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REAct Stop Technology Installed on Railserve’s Switching Locomotives

February 26th, 2014

Railserve, a North American provider of in-plant railcar switching and related services, has developed and is now using Railserve Emergency ACTion Technology (REAct) at all of its 65-plus service locations.

When a hazard is recognized, REAct remote-stop application allows authorized employees to remotely stop locomotives by pushing a button worn on a crew member’s safety vest, without communicating to the engineer. The device allows remote stopping in instances such as loss of radio contact, vehicles entering a crossing in front of a train, or a sudden close clearance.

Railserve, a Marmon Group/Berkshire Hathaway company based in Atlanta, said the application of remote-stop technology on manned locomotives is believed to be the first of its kind in North America.

Railserve President Timothy J. Benjamin commented on the new technology. “REAct was developed as part of our ongoing safety-evaluation process. We recognized that circumstances can suddenly arise, such as when a vehicle crosses in front of an approaching train, or where the locomotive operator might not be able to see what the crew member on the ground is viewing.”

“We’ve measured the time lag from the moment a crew member recognizes a hazard to getting the radio in hand, opening communications, actually speaking a clear instruction, and for the train to come to a stop,” continued Benjamin. “That can take several valuable seconds—enough time for a train to move a hundred feet or more.”

Installation of REAct on all Railserve locomotives and accompanying operator training was completed in 2013. It has been activated several times when hazards suddenly developed, preventing crossing collisions, the company said. Emergency stops have been accomplished in about 26 feet, or a half car-length. Each time the device is used, a near-miss is reported to determine how potential incidents or injury can be prevented.

“Though we’ll never know which—if any—of those instances would have had negative outcomes, we are confident that our operational safety has been enhanced by REAct. That’s why we’re so proud to be the only North American operator of manned locomotives to be offering this important safety feature,”  Benjamin added.

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DOT Issues Emergency Order on Classifying Bakken Crude Oil

February 26th, 2014

The U.S. Department of Transportation has issued an Emergency Restriction – Prohibition Order that requires all shippers to test product from the Bakken region to ensure the proper classification of crude oil before it is transported by rail. It also prohibits the transportation of crude oil in the lowest-strength packing group.

The emergency order, the fourth one issued from DOT in less than a year, is in response to recent derailments involving trains carrying crude oil from the Bakken region. It also addresses concerns over the proper classification of crude oil shipped by rail.

DOT Secretary Anthony Foxx commented on the order. “Today we are raising the bar for shipping crude oil on behalf of the families and communities along rail lines nationwide — if you intend to move crude oil by rail, then you must test and classify the material appropriately,” said Fox. “And when you do ship it, you must follow the requirements for the two strongest safety packing groups. From emergency orders to voluntary agreements, we are using every tool at our disposal to ensure the safe transportation of crude.”

Effective immediately, those who offer crude oil for transportation by rail must ensure that the product is properly tested and classified in accordance with federal safety regulations. All Class III crude oil shipments must be designated as Packing Group I or II, which require the use of a more robust tank car. Until further notice, the lower risk designated Packing Group III will not be accepted, DOT said.

Several safety advisories have been issued by the  Pipeline and Hazardous Materials Safety Administration  (PHMSA) and the Federal Railroad Administration  related to the safe transport of crude oil by rail, including the January 2, 2014 safety alert. They are currently engaged in the ongoing rulemaking to improve the design of DOT 111 tank car.

PHMSA and FRA launched Operation Classification in the Bakken Shale region to verify that crude oil was being properly classified and announced last month the first proposed fines associated with that ongoing investigation. Unannounced spot inspections, data collection and sampling at strategic locations that service crude oil are also being implemented.

PHMSA is conducting a classification workshop this week in North Dakota at the 60th Annual State Fire School where it will provide training and information on hazmat response.

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Rail Energy Group To Hold March 6 Public Meeting

February 25th, 2014

The Surface Transportation Board has announced that a meeting of the Rail Energy Transportation Advisory Committee (RETAC) will be held on March 6, 2014, at 9:00 A.M.

The purpose of the meeting is to discuss issues such as rail performance, capacity constraints, infrastructure planning and development, and effective coordination among suppliers, carriers, and users of energy resources.

Potential agenda items include introduction of new members, performance measures review, discussion of domestic oil production and transportation, RETAC industry segment reports, presentation on the domestic coal market, and roundtable discussion.

RETAC was formed to provide advice and guidance to the board, and to serve as a forum for discussion of emerging issues regarding the transportation by rail of energy resources, particularly coal, ethanol, and other biofuels.

