The Andersons, Inc. has reported results for the third quarter of 2014, including a net income of $16.8 million, or $0.59 per diluted share, on revenues of $1 billion. In the third quarter of 2013, the net income was $17.2 million, or $0.61 per diluted share, on revenues of $1.2 billion.
“We’re pleased with our results through September, which set a record,” said CEO Mike Anderson. “Our earnings this year clearly have been led by the outstanding results of our Ethanol Group. I want to mention, however, that current ethanol market indications for 2015 show margins declining from the levels we have seen this year.”
The company’s Rail Group income was down in the third quarter partly due to recognizing $4.3 million in income from the settlement of two non-performing leases last year. There was also a significant increase in freight expense to move idle cars into service.
At the end of September, the Rail Group’s utilization rate was 90.1 percent compared to last year’s 86.3 percent. The utilization rate is expected to increase further as the year progresses.
“We continue to grow, both organically and by acquisition, including the purchase of Auburn Bean and Grain in October, which added grain and agronomy locations throughout north central Michigan,” continued Anderson. “This is an area of strategic significance to the company as it connects our existing locations to our Thompsons joint venture in Ontario. This acquisition increased our grain storage capacity by 13 percent, and our nutrient storage by four percent.”
The Andersons, Inc. is a diversified company whose Rail Group repairs, sells, manages and leases railcars and locomotives.
The Peninsula Corridor Joint Powers Board, which administers and owns Caltrain Rail, received updated information on the projected cost and timeframe for the Peninsula Corridor Electrification Project (PCEP). The PCEP will convert the rail system from a diesel-based service to an electrified system. The project includes new electric rail vehicles and the electrification of the Caltrain Line, which services the San Francisco Area.
The cost for electrification is now projected to be between $1.47 billion and $1.5 billion. The previous projected cost, which was calculated in 2008, was $1.2 billion.
Projected cost for the total Caltrain Modernization (CalMod) Program is $1.7 billion to $1.76 billion, compared to the previous cost projection of $1.45 billion. The projected cost of the new signal system, CBOSS PTC, which is part of the CalMod Program, remains unchanged at $231 million.
The final cost for the project will not be known until the design build and vehicle procurement contracts are awarded in 2015.
The projected date for the start of electrified service has changed from the winter of 2019 to the new projected date of between the winter 2020 and the spring 2021. The PCEP is expected to complete the environmental process in January 2015 with construction starting in 2016.
“We are all anxious to get Caltrain electrified so our communities can benefit from expanded and improved service,” said Adrienne Tissier, member of the Caltrain Board of Directors and the Metropolitan Transportation Commission, which is helping to fund the project. “With a project of this size and significance, we expect the cost and schedule projections to be adjusted, especially when the previous projections are six years old. This update allows the project to move forward with environmental clearance so we can get to work building a system that accommodates growing ridership demand.”
The electrification project cost update has increased since the 2008 projected cost due to inflation, updated industry information, additional engineering and an analysis of constructing the project while maintaining train service. The range reflects cost containment measures associated with scope reductions and deferments that are under consideration.
Nine local, state and regional entities agreed to fund the Caltrain Modernization Program, which was based on the 2008 PCEP cost projections and included the program’s advanced signal system project (CBOSS PTC), which is fully funded and under construction.
“With more customers relying on Caltrain for their commute, we have to do our best to preserve the weekday commute service while delivering the project in a timely fashion,” said Caltrain’s Executive Director Michael Scanlon. “It’s a delicate balancing act. We desperately need the increased capacity that electrification will provide but we want to maintain as much service as possible while we pursue modernization.”
The Caltrain commuter rail provides service from San Francisco to San Jose, with limited commute service to Gilroy.
Joseph C. Szabo, who has served as Administrator of the U.S. Department of Transportation’s Federal Railroad Administration (FRA) since 2009, announced he will be leaving the agency in January 2015. He has accepted a position as senior fellow with the Chicago Metropolitan Agency for Planning (CMAP), the official regional planning organization for the northeastern Illinois counties of Cook, DuPage, Kane, Kendall, Lake McHenry and Will.
A fifth-generation railroader, Szabo is the 12th FRA Administrator and the first to have the distinction of coming from the ranks of railroad workers.
At CMAP, Szabo will play a leadership role in major policy-related projects, including infrastructure funding, coordinating with local officials to develop and implement policies, and developing a national transportation policy in cooperation with other major metropolitan regions and national associations.
