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February 2017 |

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On the Cover The U.S. Capitol Building. Photo: Shutterstock Railway Age Magazine (Print ISSN 0033-8826; Digital ISSN 2161-511X), (USPS 449-130), (Canada Post Cust. #7204564; Agreement #40612608; IMEX PO Box 25542, London, ON N6C 6B2, Canada) is published monthly by Simmons-Boardman Publishing Corp., 55 Broad St., 26th Floor, New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 218, No. 2. Printed in the U.S.A. Periodicals postage-paid at New York, NY and additional mailing offices. SUBSCRIPTIONS: Qualified individuals in the railroad industry may request a free subscription. Pricing for non-qualified subscriptions, printed and/or digital version: $100.00 per year/$151.00 for two years in the U.S./Canada/Mexico; $139.00 per year/$197.00 for two years, foreign. Single copies are $36.00 each. Subscriptions must be paid for in U.S. funds only. COPYRIGHT © Simmons-Boardman Publishing Corporation 2017. All rights reserved. Contents may not be reproduced without permission. For reprint information, contact PARS International Corp., 102 W 38th St., 6th Floor, New York, NY 10018. Phone (212) 221-9595. Fax (212) 221-9195. For subscriptions and address changes, please call (800) 895-4389 or (402) 346-4740; Fax (402) 346-3670; e-mail; or write to: Railway Age Magazine, SimmonsBoardman Publishing Corp., PO Box 3135, Northbrook, IL 60062-3135. POSTMASTER: Send address changes to Railway Age Magazine, PO Box 3135, Northbrook, IL 60062-3135. February 2017 Railway Age 1

From the Editor William C. Vantuono

More infrastructure? Less regulation? At what cost?


here is growing concern about the potentially harmful effects President Donald J. Trump’s policies on trade and immigration could have on the U.S. railway industry. Say that again? Just hear me out. Global-scale protests aside, much excitement has been generated in our industry about the President’s plan to spend more than $1 trillion on improving the nation’s infrastructure. There’s also a lot of glee over his plans— for better or for worse—to roll back or at least soften regulation. In his Jan. 20 Inaugural Address (At least I think it was an Inaugural Address, though it sounded more like a campaign speech), Trump did sneak in the word “railways,” at the very end of one section: “We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation.” Sounds pretty good, eh? I wonder, though, who will pay for everything, and with what? Lower taxes? The numbers don’t seem to add up. But what do I know? The accolades and platitudes came fast and furious as soon as Elaine Chao was sworn in as USDOT Secretary. From the American Public Transportation Association: “We look forward to working with Secretary Chao on President Trump’s infrastructure initiative. . . . Federal investment in public transportation is a bipartisan issue that our national leaders and the American people suppor​t. We are encouraged that the Trump Administration is considering including public transportation funding as part of this new infrastructure package. Also, we are pleased that Secretary Chao said that securing sustainable funding for the Highway Trust Fund is a top priority for the Trump Administration.” The Association of American Railroads had this to say about the Trump Administration’s stance on regulations: “The freight rail industry is pleased to see continued discourse and action regarding 2

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February 2017

our nation’s regulatory system. Regulators too often today lose sight of clearly defined end goals that would ultimately benefit the general population. We ought to propose more desired results and less prescribed means to that end. We believe that a more nimble regulatory structure will foster greater economic growth and we are excited to partake in this important effort to improve the regulatory system. “That is why the freight rail industry continues to offer principles for reform, including that rules should be based on a demonstrated need, as reflected in current and complete data and sound science; and non-prescriptive regulatory tools, like performance-based regulations, should be deployed wherever possible to align the interests of the regulator and the industry, and to foster and facilitate innovation to achieve well-defined policy goals.” All well and good. But, here’s what’s really bugging me: “We will follow two simple rules: Buy American and hire American.” Wait just a moment, Mr. President. Think about the potential implications and unintended consequences of what you said. This is the 21st century, and the U.S. economy is part of a massive, interconnected global system, a giant, living machine. Our railroads are conveyor belts, if you will, churning away deep inside that machine. In North America, railroads operate seamlessly across borders. Many of our suppliers (carbuilders in particular) engage in manufacturing in Mexico and Canada, providing good jobs and quality products. Some of our greatest research and development and engineering minds come from Middle Eastern countries. These folks aren’t terrorists. They’re people with families who happen to love the United States of America. Do you really think dismantling NAFTA, imposing trade tariffs and restricting entry into the U.S. is the right thing to do?