The public meeting will be held at the STB’s headquarters in Washington, D.C. Written comments may be submitted by the public at any time to RETAC, c/o Michael Higgins, Surface Transportation Board, 395 E Street, S.W., Washington, DC 20423-0001 or to Michael.Higgins@stb.dot.gov.

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Freight Railroads To Implement New Crude by Rail Safety Steps

February 24th, 2014

Talks between the nation’s major freight railroads and the U.S. Department of Transportation  (DOT) have resulted in a rail operations safety initiative that institutes new voluntary operating practices when transporting crude oil. The freight railroads were represented by the Association of American Railroads (AAR) and the discussions also included the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

DOT Secretary Anthony Foxx sent a letter outlining the commitments to AAR’s President and CEO Edward Hamberger, and requested that agreeing railroads sign the letter to publicly acknowledge their commitment to the safety practices.

“We share the Administration’s vision for making a safe rail network even safer, and have worked together to swiftly pinpoint new operating practices that enhance the safety of moving crude oil by rail,” said Hamberger. “Safety is a shared responsibility among all energy supply-chain stakeholders. We will continue to work with our safety partners – including regulators, our employees, our customers and the communities through which we operate – to find even more ways to reinforce public confidence in the rail industry’s ability to safely meet the increased demand to move crude oil.”

Under the initiative, major freight railroads agreed to the following commitments:

  • Route analysis – by July 1, railroads will begin using the Rail Corridor Risk Management System (RCRMS) to aid in determining the safest and most secure rail routes for trains with 20 or more cars of petroleum crude oil ;
  • Speed restrictions – by July 1, railroads will adhere to a speed restriction of 40 mph for any key crude oil train with at least one “DOT Specification 111” tank car loaded with crude oil or one non-DOT specification tank car loaded with crude oil while that train travels within the limits of any high-threat urban area;
  • Braking systems – by April 1, railroads will equip all key crude oil trains with either distributed power or two-way telemetry end-of-train devices. These technologies allow train crews to apply emergency brakes from both ends of the train;
  • Track inspections – effective March 25, railroads will perform at least one additional internal rail inspection than required by FRA regulations on main line routes over which key crude oil trains are operated. Railroads also will conduct at least two track geometry inspections each year on main line routes they own or are responsible for maintaining over which key crude oil trains are operated;
  • Increased wheel bearing detectors - by July 1, railroads will begin installing additional wayside wheel bearing detectors if they are not already in place every 40 miles along tracks with key crude oil trains, as other safety factors allow; 
  • Emergency response planning – by July 1, railroads will develop an inventory of emergency response resources along routes over which key crude oil trains operate for responding to the release of large amounts of petroleum crude oil in the event of an incident. This inventory will include locations for staging of emergency response equipment and contacts for the notification of communities where appropriate. Railroads will provide DOT with access to information regarding the inventory and will make relevant information available to emergency responders upon request;
  • Emergency response training – railroads will individually commit in the aggregate a total of approximately $5 million to develop and provide a crude oil hazardous material transport training curriculum for emergency responders and to fund a portion of the cost of this training through the end of 2014. One part of the curriculum will be for local emergency responders in the field; and more comprehensive training will be conducted at the Transportation Technology Center, Inc., (TTCI) training facility. AAR will work with emergency responders to develop a training program by July 1;
  • Community outreach – railroads will continue to work with communities to address any issues regarding the transportation of crude oil through those communities.

Railroads will continue to work with the Administration and rail customers to address other key shared safety responsibilities, including federal tank car standards and the proper shipper classification and labeling of oil moving by rail, the AAR said. PHMSA is currently reviewing public comments on increasing federal tank car standards.

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Trinity Posts Record Fourth Quarter, 2013 Results

February 21st, 2014

Trinity Industries, Inc. has reported record fourth quarter and full year earnings for 2013.

For the 2013 year-end results, Trinity reported a net income attributable to Trinity stockholders of $375.5 million, or $4.75 per common diluted share. Year-end results for 2012 net income were reported at $255.2 million, or $3.19 per common diluted share. Year-end revenues for 2013 were $4.4 billion, a 15-percent increase from 2012 year-end revenues of $3.8 billion.

Net income attributable to Trinity stockholders for the 2013 fourth quarter was reported at $112.8 million, or $1.44 per common diluted share compared to the same quarter of 2012 that reported net income of $71.3 million, or $0.90 per common diluted share. There was a 24-percent increase in revenues for the 2013 fourth quarter which reported $1.3 billion when compared to 2012 fourth quarter results of $1.0 billion.