In a letter to his co-workers and leaders in the rail industry, Szabo said, “As a 38-year veteran of the rail industry – one who worked out in the ranks – the most meaningful improvement to me was the dramatic drop in employee fatalities to a new record low. Over the course of my railroad career, I’ve lost five good friends to on-duty fatalities and, like most rail workers, survived my share of close calls in the workplace. In 2008, the year before I came to FRA, 26 rail workers perished in on-duty fatalities – a rate of more than two a month.”
He continued, “Through your good work, we drove that down to a record low number of 14 employee fatalities in 2013 – still too many, but a remarkable improvement. Now, ten months into 2014, we are at 5 fatalities for the year and getting so close to the ultimate goal of zero. I’m counting on the practices we’ve put into place, particularly proactive programs like Confidential Close Calls Reporting, to get us to zero in 2015. And I’ll be watching closely from the sidelines.”
The American Short Line and Regional Railroad Association praised the FRA administrator, saying his “support of the ASLRRA’s Safety Institute initiative has been unwavering and has set the groundwork for helping ASLRRA to establish improved safety processes and procedures on America’s short line and regional railroad operations.”
“We wish Joe well in his move back to Chicago and look forward to continuing to work with him in his new capacity,” the association said.
BNSF Railway held a ribbon-cutting ceremony to celebrate the opening of a new logistic center in Sweetwater, Texas. The $45 million facility, located on 75 acres on the northwest side of the city, will accommodate several industries, including agricultural commodities, sand, pipe and aggregate. Rail, truck and transload services will be available.
“The completion of this project is another example of BNSF’s commitment to industry in the Permian Basin,” said Dave Garin, group vice president, industrial products, BNSF. “The BNSF Logistics Center at Sweetwater will serve as a hub for economic activity in the region as the Cline Shale is explored for many years to come.”
Rail capabilities at the logistics center include a 100-car unit train sand terminal, a 110-car unit train Ag (wheat and cotton seed) terminal and a 90-car unit train aggregate terminal. There is also a 30-car dimensional transload site and an expandable BNSF switch yard. Sweetwater Switching Co LLC, which is adjacent to center, has a 5,000-foot track expansion for transload.
BNSF invested $28 million to replace existing track and add 40,000 feet of new track at the site. Tenant industries contributed $17 million to the project, which will create 15 permanent jobs in Sweetwater. The design for the logistics center began in 2012, and construction was completed in September 2014.
The Federal Railroad Administration (FRA) issued a final rule that requires railroad employees and contractors who perform safety-related work to be trained and qualified to comply with any relevant federal railroad safety laws, regulations, and orders.
The rule, mandated by the Rail Safety Improvement Act (RSIA) of 2008, strengthens training requirements for all safety-related railroad workers regardless of whether the person is employed by a railroad, a contractor or a subcontractor.
“Safety is our top priority and this is just the latest step in our mission to ensure the safety of railroad employees, the public and the communities these railroads pass through,” said U.S. Transportation Secretary Anthony Foxx. “The GROW AMERICA Act will help advance safety by harnessing technology and research, as well as implementing Positive Train Control and updating federal hours of service regulations.”
The requirements include minimum training standards for each type of safety-related railroad employee, with the FRA reviewing and approving each employer’s training program to ascertain each employee will be qualified to measurable standards.
The ruling also calls for greater use of structured on-the-job and interactive training. Methods will be available for each employer to review and improve training programs annually with a focus on closing performance gaps. The FRA is also calling for a streamlined, nation-wide approach that will work across multiple jurisdictions for bolstering training for operators of roadway maintenance machines equipped with a crane.
Federal Railroad Administrator Joseph C. Szabo stated, “Quality training is fundamental to the execution of safety sensitive railroad duties. This regulation ensures the heightened professionalism of the workforce that keeps our railroads running safety and efficiently every day.”
In order to complete the actions mandated by RSIA, the FRA is currently working through the Railroad Safety Advisory Committee (RSAC) to develop performance-based programs that anticipate and reduce risk.
Recommendations for fatigue management provisions have been developed by an RSAC working group, and the agency is developing rules for the transportation of crude oil and ethanol by rail, focusing on the securement of equipment and the appropriate crew size requirements when transporting highly flammable liquids.
The FRA is preparing a final rule amending its regulations related to roadway workers and is developing proposed rules on standards for alternative compliance with FRA’s Passenger Equipment Safety Standards.
Stella-Jones Inc. has reported a strong financial 2014 third quarter, with increases in sales, operating income and net income. The third quarter, which ended September 30, 2014, had sales of $357.3 million, an increase of 25.2 percent compared to last year’s $285.3 million. The company’s operating income increased by 18 percent to a total of $45.5 million, compared to the 2013 third quarter’s $38.6 million.