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MAJOR U.S. RAILROADS by Commodity Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron and Steel Scrap Motor Vehicles and Parts Crushed Stone, Sand, and Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads Total U.S. CarLoadS

DEC. ’16 91,039 3,620 36,625 22,967 121,327 40,722 328,605 4,528 11,363 23,410 19,551 16,556 33,003 12,493 64,522 67,796 16,087 24,113 15,114 20,201 973,642

DEC. ’15 82,376 2,962 35,559 22,788 116,728 49,290 315,245 4,814 10,755 23,465 20,433 14,666 31,777 10,122 61,272 70,685 15,318 25,218 12,556 21,466 947,495

% CHANGE 10.5% 22.2% 3.0% 0.8% 3.9% -17.4% 4.2% -5.9% 5.7% -0.2% -4.3% 12.9% -3.9% 23.4% 5.3% -4.1% 5.0% -4.4% 20.4% -5.9% 2.8%








Chemicals Coal Crushed Stone / Sand / Gravel Food & Kindred Products Grain Grain Mill Products Lumber & Wood Products Metallic Ores Metals & Products Motor Vehicles & Equipment Nonmetallic Minerals Petroleum Products Pulp, Paper & Allied Products Stone, Clay & Glass Products Trailers / Containers Waste & Nonferrous Scrap All Other Carloads




DEC. ’16 101,895 909,975 1,011,870

DEC. ’15 94,007 815,648 909,655

% CHANGE 8.4% 11.6% 11.2%

3,548 215,793 219,341

2,808 197,122 199,930

26.4% 9.5% 9.7%

105,443 1,125,768 1,231,211

96,815 1,012,770 1,109,585

8.9% 11.2% 11.0%


Source: Monthly Railroad Traffic, Association of American Railroads

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted)

% CHANGE 2.4% 2.3% -24.4% 1.4% 21.9% -4.7% -11.4% -61.5% -12.0% -1.7% -11.1% 1.6% -9.7% -1.7% 20.8% 3.1% 1.9%

DEC. 2016 - 329,890 DEC. 2015 - 329,043 300,000 310,000 320,000 330,000 340,000 350,000 360,000 370,000 380,000 390,000 Copyright © 2017 All rights reserved.

Railroad employment, Class I linehaul carriers, DECEMBER 2016 (% change from DECEMBER 2015)


ORIGINATED DEC. ’15 43,187 20,250 25,372 10,571 21,653 6,155 8,527 7,403 15,869 7,983 2,070 1,915 18,149 11,477 43,155 8,501 76,806



ORIGINATED DEC. ’16 44,205 20,714 19,176 10,716 26,389 5,868 7,551 2,850 13,971 7,850 1,840 1,946 16,394 11,284 52,118 8,768 78,250

BY Commodity

Transportation (train and engine) 59,481 (-7.13%)

Executives, Officials, and Staff Assistants 8,986 (-6.20%)

Professional and Administrative 13,124 (-7.54%)

Total employees: 150,215 % change from DEC. 2015: (-6.58%) Transportation (other than train & engine) 5,922 (-10.97%)

Maintenance of Equipment and Stores 28,298 (-6.92%)

Maintenanceof-Way and Structures 34,404 (-4.22%)

Source: Surface Transportation Board

class I employment dROPS across-the-board in december Figures released by the STB show Class I total railroad employment declined 6.58% in December 2016, measured against December 2015. In contrast with moderate declines in November, all six employment categories fell year-on-year, the steepest by Transportation (other than train and engine) at -10.97%. Maintenance-of-Way and Structures employment weakened the least, -4.22%, after suffering the greatest losses, 2.20%, in November. 4

Railway Age

February 2017

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Industry Outlook STB approves GWI acquisition of P&W

First Brightline trainset unveiled

Florida’s soon-to open Brightline unveiled its first higher-speed trainset on Jan. 11. Comprised of two diesel-electric Charger locomotives and four coaches, the trainset is housed at a new railroad operations facility, Workshop b, in West Palm Beach, Fla. It was manufactured by Siemens at the company’s 60-acre rail manufacturing hub in Sacramento, Calif. Siemens says the trainset “is 100% Buy America-compliant, using components from more than 40 suppliers across more than 20 U.S. states.” Four additional trainsets are being built. Brightline expects delivery of these trainsets by Spring 2017. The first trainset has begun testing on a 10-mile test track south of Workshop b. Construction of Brightline’s train stations in West Palm Beach, Fort Lauderdale and Miami is nearing completion. Brightline is scheduled to begin express intercity service between Miami, Fort Lauderdale and West Palm Beach this summer, on improved Florida East Coast Railway right-of-way. Brightline is the name of the service, which is operated by Florida East Coast Industries subsidiary All Aboard Florida.

PANYNJ drafts $32 billion capital plan The Port Authority of New York and New Jersey last month issued a $32 billion draft 2017-2026 Capital Plan for public comment and review. The review process will include the first-ever Capital Plan public meetings in both states that will be attended by at least one commissioner from each state. The plan outlines new major capital projects the agency will invest in over the next 10 years, including $3.5 billion for a new Port Authority Bus Terminal; $2.5 billion for the redevelopment of John F. Kennedy International Airport and a new AirTrain system to serve LaGuardia Airport; $2.3 billion to support the redevelopment of Terminal A at Newark Liberty International Airport; $600 million for the redevelopment of LaGuardia Airport’s Terminals C and D; and $1.7 billion to build a new connection linking 6

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February 2017

PATH trains to Newark Liberty International Airport’s Rail Link Station. The plan also includes $7.6 billion to finish projects currently in construction, such as the Bayonne Bridge, Goethals Bridge, PATH’s signal replacement and modernization (CBTC) program, upgrades to the Harrison and Grove Street PATH stations, and the port and rail cargo facility at Greenville Yard. Of that $7.6 billion, $2.5 billion will support LaGuardia Airport’s ongoing Terminal B redevelopment project. The draft Capital Plan includes $2.7 billion toward the payment of debt service for the Trans-Hudson rail tunnel link between New York and New Jersey. That includes an already approved $302 million toward debt service on the Gateway Development Program’s Portal Bridge North project.