The Rail Group reported record revenues of $855.5 million – an increase of 50 percent over 2012 fourth quarter results. A record operating profit of $157.4 million was recorded for the 2013 fourth quarter – an increase of 123 percent over 2012 fourth quarter results. The Rail Group shipped 7,280 railcars and received orders for 7,125 railcars during the fourth quarter. The Group backlog decreased slightly to $5.0 billion as of Dec. 31, 2013, representing 39,895 railcars.

The Railcar Leasing and Management Services Group reported revenues for the 2013 fourth quarter at $151.3 million compared to 2012 fourth quarter results of $132.6 million. The increase was due to continued growth in the lease fleet and higher rental rates. During the fourth quarter of 2013 the group reported $39.5 million in sales of lease fleet railcars owned for less than a year compared to $18.1 million in the fourth quarter of 2012. Proceeds from the sale of railcars from the lease fleet owned for more than a year at the time of sale are not included in revenue and totaled $72.3 million in the fourth quarter of 2013 and $31.4 million in the fourth quarter of 2012.

The Railcar Leasing and Management Services Group reported a 2013 fourth quarter operating profit of $85.5 million ($16.4 million of profit from railcar sales totaling $111.8 million) compared to the 2012 fourth quarter operating profit of $72.9 million ($15.3 million of profit from railcar sales totaling $49.5 million).

Timothy R. Wallace, Trinity’s chairman, CEO and president, commented on the earnings report. “I am pleased with our strong financial results for the fourth quarter and our overall performance during 2013. We achieved a number of key financial milestones, reporting record revenues, net income and earnings per share for both the fourth quarter and the full year. I am very proud of our people, whose capabilities and hard work enabled us to realign a portion of our manufacturing capacity to serve customers for products in the oil, gas, and chemical industries.”

Wallace continued, “During 2013, we announced two transactions with institutional investors desiring to invest in a portfolio of leased railcars, RIV 2013, a $1 billion railcar investment partnership, and Element Financial, through a $2 billion program agreement. I expect these transactions will continue to create value for the company.”

Wallace said that during 2014 Trinity will continue to invest resources to position the company to pursue opportunities for infrastructure-related products that support the growing needs in the energy, chemical, transportation, and construction industries. “We have a great deal of positive momentum occurring within Trinity,” he added.

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Comments Due April 21 on TTX Pooling Pact Extension

February 21st, 2014

The Surface Transportation Board has set a deadline of April 21 for public comments on TTX Co.’s application to extend its flatcar pooling authorization for another 15 years. Rebuttal comments are due at the agency May 19.

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 have 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 are:  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 Company, through its U.S. affiliate Soo Line Railroad Company; CSX Transportation, Inc.; Ferromex; The Kansas City Southern Railway Company; Norfolk Southern Railway Company; Pan Am Railways; and Union Pacific Railroad Company.                                                                       

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 expires this year.

TTX submitted with its application an initial group of support letters from more than 50 shippers. A core group of TTX’s supporters are shippers whose freight moves on flatcars, including: intermodal shippers like Home Depot, Lowe’s, and Canadian Tire; steamship lines like APL, Hapag-Lloyd, Hyundai Intermodal, “K” Line, Maersk, and MOL (America); automotive shippers like General Motors, Nissan, and Toyota; forest products shippers like Georgia-Pacific, Plum Creek, and Roseburg Lumber; manufacturers of tractors and other heavy machinery like Deere & Company; pipe and steel shippers like American Cast Iron Pipe Company and EVRAZ; shippers of power transformers like SPX Transformer Solutions; and the trade association representing wind energy shippers, American Wind Energy Association, and intermodal, the Intermodal Association of North America. Supporters also include intermediaries who represent shippers that depend on efficient flatcar supply, including: trucking companies like J.B. Hunt and Swift; intermodal marketing companies like C. H. Robinson and Hub Group; transloaders like Universal Warehouse; arrangers of heavy-duty shipments like Mammoet USA, Maritime World Logistics, and BNSF Logistics; and arrangers of wind turbine shipments like Logisticus. Backers also include some of the largest container ports in the United States, including: New York/New Jersey, Long Beach, Los Angeles, Tacoma, and the Alameda Corridor Transportation Authority.  Several railway industry suppliers, including Amsted Rail, Miner Enterprises, Morton Manufacturing, Pennsy Corp., Phoenix Bearings, Timken and Wabtec, also supported the TTX filing.

 

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CN President Mongeau To Keynote RSI/CMA 2014 Exhibition

February 21st, 2014

Claude Mongeau, Canadian National Railway  president and CEO, will be the keynote speaker at RSI/CMA 2014. The exhibition will be held on September 21 -23 at the Palais des congrès de Montréal (Montreal Convention Center) in Montreal, Quebec.