Net income for the 2014 third quarter was $29.5 million, or $0.43 per share, fully diluted, compared to last years $27.7 million, or $0.40, fully diluted. Stella-Jones solid cash flow for the quarter allowed the company to repay debt of $44 million.
Sales in railway ties totaled $148.8 million, an increase of 49.7 percent compared to last year’s $99.4 million. Railway tie sales rose approximately 34.7%, excluding sales from acquired assets and the conversion effect. Including approximately $15 million negative effect on the 2013 third quarter railway tie sales because of the transition of a Class I railroad customer from a “treating services only” program to a “black-tie” program, year-over-year sales increased $19.5 million, or 17%. This increase reflects solid market demand for tie replacement programs as well as increased pricing.
“We are pleased with Stella-Jones’ solid sales growth in the third quarter, which reflects our expanding presence in our core markets and healthy industry demand,” said Brian McManus, president and chief executive officer. “While margins remained affected by higher year-over-year costs for untreated railway ties, we have initiated certain selling price adjustments permitted in the majority of our multi-year contracts.”
“Our focus on operating efficiency led to further growth in operating income, while a solid cash flow generation allowed Stella-Jones to substantially reduce its long-term debt,” added McManus.
For the first nine months of 2014, sales totaled $959.6 million compared to $788.8 million for the same time period last year. Acquisitions accounted for total sales of $52 million, while the conversion effect of the Canadian dollar versus the U.S. dollar had a positive impact of $43.2 million on the U.S. sales. Excluding these factors, sales increased approximately $75.6 million, or 9.6%.
Operating income for the first nine months was $121.8 million, or 12.7% of sales, up from last year’s $109.2 million, or 13.8% of sales. Net income totaled $80.9 million, or $1.17 per share, fully diluted, compared with $72.8 million, or $1.05 per share, fully diluted, for 2013.
“Driven by continuing economic growth and sound fundamentals, we expect demand for Stella-Jones’ core products to remain healthy for the remainder of 2014 and through 2015,” said McManus. “For this reason, our established reputation as a reliable provider of high-quality treated wood products should allow the Company to gain further momentum in its core markets across North America.”
“In the short-term, we continue to adjust selling prices in response to higher untreated railway tie costs and we are pleased with the progress achieved so far. Over the longer term, a continuous focus on enhancing efficiency and productivity across our continental network should allow Stella-Jones to sustain profitability and cash flow growth to the benefit of its shareholders,” concluded McManus.
Stella-Jones Inc. is a producer of pressure treated wood products, supplying railway ties and timbers to the North American rail industry.
Los Angeles County Metropolitan Transportation Authority (Metro) leaders recently joined federal, state and local officials at the groundbreaking of the first segment of the Metro Purple Line Extension Project. The project will connect West Los Angeles to the region’s Metro bus and rail network, as well as municipal bus lines and other regional transportation services.
The first part of the subway extension will run 3.9 miles from the existing Wilshile/Western Purple Line terminal near Koreatown to Beverly Hills. It has an expected completion date of 2023 and a budget of $2.821 billion. This segment will include three new underground stations at Wilshire/La Brea, Wilshire/Fairfax and Wilshire/La Cienega and the purchase of 34 new heavy rail vehicles to augment the existing fleet.
“The Purple Line will ease traffic along the congested Wilshire corridor and will make traveling from the westside to downtown faster and greener. When it comes to infrastructure, L.A. is on the move. We are right now investing 36 billion dollars in our transportation infrastructure to ease congestion and create thousands of jobs,” said Los Angeles Mayor and Metro Board Chair Eric Garcetti, who added that this is the largest public works project in the nation. “In the car capital of the world, we are looking to reduce traffic and cut air pollution by giving people car-free options to get to work and play.”
Zev Yaroslavsky, Los Angeles County supervisor and Metro Board member, commented on the groundbreaking, saying, “No transit corridor in our region is in greater need of mass rapid transit. The area to be served is one of the most dense employment centers in the county and is plagued by some of the worst traffic congestion in the country. This groundbreaking is long overdue and will be well received by people who work and live in the Westside.”
The Purple Line extension is partially funded by the 2008 Measure R sales tax. Metro also received a $1.25 billion Full Funding Grant Agreement (FFGA) from the Federal Transit Administration and a U.S. Department of Transportation low-interest Transportation Infrastructure Finance and Innovation Act (TIFIA) loan of $856 million to complete the funding package for the project’s first phase. The remaining $821 million in project funding for the first segment includes Measure R, City of Los Angeles local funding, and other existing local and federal funds.