The Surface Transportation Board on Dec. 15, 2016 granted Genesee & Wyoming Inc. (GWI) authority to acquire control of Providence & Worcester Railroad Co. (P&W). STB said it will grant GWI’s petition for exemption, “subject to standard labor protective conditions (New York Dock Railway; Brooklyn Eastern District Terminal) and the condition that GWI will not interfere with the ability of Springfield Terminal Railway to interchange with CSX in Worcester, Mass.” Upon consummation, P&W will be the surviving entity and will become a wholly owned subsidiary of GWI. P&W connects with several railroads, including two GWI subsidiaries, New England Central Railroad, Inc. (NECR), and Connecticut Southern Railroad, Inc. (CSO). GWI said that, although there are some commonly served cities and towns, there are no customers that are served solely by NECR and CSO or P&W, and that as such there will be no “2-to-1 customers” as a result of the proposed transaction. GWI stated that it does not contemplate any material changes to P&W’s operations, maintenance, or service. GWI also stated that P&W and NECR are part of the “Great Eastern Route” strategic alliances. According to GWI, the Great Eastern alliances furnish P&W with pricing authority for service with CN through an arrangement by which NECR provides haulage for P&W between East Alburg, Vt. and Willimantic, Conn. on certain contractually agreed commodities. GWI said that P&W expanded the Great Eastern Route by entering into an additional strategic alliance with Vermont Rail Systems (VRS), which furnishes P&W with pricing authority for service with Canadian Pacific through an arrangement by which VRS and NECR provide haulage for P&W between Whitehall, N.Y. and Willimantic, Conn., on certain contractually agreed commodities. GWI stated that its present intention is to keep these strategic alliances, and the connections with CN and CP, in place.


Alstom lands Ferromex locomotive contract Ferromex has awarded Alstom a contract to provide maintenance for 219 freight locomotives for a five-year period. The locomotives will be maintained at Ferromex depots located in Torreon, Chihuahua and Guadalajara, Mexico. The project is expected to generate 150 direct jobs. Services include application of CBM (condition-based maintenance) technologies, and oil and vibration analyses. Alstom expects the implementation of remote monitoring, asset support and predictive analytics solutions to reduce operational costs. “We are honored that Ferromex, for which we are maintaining more than half of its locomotives, is renewing its trust in Alstom’s services,” said Rodelmar Ocampo, Managing Director of Alstom Mexico. “This award also illustrates Alstom’s commitment to support Mexico’s mobility projects for a more efficient, more reliable, more sustainable transport network.”

North America Sumitomo Mitsui Banking Corp.’s (SMBC) railcar operating lessor and fleet management business, SMBC Rail Services LLC (SMBC Rail), has signed an agreement to purchase American Railcar Leasing LLC (ARL) from Icahn Enterprises L.P. Wabtec Corp. has acquired Workhorse Rail LLC, a supplier of engineered freight car components, mainly for the aftermarket. Trackmobile and Rail Safe Training, Inc. formeda new safety partnership. Every new Trackmobile railcar mover sold will now come with complimentary rail safety training from Rail Safe Training, in addition to the Trackmobile operator training provided by the Trackmobile dealer. The American Short Line and Regional Railroad Association (ASLRRA) selected Georgetown Rail Equipment Company (GREX) as a 8

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February 2017

preferred provider in the association’s Member Discount Program. Siemens delivered its first new S200 LRV to the San Francisco Municipal Transportation Agency (SFMTA). This is the first of 215 LRVs to arrive from the Siemens plant in Sacramento, Calif., en route to begin testing and service later this year. The Kansas City Streetcar Authority (KCSA), in coordination with Port KC and the KCATA, selected a team led by Burns and McDonnell to conduct a Streetcar Riverfront Extension and Multi-Modal Feasibility Study to assess multi-modal transportation needs and a potential northern riverfront extension of the Kansas City Streetcar. OmniTRAX Canada entered into a memorandum of understanding with the Mississippi Rail Consortium to commence the transfer of ownership in its Manitoba assets. Union Pacific acquired Railex LLC’s refrigerated and cold storage

distribution assets in Delano, Calif.; Wallula, Wash.; and Rotterdam, N.Y. The acquisition does not include Railex Wine Services LLC. The New York Metropolitan Transportation Authority awarded a $223.3 million contract to L.K. Comstock & Company Inc. to upgrade the New York City Transit Queens Boulevard Line (QBL) signaling system and install communications-based train control (CBTC).

Worldwide: Santiago Metro, principal member of the Latin American Association of Mehn Networks & Subways (Alamys), won a contract from the Colombian Ministry of Transport to assist with a project to develop the Bogota Metro. The Secretariat for Urban Development in the Brazilian state of Bahia has launched a consultation on a PPP to build, operate and maintain an 11.5mile LRT in Salvador, the state capital.

