the private sector for commuter rail operating contracts.

The hearing examined what Amtrak is doing to improve its performance through its structural reorganization and five-year plan to significantly reduce taxpayer subsidies, Mica said at the hearing. It was the fourth inquiry into issues with Amtrak.

“Over the years, there have been calls from Congress, the Government Accountability Office and Amtrak’s Inspector General for Amtrak to clearly link the organization’s management to overall corporate goals and create more transparency and accountability,” Mica said.

The corporation will now be organized into six business lines, with each vice president or manager of a line responsible for how the respective line meets performance goals and expected profits, Mica explained. Reorganization is expected to be fully implemented by the end of 2013, he added.

Mica also noted that two more hearings are planned for Dec. 6, on the high speed and intercity passenger rail grant program, and Dec. 13, on the Northeast Corridor.

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Siemens to Acquire Invensys Rail for $2.9 Billion

November 29th, 2012

German industrial group Siemens signed an agreement to acquire Invensys Rail, the rail automation business of Invensys, for about $2.2 billion euros (approximately US $2.9 billion), to expand its presence in the global rail automation market.

Siemens also plans to sell its baggage handling, postal and parcel sorting activities to further focus on its infrastructure and cities sector. These undertakings have few synergies with other Siemens divisions because of the high mechanical content, Siemens said in a written statement.

The plans are part of the company’s recently launched “Siemens 2014” program, which aims to strengthen the company’s core activities.

The Invensys Rail acquisition is subject to Invensys shareholder approval; a vote is expected at a general meeting in December. Consent by Invensys’ lenders, the U.K. pension regulator and anti-trust authorities is also required. Siemens expects the transaction to close in the second quarter of 2013.

Invensys Rail will be integrated into Siemens’ rail automation business in the mobility and logistics division of the infrastructure and cities sector. Managers from both companies will form the new management team.

Synergies resulting from the acquisition are expected to exceed $129.9 million by 2018, Siemens said.

Invensys Rail has a strong presence in the U.K., the U.S., Spain and Australia. The acquisition will expand Siemens’ network, which currently has customers in countries such as Germany, Austria, Switzerland, China and India.

The positive growth outlook of the rail automation market is primarily driven by increasing urbanization and the demand for enhanced mobility, including new and extended mass transit and commuter systems, Siemens said. The market also benefits from trends such as energy efficiency, environmental factors, liberalization, deregulation and low-cost transportation requirements.

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Ex-Im Bank Lends Kazakhstan $425 Million to Purchase GE Locomotives

November 28th, 2012

The Export-Import Bank of the United States is lending $425 million to Kazakhstan Temir Zholy, Kazakhstan’s state-owned national railway company, and KTZ’s subsidiary Joint Stock Company Lokomotiv, to buy 200 General Electric Evolution Series locomotives and locomotive kits.

The contract was signed by Fred P. Hochberg, Ex-Im’s bank chairman and president; Kanat Alpysbayev, KTZ’s chief financial officer, and Marat Medeubayev, Joint Stock Company Lokomotiv’s CEO. Dastan S. Yeleukenov, Chargé d’Affaires of the Republic of Kazakhstan to the United States, and Lorenzo Simonelli, GE’s president of transportation systems and CEO, were also in attendance.

The loan is the largest single amount of financing that Ex-Im has provided to any railroad in the world in the past 15 years. The deal is also GE’s largest equipment sale to date to KTZ since it began selling to the railway in early 2000.

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Canadian Pacific Moves Headquarters as Part of Its Cost-Cutting Overhaul

November 27th, 2012

Canadian Pacific Railway will move most of its headquarters’ staff from leased office space in downtown Calgary, Alberta, to CP-owned office space in Ogden, Alta., as part of the company’s widespread operational cost cutting, The Globe and Mail reported.

The head office will be moved to a building that CP currently owns in Ogden railyard, said Ross Terry, vice president of the Teamsters Canada Rail Conference Maintenance of Way Employees Division.

Terry noted that CP management did not provide a breakdown of how much money will be saved from the move.

The Ogden railyard is currently being renovated because it was formerly a railway car repair shop, Terry added.

CP is in the midst of an extensive reorganization to improve operations and cut costs, under the management of Hunter Harrison, who was named CEO earlier this year.

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UAE’s Etihad Rail Signs First Customer for Stage Three Section

November 26th, 2012

Etihad Rail, operator of the United Arab Emirates’ national railway network, has signed an agreement with its first prospective customer for the third stage of the network. Sharjah Cement Factory will use the railroad to transport basic raw materials to the factory and cement to its customers throughout the UAE.

The memorandum of understanding was signed by Nasser Saif Al-Mansoori, CEO of Etihad Rail, and Ahmad Abdalla Al Noman, chairman of Sharjah Cement Factory.

The arrangement is expected to facilitate the transportation of more than five million metric tons of cargo per year, which is a volume that matches more than half of the cement factory’s existing logistics needs.

The third stage of the UAE’s rail network is now under construction. When completed, the freight and passenger rail network will span 1,200 kilometers across the UAE; it also will be part of the GCC Railway network, which links the UAE to Saudi Arabia.

Stage One links Shah and Habshan to Ruwais, and Stage Two will connect the railway to Mussafah, the Gulf ports of Khalifa and Jebel Ali, and the Saudi and Omani borders. Stage Three will connect the rest of the northern Emirates.

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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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