“Los Angeles has made enormous strides to expand transportation options and accelerate construction of projects that will create jobs, improve mobility, and spur economic growth,” said U.S. Senator Barbara Boxer. “The Purple Line Extension is another major accomplishment. I am proud that the TIFIA Program from MAP-21 provided key financing of $856 million that enabled this project to move forward.”
The project will be built in three sections, with Section 2, which includes Wilshire/Rodeo and Century City stations, scheduled for completion in 2026. Section 3 has a planned opening of 2035 and will include Westwood/UCLA and Westwood/VA Hospital stations. The complete Purple Line Extension will run west from Wilshire/Western for nearly 9 miles with a total of seven new stations.
Metro is currently seeking additional federal funding that could accelerate subway construction for Section 2 in the form of a $1.1 billion grant from the federal New Starts program, and a $307 million low-interest loan from the federal TIFIA program.
“Breaking ground on the Purple Line extension is an important step toward completing this key transit option for Angelenos, which will help relieve congestion and boost the local economy,” said U.S. Senator Diane Feinstein. “I applaud the efforts of everyone who helped us reach this point, but we have work left to do. The federal government is committed to providing $1.25 billion of the $2.8 billion cost for phase one, but future phases will require an estimated $3.5 billion. I will continue to strongly support federal funding to complete this important transit project.”
In July, Metro’s Board of Directors awarded the Purple Line Extension Project construction contract to the joint venture of Skanska, Traylor and Sheae. The complete 9-mile project is proected to generated approximately 62,000 daily weekday boardings at the seven new stations. By 2040, 150,000 daily boardings are expcted on the Purple Line between Union Station and Westwood/VA Hospital.
CSX has appointed Kellen Riley South Carolina industrial development manager, responsible for managing existing customer partnerships, helping locate rail-served industries along the company’s network in South Carolina and identifying new development sites throughout the state.
“We’re thrilled to have Kellen on board to help drive industry development and customer investment in the state of South Carolina,” said Clark Robertson, assistant vice president regional development. “Kellen’s enthusiasm and familiarity with South Carolina’s business environment will broaden our footprint in the state while contributing to ongoing economic development activities.”
Riley, who joined CSX in 2010, is part of the Regional Development team, which assists firms interested in locating rail-served sites on CSX’s network and converts potential customers to rail service by demonstrating the benefits of moving freight by rail. In addition, the team helps customers expand and target new markets.zorb ball
In the past five years, CSX and its customers invested more than $14 billion in rail-served facilities, establishing more than 14,000 jobs at industrial plants, distribution centers and other facilities. In 2013, the Regional Development team helped develop 121 new and expanded facilities, generating more than $3 billion in capital investment from customers and creating 1,600 new jobs in their local communities.
When Riley joined CSX in 2010, he was part of the New Business Development team, overseeing expansion of CSX’s petroleum, plastics, phosphates and fertilizers business. He earned a Bachelor’s degree and an MBA from the University of South Carolina.
“I’m excited to join Regional Development and look forward to partnering with others to help locate new business to the state,” said Riley. “South Carolina has clearly demonstrated significant success attracting new industry, and I look forward to helping CSX to build on that momentum.”
All Aboard Florida has started construction on the downtown Fort Lauderdale station, marking the first groundbreaking for one of its three south Florida stations along the Miami to Orlando passenger rail line.
The station will be located on the northern end of downtown Fort Lauderdale on NW 2ndAvenue, between Broward Boulevard and NW 4th Street, on 4.8 acres of land adjacent to the Florida East Coast Railway corridor.
“Today marks the start of progress on what will be one of the most transformative, history-making endeavors for Fort Lauderdale and the State of Florida,” said Michael Reininger, president and chief development officer of All Aboard Florida. “Now that construction has begun, Broward County is one step closer to becoming a more mobile, connected region that will realize the economic and environmental benefits from the creation of thousands of jobs during construction, expanded business opportunities and an enhanced quality of life.”
The nearly 60,000 square foot station and platform was planned and designed by Skidmore, Owings & Merrill LLP in association with Zyscovich Architects. The station will include a modern, multi-story lobby with an elevated passenger lounge area and parking facilities. The station will offer connections to the Sun Trolley, Broward County Transit system, future Wave Streetcar and the planned Tri-Rail station.
All Aboard Florida’s passenger rail project will have stations in Miami, Fort Lauderdale and West Palm Beach and is expected to generate significant economic impact to the state. The Fort Lauderdale station in Broward County is expected to generate $333 million in economic impact for the county through 2021. The construction of the station and the rail line will create nearly 800 jobs in Broward County.