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ew Year’s Day, 2017: Nearly 88 years after the first bond issue was floated to finance construction of a subway under Second Avenue on New York City’s East Side, the first MTA New York City Transit Q Trains began rolling between 63rd and 96th Streets on the Second Avenue Subway. Thousands attended the inauguration of revenue service. The nearly-two-mile, $4.4 billion Phase 1 segment adds new stations along Second Avenue at 96th, 86th and 72nd streets and a new connection to the Lexington Avenue Line (4-5-6 Trains) at 63rd Street. The Q Train now operates between Coney Island in Brooklyn and 96th Street. Phase 2, estimated to cost $1.5 billion, will extend the line up to 125th Street. The Second Avenue Subway was conceived in 1919, and the first construction bond issue occurred in 1929. There had been three prior groundbreakings for this massive project. Each one ended rather unceremoniously when the city and the MTA (or one of its predecessor agencies) ran out of funds. In the meantime, MTA New York City Transit’s Lexington Avenue Line (the 4, 5 and 6 trains) gradually became one of the busiest, most overcrowded subway lines in the world. Historians recall that New York City’s Second and Third Avenue elevated


Railway Age

February 2017

lines were torn down in the 1940s, as they were supposed to be replaced with the Second Avenue Subway. The tunnels for Phase 1 were constructed using a combination of cut-and-cover, tunnel boring and controlled blasting. The tunnel boring machine traveled 50 feet per day on average. The tunnels consist of two 7,800-foot bores, each 22 feet in diameter and an average 80 feet deep. They required excavation of 583,700 cubic yards of rock and 460,300 cubic yards of soil. Most of this material was recycled and used as fill for abandoned mines, artificial reefs, bulkhead reinforcements or road paving. More than 260,000 cubic yards of concrete, 48.9 million pounds of rebar, 40.7 million pounds of structural steel and 1.25 million square feet of waterproofing material were used in construction. Phase 1 includes 22,000 feet of track, all of it low-vibration and low-noise, thanks to a new method of directfixation track construction, where the concrete pads that function as ties are not integral with the concrete-slab foundation. Instead, the ties are individual concrete castings, fastened to the foundation, with an elastomeric pad sandwiched in between. Pandrol clips hold the continuous welded rail to the ties, while an aluminum/composite third-rail provides traction power. For

now, the Second Avenue Subway is equipped with New York City Transit’s traditional fixed-block signaling system, with wayside automatic block signals and trip stops. Communications-based train control (CBTC) is down the line, with several major CBTC deployments under way at NYCT. Phase 2 of the Second Avenue Subway is expected to cost $1.5 billion. It will continue northward from 96th St. up to 125th St. When completed sometime in the 2020s, the entire line will stretch from 125th St. at its northernmost point all the way down to the financial district at the tip of Manhattan. For now, the Second Avenue Subway is an extension of the current Q Line, which originates in Coney Island, Brooklyn. The Federal Transit Administration signed an FFGA (Full Funding Grant Agreement) with the MTA in 2007 to build the Second Avenue Subway. More than 155,000 people a day are using the Second Avenue Subway. Ridership has grown steadily by approximately 8,000 daily riders per week since Jan. 1.While it is helping ease congestion on the Lexington Avenue Line by absorbing some of the NYCT’s 5.9 million daily riders, it is no doubt attracting new ridership. For now-retired MTA Chairman and CEO Tom Prendergast (below), Railway Age’s 54th Railroader of the Year, the Second Avenue Subway is a milestone achievement in his distinguished career.

Upper left: Joseph M. Calisi. Lower right: William C. Vantuono

Second Avenue Subway open for business

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Perfecting Railcar Performance

Greenbrier off to “a strong start”

The Greenbrier Companies Inc. last month reported financial results for its first fiscal quarter ended Nov. 30, 2016. The company said it is off to a strong start, with net earnings of $25.0 million, or $0.79 per diluted share, on revenue of $552.3 million. Adjusted EBITDA for the quarter was $85.7 million, or 15.5% of revenue. Cash provided by operating activities totaled $29.0 million for the quarter. Diversified orders for 2,400 new railcars were received during this quarter, valued at more than $230 million, or an average price of approximately $98,000 per railcar. The new railcar backlog as of Nov. 30, 2016 was 25,800 units with an estimated value of $2.97 billion (average unit sale price of $115,000). Included in backlog are 3,800 covered hopper railcars for use in energy related sand transportation, of which 2,500 units, scheduled for production in 2018, are for a customer who is negotiating with Greenbrier to modify the order. New railcar deliveries totaled 4,000 units for the quarter, compared to 4,600 units for the quarter ended Aug. 31, 2016. The Marine backlog as of Nov. 30, 2016 was approximately $103 million. The company’s Board declared a quarterly dividend of $0.21 per share, payable on Feb. 16, 2017 to shareholders 12

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February 2017

as of Jan. 26, 2017. Greenbrier is also negotiating to exercise its option to increase its equity position in Brazilian railcar manufacturing joint venture, Greenbrier-Maxion, to 60%. William A. Furman, Chairman and CEO, said, “Greenbrier’s fiscal 2017 is off to a strong start with solid financial performance delivered during a demanding first quarter. We had healthy manufacturing margins on lower deliveries, a testament to the strength of our manufacturing and leasing operations. We continue to execute on our strategy of focusing on our core North American operations while pursuing targeted investments in international markets. “Brazil’s economic, business and political conditions have improved and forecasts indicate continued GDP improvement in 2017. Greenbrier’s operations in Brazil and our relationship with our partners continue to grow. For the quarter ended Nov. 30, 2016, our Brazilian railcar manufacturing joint venture Greenbrier-Maxion received orders and awards for more than 2,000 railcars, which are not included in Greenbrier’s reported orders. We have accelerated discussions to increase our interest in the Brazil operations with an incremental investment of nearly $24 million.