“Claude Mongeau is a dynamic industry leader, and his keynote speech will be a must-attend event at RSI/CMA 2014,” RSI President Tom Simpson remarked. “Our members look forward to learning how they can best serve CN and the Canadian rail market.”

The RSI/CMA 2014 exhibition will be held by the Railway Supply Institute  (RSI) and the Canadian Association of Railway Suppliers.  Technical and educational 2014 sessions from the Coordinated Mechanical Associations (CMA) will be available at the event. The Canadian Rail Summit hosted by the Railway Association of Canada is also being held in conjunction with RSI/CMA 2014.

The Coordinated Mechanical Associations include the Air Brake Association (ABA), the International Association of Railroad Operating Officers  (IAROO), the League of Railway Industry Women (LRIW), the Locomotive Maintenance Officers Association  (LMOA), and the Mechanical Association Railcar Technical Services (MARTS).

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NTSB Recommends Recorders, Speed Signs on Metro-North

February 20th, 2014

A series of safety recommendations to the Metro-North Railroad have been issued by the National Transportation Safety Board  (NTSB).

The recommendations were developed from information gathered in the ongoing investigation of the December 1, 2013 derailment of a Metro-North passenger train in the Bronx, New York. The derailment occurred on a southbound train, consisting of seven passenger cars and one locomotive, on the Metro-North Hudson Line near Spuyten Duyvil Station. Four passengers were killed and dozens were injured in the accident.

Investigators found that Metro-North did not use signage for permanent speed restriction areas including the area where the accident occurred, but had posted signs for temporary speed restrictions throughout its rail property. Although Metro-North has since installed signage to aid operating crews at four locations with permanent speed restrictions, the NTSB believes that Metro-North should use a more systematic approach and install signage at all locations where permanent speed restrictions are in place.

The new safety recommendations from NTSB call for the installation of approach permanent speed restrictions signs along the right-of-ways and the use of inward and outward facing audio and image recorders. The letter with the recommendations to Metro North can be viewed on the NTSB web site.

NTSB Chairman Deborah A.P. Hersman said, “The images and audio captured by recorders can be invaluable to our investigators. Understanding what is happening inside the cab just prior to a crash can provide crucial information about how to prevent future accidents.”

Since 2007, the NTSB has been advocating for inward and outward facing recorders for investigation and oversight purposes. It has previously made recommendations to the Federal Railroad Administration and other railroads regarding the matter.

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Railcar Builders ARI, FCA Post 2013 Earnings

February 20th, 2014

American Railcar Industries, Inc. and FreightCar America reported fourth quarter and full-year 2013 results that told different financial and market stories.

ARI said it had another record performance during 2013. “Operating earnings improved 24 percent compared to 2012 as we continue to benefit from strong tank railcar sales that have strong margins, and have generated operational leverage and efficiencies throughout 2013. We believe the hopper railcar market is beginning to recover, as demonstrated by orders we received during the fourth quarter. As of Dec. 31, 2013, we had a backlog of approximately 8,560 railcars, of which approximately 2,330 were orders for railcars that will be subject to lease. During 2013, we increased our lease fleet by 1,860 railcars, to a total of 4,450 railcars. Our railcar leasing segment has become a significant contributor to our results and we continue to invest in its growth. We obtained additional financing in January 2014 to continue to grow this business,” said Jeff Hollister, president and Interim CEO of ARI.

Total consolidated revenues for the fourth quarter of 2013 were $197.2 million, down 5 percent when compared to $207.7 million for the same period in 2012. The decrease in consolidated revenues was due to a decrease in direct sale railcar shipments in the fourth quarter of 2013 compared to the fourth quarter of 2012, as a result of building more railcars for its lease fleet. This was partially offset by increased revenues for the railcar services and railcar leasing segments.

Total manufacturing segment revenues for the fourth quarter of 2013 were $252.5 million, an increase of 7 percent over the $236.5 million for the same period in 2012. The primary reason for the increase was a higher mix of tank railcars sold, which generally sell at higher prices due to more material and labor content, and at higher margins than covered hopper railcars. During the fourth quarter of 2013, ARI shipped approximately 2,050 railcars, including 670 railcars built for the company’s lease fleet, compared to approximately 2,010 railcars for the same period of 2012, including about 410 railcars built for the lease fleet. Railcars built for the lease fleet represented approximately 33 percent of ARI’s railcar shipments during the fourth quarter of 2013 compared to approximately 20 percent for the same period in 2012.