“All Aboard Florida’s Fort Lauderdale station is a game-changing venture that will spur direct positive impacts in the areas of redevelopment, tourism and economic growth for our City,” said Fort Lauderdale Mayor John P. “Jack” Seiler. “With the project poised to bring even more visitors to our growing destination, downtown will soon have ready access to places to shop, eat, and connect once the new station is complete, which will help bring the long-awaited vision and transit-centric dream for Fort Lauderdale to life.”
All Aboard Florida is an intercity rail passenger service being developed by Florida East Coast Industries, Inc. that will connect Miami to Orlando with intermediate stations in Fort Lauderdale and West Palm Beach.
The Association of American Railroads (AAR) has reported increases for U.S. rail traffic in both carload and intermodal volumes for October 2014 when compared with October 2013, with monthly intermodal traffic the highest ever recorded for the U.S. rail industry.
U.S. carload originations increased by 4.4 percent, or 63,881 carloads, compared with October 2013, with October 2014 totals at 1,507,917 carloads. The October weekly carload average of 301,583 marked only the third time since 2008 that weekly carloads averaged more than 300,000 units.
Intermodal traffic for October reached a record total of 1,381,749 containers and trailers, a 4.9 percent increase, or 64,071 units, over October of last year. October was also the 59th straight month of year-over-year intermodal increases, with a record 11,459,079 units, an increase of 5.5 percent over 2013.
“America’s railroads are moving an enormous amount of freight today,” said John T. Gray, AAR senior vice president. “In the first 10 months of 2014, total U.S. carload plus intermodal volume was 24.3 million units, which is over one million units more than in the first 10 months of 2013 and the highest year-to-date total since 2007.”
Fifteen of the 20 commodity categories tracked by the AAR each month saw year-over-year carload increases in October. Commodities with the largest carload increase in October 2014 over October 2013 included coal, up by 3.9 percent, or 21,010 carloads; petroleum and petroleum products, up 20.7 percent, or 14,053 carloads; crushed stone, sand and gravel, up by 10.4 percent, or 11,880 carloads; metallic ores, up by 11.4 percent, or 4,161 carloads; and grain, up by 15 percent, or 114,900 carloads.
Excluding coal, U.S. rail carloads were up 42,871 carloads, or 4.7 percent, in October 2014 over October 2013. Excluding coal and grain, carloads were up 43,237 carloads, or 5.4 percent, for the month.
The AAR also reported a 5.1 percent increase in total combined U.S. weekly rail traffic for the week ending November 1, 2014, when compared to the same week in 2013, with 585,208 carloads and intermodal units reported.
U.S. carloads, with a reported total of 305,389 for the week, increased 4.3 percent compared to the same week last year. U.S. intermodal volume increased 5.9 percent for the week, with a total of 279,819 units reported.
Eight of the 10 carload commodity groups that are tracked by AAR posted increases compared with the same week in 2013. Petroleum and petroleum products showed the highest increase, up 20.4 percent, with 16,447 carloads. Metallic ores and metals increased by 20.1 percent, with 28,303 carloads, and grain increased by 14.5 percent, with 23,847 carloads.
U.S. railroads reported a 4.5 percent increase in total combined traffic for the first 44 weeks of 2014 when compared to the same period in 2013, with a total volume of 24,289,819 carloads and intermodal units. U.S. carloads, with a reported total of 12,830,740, increased 3.6 percent. U.S. intermodal volume, with a total of 11,459,079 units, increased 5.5 percent.
Canadian railroads reported an increase of 4.4 percent in carloads and an increase of 10 percent in intermodal units for the week ending November 1, 2014, when compared to the same week in 2013. Weekly 2014 totals were 86,893 carloads and 60,312 intermodal units.
For the first 44 weeks of 2014, Canadian railroads reported a cumulative volume of 3,542,923 carloads, an increase of 1.9 percent when compared to the same time period last year. An increase of 6.7 percent was reported for intermodal units, with a total of 2,525,718 units.
Mexican railroads reported an 8.7 percent decrease in carloads for the week ending November 1, 2014, compared to the same week in 2013, with 14,247 carloads. Intermodal units saw a 6.7 percent increase, with 10,632 units reported.
For the first 44 weeks of 2014, cumulative carload volume on Mexican railroads increased3.1 percent when compared to the same time period in 2013, with a reported 694,461 carloads. Intermodal units increased 5.1 percent, with 470,354 units reported.
On the 13 reporting U.S., Canadian and Mexican railroads, combined North American rail carload volume for the first 44 weeks of 2014 was 17,068,124 carloads, an increase of 3.2 percent compared with the same time period last year. Intermodal trailers and containers totaled 14,455,151 units, up 5.7 percent.