“As we pursue investments in growth opportunities, our solid financial returns in our core business in North America and internationally along with our strong balance sheet remain critical. These provide us the flexibility to compete effectively today while continuing to invest domestically and internationally for tomorrow. In addition, changes in the global trade environment will require robust risk management. “Based on our first quarter results, communications with customers and production schedules in North America, we are reaffirming our guidance for the year. We will continue to seek opportunities to diversify by accessing new global markets, while streamlining our cost structures to maximize profitability in North America.” Based on current business trends, industry forecasts and production schedules for fiscal 2017, Greenbrier believes that deliveries will be approximately 14,000-16,000 units. Revenue will be $2.0-$2.4 billion. Diluted EPS will be in the range of $3.25 to $3.75. “Greenbrier’s adjusted EBITDA was largely in line with our estimate and well above consensus,” said Cowen and Company analyst Matt Elkott. “Deliveries were just above our estimate, and orders of 2,400 railcars exceeded our 2,100unit forecast. The ending backlog was just slightly above our estimate, and the backlog value and ASP were largely in line with our projections. The backlog includes 2,500 frac sand cars under order modification negotiations. “The company’s maintained $3.50 FY17 EPS guidance midpoint is in line with our estimate (established July 7), which is above the street estimate of $3.37. The consensus estimate has fluctuated quite a bit in the last couple of quarters, going from above our aforementioned estimate to well below it recently. The company’s affirmed guidance midpoint for FY17 railcar deliveries is also in line with our model projection of 15,000 units. The revenue guidance midpoint of $2.20 billion is also in line with our estimate and above consensus of $2.06 billion. We view

William C. Vantuono


these results fairly favorably as the company beat consensus on revenue, gross margin, operating income, and EBITDA. It also received solid orders and maintained its guidance. The EPS miss appears to be largely attributable to a loss from unconsolidated affiliates. What is likely to concern investors is more questions regarding the remaining frac sand cars in the backlog. GBX noted that its backlog includes 3,800 frac sand cars, of which 2,500 units, scheduled for production in 2018, are for a customer who is negotiating with the company to modify the order. In fiscal 4Q16, GBX

removed 1,200 frac sand cars from its backlog but received a negotiated payment from a customer. “GBX received orders for 2,400 railcars in fiscal 1Q17, compared to our estimate of 2,100 units and 2,300 units in fiscal 4Q16. Deliveries were 4,000 units, compared to our 3,900-unit estimate and 4,600 units in fiscal 4Q16. This puts the railcar backlog at the end of November at 25,800 units, compared to our estimate of 25,500 units and 27,500 units at the end of 4Q16. For fiscal 1Q17, GBX reported Adjusted EBITDA of $85.7 million, vs. our and

consensus estimates of $85 million and $71 million, respectively. Fiscal 4Q16 EBITDA was $104.3 million. Revenue came in at $552.3 million, compared to our and street projections of $547.4 million and $489.4 million, respectively. Fiscal 4Q16 revenue was $595.1 million. Operating income was $72.7 million, vs. our and consensus estimates of $67.9 million and $56.9 million, respectively. Fiscal 4Q16 operating income was $83.5 million. The gross margin was 20.4%, compared to our 19.6% estimate and the 18.1% consensus forecast. The fiscal 4Q16 gross margin was 20.1%.”


BNSF plans $3.4 billion in 2017 capital spending BNSF’s 2017 capital expenditure plan will be approximately $3.4 billion. Similar to last year’s $3.9 billion plan, the largest component will be to replace and maintain BNSF’s core network and related assets. This year that specific component is expected to be in the $2.4 billion range. BNSF says the projects included in this part of the plan will primarily be for replacing and upgrading rail, rail ties and ballast and maintaining rolling stock. This year’s maintenance program will include approximately 20,000 miles of track surfacing and/or undercutting work and the replacement of about 600 miles of rail and nearly 3 million crossties. Rounding out the plan will be $400 million for expansion projects, $100 million for the implementation of


Positive Train Control and $400 million for locomotives, freight cars and other equipment acquisitions. The states on the BNSF network estimated to receive the largest investments this year include Texas, $255 million; Illinois, $190 million; Washington, $175 million; California, $170 million; Kansas, $125 million; Missouri, $120 million; and Montana and Nebraska, $100 million each “Each year we establish a capital plan that reflects the future needs of our customers and the constant need to keep our infrastructure in good working condition,” said BNSF President and CEO Carl Ice. “This year’s capital plan ensures we continue to operate a safe and reliable rail network while capturing the new opportunities our customers will

present to us. Our ongoing investments, along with the outstanding efforts of our employees, resulted in the lowest number of derailments in company history last year. The strength and condition of our railroad today gives us the confidence that we will operate safely in the communities we serve and meet our customers’ expectations of reliable and consistent service.”