The company said it recorded a loss from the sale of its interest in its India joint venture, Amtek Railcar Industries Private Limited (Amtek Railcar), of $5.9 million in the fourth quarter of 2013. Amtek Railcar experienced delays in the initial start-up of the business, as well as delays in completing the rail connection from the joint venture’s plant to the mainline. These factors contributed to Amtek Railcar delivering financial results weaker than originally anticipated. After considering various strategic alternatives, the company decided to sell its interest in the joint venture, effective December 27, 2013.

Consolidated revenues for 2013 were $750.6 million compared to $711.7 million in 2012. Total manufacturing segment revenues were $864.0 million for 2013 compared to $853.0 million in 2012. Net earnings in 2013 were $86.9 million, or $4.07 per share, compared to $63.8 million, or $2.99 per share in 2012. This increase was due to higher earnings from operations as well as a 59 percent decrease in interest expense in 2013, compared to 2012, as a result of the low interest rate on its lease fleet financing and a lower debt balance due to the voluntary redemption of notes. 

FreightCar America said its fourth quarter 2013 results included restructuring and non-cash impairment charges totaling $10.5 million. Its manufacturing segment results included a non-cash impairment charge of $7.6 million related to its Danville facility and the services segment results included a $1.9 million restructuring and impairment charge related to the closure of the Clinton, Indiana facility.

Joe McNeely, CEO of FreightCar America, remarked on the results. “FreightCar America experienced a significant transformation of the business in 2013. While the financial results are not what we desired, we completed several key strategic milestones in the past year,” said McNeely. “We successfully started up the Shoals facility and brought to market a number of non-coal car types including intermodal and covered hopper railcars. We also continued to make changes to improve the returns of our services business, which resulted in the decision to close one of our underperforming repair shops. With the execution of our strategic priorities and maintaining our market leadership in coal cars, we expect to deliver approximately 7,000 cars in 2014.”

Its revenues for fourth quarter 2013 were $79.7 million, a net loss of $12.3 million. Its revenues for fourth quarter 2012 were $116.6 million.

Railcars delivered in the fourth quarter of 2013 were 1,101, including 190 new, 99 used and 812 rebuilt railcars. It has a total manufacturing backlog of 6,826 units.

Manufacturing revenues for fourth quarter 2013 were $72.1 million, for an operating loss of $8.7 million.

Total revenues for 2013 were $290.4 million, compared to $677.4 million in 2012.

Railcars delivered in 2013 were 3,821, including 992 new, 99 used 2,530 rebuilt and 200 leased railcars. That’s down significantly from 2012 when it delivered 8,325 cars. Manufacturing revenues for 2013 were $253.8 million.

 

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CN Unveils $2.1 Billion Capex Plan

February 19th, 2014

CN plans to spend approximately C$2.1 billion on a 2014 capital program, a slight increase from last year’s capital expenditures.

CN is targeting to spend more than C$1.2 billion in 2014 on track infrastructure and to improve the safety, productivity and fluidity of the network. This will include replacement of rail, ties and other track materials, bridge improvements, as well as various branch-line upgrades. This will also include funds for strategic initiatives and additional improvements to track infrastructure in western and eastern Canada as well as in the United States.

CN’s equipment capital expenditures in 2014 are targeted to reach approximately C$300 million. To accommodate increased traffic and improve operational efficiency, CN in 2013 took delivery of 44 new and 37 second-hand high-horsepower locomotives. In 2014, CN will acquire an additional 45 new high-horsepower locomotives.

By the end of 2014, CN will have acquired 763 high-horsepower locomotives over a 10-year period–these units will represent more than half of CN’s high-horsepower mainline fleet. Of these acquisitions, 114 units will have alternate-current electrical (AC) traction systems.

CN also expects to spend about C$600 million in 2014 on facilities to grow the business, including transloading terminals, distribution centers and the completion of its Calgary Logistics Park project. This area also includes capital for information technology to improve service and operating efficiency, and for other projects to increase the productivity of operations.

In addition to capital expenditures to ensure the integrity of CN’s rail infrastructure, the company is allocating funds to enhance its system-wide flaw detection capabilities. CN will also complete the construction in 2014 of two state-of-the-art training facilities – one in Winnipeg, the other in suburban Chicago – that will help strengthen CN’s safety culture and prepare a new generation of safety conscious railroaders.

Claude Mongeau, president and CEO, said: “CN is committed to making continued improvements in its safety performance – infrastructure investments are critical to this, as well as to driving improvements in customer service and taking advantage of freight opportunities to grow the business at low incremental cost.  Investments in our network and distribution capability, the acquisition of new locomotives and equipment and the enhancement of information systems and technology will help support our agenda of operational and service excellence.”

He added that the investments will position CN to capitalize on business opportunities in intermodal, energy and other resource and manufacturing markets.

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