February 2017 Railway Age 13

Perspective: Short Line & Regional Linda Darr

Creating the path forward at ASLRRA


s we watched the renewal of our nation’s democratic process unfold beginning with the November election and subsequent activity to build an Administration that will guide the country forward, the American Short Line and Regional Railroad Association also began an important process—the development of a strategic plan—last month. With the seating of a new ASLRRA Board Chair, Judy Petry (President and General Manager at Farmrail System, Inc.), and Vice-Chair Peter “Doc” Claussen (Chairman at Gulf & Ohio Railways Inc. and KLW) in April of last year for three-year terms, the timing was optimal to begin a period of reflection on what makes our Association so special and relevant— what are the meaningful services we provide to our members, and indeed the industry—and where we could grow in services and leadership in the coming years. Members representing our industry founders, current industry leaders, and our future leadership met to begin what will be a series of sessions to build our future together. During a two-day meeting in Boca Raton, Fla., team members were active participants in presentations by outside experts who briefed the group on the state of play of the association community in today’s changing political landscape and the challenges and financial outlook for the railroad industry generally. Survey results from our membership were shared with the group, outlining where we are already doing well, and where we might consider doing things differently. We were fortunate to receive detailed and forthright feedback from survey participants. There was much to be proud of with more than 85%


Railway Age

February 2017

telling us it was easy to justify our Association’s dues! Members also told us that they were concerned about a variety of external issues that may impact their day-to-day businesses listing increased regulations, increases to truck size and/or weight, and implementation of complex regulations such as PTC as leading concerns. Our members understand that they are the economic engine for industrial development in their towns and rural areas, they provide service in areas that

With a new Congress, it is imperative that we get out and tell our story. are often underserved, provide connections to other means of transportation, and have strong relationships within their communities. And they want their seat at the table—as well they should being 38% of track-miles in the U.S., serving more than 7,200 customers in a myriad of industries, providing rail service in 49 states. Relationships with Class Is remain critically important. Carload traffic is the lifeblood of our industry, and short lines provide the first-and-last mile movement for one in four cars moving on the U.S. freight rail system. We are the face of freight rail in our communities and with our customers. Ensuring that the Class I’s view us as partners in providing rail service to our mutual customers is an

ongoing objective. Our Industry Founders group will continue their work with a series of listening sessions and meetings with stakeholders and members. Our Industry Leaders will visit Washington to hear from industry, regulatory, association, and political leadership. Our Future Leaders will be engaging with one another and other members on a variety of issues. A final report will be presented to the Board and shared with our members later in the year. What I do know at this juncture is that we are operating in an increasingly complex transportation world, being challenged to consider driverless vehicles and platooning trucks, drone deliveries and more. The competition is evolving, and although we have successfully held off truck size and weight increases, we know that this issue will continue to come forward. The application of new technology , whether required by regulation, or sought out for particular business gains will no doubt be a continual presence and challenge in our future. It will be imperative with a new Congress to get out and tell our story. The railroad industry’s most important legislative meeting of the year is the March 2nd Railroad Day on the Hill. It is the best opportunity of the year to get railroad issues in front of Congress. Railroad day brings over 300 railroad industry representatives to Capitol Hill to participate in over 350 Congressional meetings that center on issues like the short line tax credit, truck size and weight and railroad regulation. It is a very important lobbying day for our industry but it only works if the industry turns out as a whole. I hope I will see you there.

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Congress 2017:

A noisy hall with a nightly brawl

By FRANK N. WILNER, Capitol Hill Contributing Editor

With early indications that the Trump Administration is a political version of the Jerry Springer show, expect an atypical legislative session, with the Republican majority sometimes in open conflict with a Republican President who is unpredictable, impetuous, lacking previous government experience and quick to take vengeance on those critical of him.


ontrary to Republican orthodoxy of less federal spending, free trade and limited government, President Donald J. Trump advocates a budget-busting infrastructure program, imposition of trade barriers and Presidential intrusion into corporate decision-making from a bully pulpit and Twitter account. Brewing on Capitol Hill is a noisy hall with a nightly brawl. On some issues, railroads are in harm’s way, but legislative gains also are probable. As for the railroads’ two principal regulatory

16 Railway Age February 2017

agencies—the Federal Railroad Administration (FRA) and Surface Transportation Board (STB)—both soon will be under new Republican control to decide issues of significant dollar importance to railroads. Favorable to railroads is that the new Congress and its leadership are mostly unchanged. Recall that the 2015 Surface Transportation Board Reauthorization Act, largely a creation of then and current Senate Commerce Committee Chairman John Thune (R-S.D.), preserved the partial

economic deregulation delivered in the 1980 Staggers Rail Act, and was markedly less draconian than what his predecessor, Jay Rockefeller (D-W.Va.) unsuccessfully advocated when Democrats controlled the Senate. As for Amtrak subsidies, it’s a hard sell no matter which political party is in control. Indeed, Democrat Bill Clinton zeroed-out Amtrak in one White House budget proposal. Here is a summary of other issues important to railroads: INFRASTRUCTURE INVESTMENT: An early congressional

fracas will involve Trump’s promise of $1.3 trillion in infrastructure spending over 10 years, but whose revenue source is opaque. Railroads support the plan. Part of the bounty will renew and improve roads, bridges, tunnels, transit and Amtrak’s Northeast Corridor, delivering to freight railroads meaningful boosts in construction materials haulage, and improving highway links between intermodal terminals and ports. Trump envisions public-private partnerships encouraged by $137 billion in tax credits. Transportation Secretary Elaine Chao calls it “a heavy lift,” as even minor federal financial participation may require deficit spending that Senate Majority Leader Mitch McConnell (R-Ky.), Chao’s husband, said he will not support. House Transportation & Infrastructure (T&I) Committee Chairman Bill Shuster (R-Pa.) says realistic payment details must come first. A Democratic alternative to Trump’s plan, which relies mostly on deficit spending, surely is doomed. The problem with increased federal spending unsupported by budget-balancing increased taxes following years of deficit spending is that it will fuel inflation and lead to higher interest rates that then discourage job-creating capital spending. Increasingly disturbing on Capitol Hill is rising federal debt. It soared from $8 trillion in 2006 to more than $19 trillion today, a sum that is 104% of gross domestic product—up from 65% a decade ago, and well above Germany’s 71% and the UK’s 89%. Even absent new spending on infrastructure, the non-partisan Congressional Budget Office estimates federal debt will climb another $9 trillion by 2027. Yet budget-balancing tax hikes to accompany new spending programs will be challenging in the extreme. Most Republican lawmakers have signed a blood-oath pledge to oppose every tax increase proposal, notwithstanding that tax aversion is an indulgence, and infrastructure investment a long-term societal benefit paying substantial downstream economic dividends.

TRADE BARRIERS: Railroads stand to suffer from abandonment of a Trans-Pacific Trade Partnership, a gutting of the North American Free Trade Agreement, and Trump’s desire to boost tariffs on imports from China and Mexico that, in fact, will be paid by U.S. consumers. In his inaugural address, Trump said, “Protection will lead to great prosperity and strength.”Yet history records that the 1930 Smoot-Hawley tariff hikes (lower than sought by Trump) spawned retaliatory moves, causing U.S. exports overall to decline by 61% (82% to Europe), contributed to the Great Depression and fueled political extremism worldwide that sowed seeds of World War II. Construction of trade walls rather than bridges invites trade

wars that risk forcing consumer prices higher, can shrink intermodal container traffic, threaten export coal and grain traffic, further eviscerate rail employment that will test the financial integrity of the Railroad Retirement and Railroad Unemployment systems, and likely upset just-in-time global supply chains. On tariff hikes, not all Republicans are fellow travelers. House Speaker Paul Ryan (R-Wis.) said, “More trade means more people from every country, buying, selling, investing, creating—all working together to build a better world.” FedEx CEO Fred Smith, who could equally be speaking for rival UPS, said, “The United States being cut off from trade would be like trying to breathe without oxygen.” In fact, most U.S. job losses are not the result of unbalanced trade, nor is America, as Trump asserts, a land of “rusted-out factories.” America now manufactures 85% more goods than in 1987, but with 66% of the workers, says the Bureau of Labor Statistics. Most domestic employment losses are traceable to technological advances. Railroads, for example, have shed almost 700,000 jobs since 1960 even as ton-miles hauled doubled, owing to mechanization, automation and cybernation. Related to free trade issues is concern over Chinese investment in U.S. rail suppliers, especially after the Treasury Department’s Committee on Foreign Investment in the U.S. (CFIUS) rejected complaints related to Chinese financial control of Wilmington, Del.- based Vertex Railcar, which in 2016 began competing with six other manufacturers. Initiating that investigation was a bipartisan group of 100 House and Senate members anxious that China Railroad Rolling Stock Corp.—the world’s largest and four-times the size of the U.S. sector—may transfer Vertex freight car production to China, using subsidized Chinese steel and low-wage labor to undercut prices of competitors. Expect a legislative effort to make CFIUS guidelines comport more with Trump’s “America First” mantra. TAX POLICY

is another thorny issue affecting railroads, which support Republican efforts to reduce the current 35% statutory corporate tax rate. Such is expected to induce multi-national U.S.-based industries, now parking profits abroad in lower-tax havens, to repatriate them for jobcreating domestic investment, which could generate more rail traffic. Muddying that objective are antitrade policies. As Mexico’s peso weakens against the dollar, the lure to invest in Mexico, driven by Adam Smith’s invisible hand more than Trump’s clenched fist, grows even stronger. Railroads, as most American corporations, don’t pay the statutory 35% tax rate frequently cited as infamously high compared to other developed nations. Owing to deductions and deferments, the average cash-taxes-paid rate for CSX, Norfolk Southern and Union Pacific over the past three years is around 26%. As for short lines, their special-interest 50% investment tax credit could disappear under tax reform, perhaps making their effective tax rate higher. Short line holding company Genesee & Wyoming, for example, has a three-year average cash-taxes-paid rate of just 9.7%.

FELA: Since 1907, railroads have been subject to the Federal Employers’ Liability Act (FELA), a fault-based February 2017 Railway Age 17


injured-worker compensation scheme encouraging rail workers to sue employers for damages. Unlike no-fault state/federal worker compensation plans covering non-rail workers, FELA is a cesspool of favorable jury shopping and high-stakes courting of union bosses for client referrals, the latter of which has landed three rail labor presidents in federal prison. The Republican majority could fold FELA into state/federal worker compensation plans. COMPETITIVE EQUITY:

Big trucks pummel pavements and weaken highway bridges, shortening the lives of each while avoiding full payment for the damage caused. Skilful railroad lobbying could correct highway homicide by conditioning an infrastructure spending bill on revised user charges matching the cost of heavy-truck bridge and pavement damage. Republican opposition to higher taxes stands in the way, but the no-higher-tax pledge may be forced into hibernation if long-overdue highway revitalization is to occur. The pergallon federal fuels tax has not budged since 1993, creating a $16 billion annual gap in the Highway Trust Fund between user charge revenue and expenses as inflation eroded the purchasing power of the outdated fuels tax by 65% and vehicles became more fuel efficient. Competitive equity means a better method of matching big-truck user charges with cost responsibility; and

legislatively freezing current truck size and weight limits until such equity is achieved. FEDERAL RAILROAD ADMINISTRATION (FRA): Freight railroads seek two crucial outcomes under a Republicancontrolled FRA. One is to end efforts begun by a former administrator to require a minimum of two-person train crews without any evidence they are safer than engineer-only. While Rep. Don Young (R-Alaska), a former chairman of the House T&I Committee (2001-2007), has introduced legislation requiring two-person train crews, it is seen as a favor in exchange for long-standing political support by rail labor, and is unlikely to gain committee approval. The second is to reexamine a 2015 rule requiring installation of electronically controlled pneumatic (ECP) brakes on trains moving high-hazard flammable liquids. The FRA computed a negative 9-to-1 benefit/cost ratio for ECP brakes, and railroads fret that the $2 billion cost unnecessarily diverts investment from more effective safety efforts, as there have been no brake-related accidents involving crude oil or ethanol trains. SURFACE TRANSPORTATION BOARD (STB):

Most crucial to railroads is preserving Stand-Alone Cost (SAC) as the


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STB’s principal test for determining whether a freight rate is reasonable; and averting a ruling that railroads provide competitive switching, under limited conditions, at certain sole-served facilities to allow a shipper to use a competing railroad whose tracks are nearby (shippers want up to 30 miles or more). The objective is not necessarily to use the switching, but to create a competitive alternative at soleserved points to keep rates in check. As for SAC cases, shippers lacking effective alternatives to rail transportation fuss that having to spend $5 million to pursue SAC relief is unjustifiable. A Transportation Research Board (TRB) study concluded that the SAC test is “not working for shippers of most commodities, including grain.” When the STB recently changed evidentiary requirements mid-case, a shipper attorney said, “The world’s most complicated rate challenge process just keeps getting more complicated.” Among recommended substitutes is final-offer arbitration whereby each party submits their last best offer and the arbitrator chooses one over the other. As for competitive switching, the STB’s now Acting Chairman, Ann Begeman, questions its practical application and potential impacts (“We have to know more about what we are doing before we decide whether to do it”). The STB hasn’t yet investigated close cousins—Conrail Shared Assets Operations, Terminal Railroad Association of St. Louis and Belt Railway of

Chicago, all of which provide non-discriminatory switching to connecting railroads. And there is available for review a study of a neutral switching arrangement south of Pittsburgh that the STB’s Railroad-Shipper Transportation Advisory Council pursued in 1997. Supporting railroads, the principal author of the TRB study said, “We see no case now for wholesale competitive switching … We don’t know enough. We want to regulate against extreme abuses. We think it could be done better than it is— not tighter, but smarter.” But making the railroad argument more difficult is that competitive switching is standard in Canada; and industry celebrity and former Canadian Pacific (CP) CEO Hunter Harrison was content to volunteer it south of the border as a condition of a now tabled CP-Norfolk Southern merger. Harrison may soon take the reins at CSX. The three current STB members are in agreement to delay action on both issues until two vacant seats are filled. Expect lengthy litigation to follow, whatever the vote result. As Trump and congressional Republicans seek a pas de deux, and we await confirmation of a new Federal Railroad Administration chief and two new Surface Transportation Board members, expect railroads to be saying little as they take measure. History records railroads long at the top of the leader board. It hasn’t been by happenstance. RA

February 2017 Railway Age 19



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ailway Age editors, along with judges Nick Little, Managing Director of Michigan State University’s Railway Management Program, and Ronald L. Batory, President and Chief Operating Officer of Consolidated Rail Corp., have selected the winning 10 in Railway Age’s Fast Trackers–10 Under 40 contest. Representing the “best of the best,” these rising stars are making an impact in their respective fields. “I enjoyed taking part in the judging and am impressed to see so many good, younger people in the industry today; it bears well for the future,” said Little. “The quality of submissions this year was even better than last year and competition was very tough. I continue to be amazed by the competencies, leadership skills, and capabilities demonstrated. The quality of entries indicates that the future leaders for the rail industry are continuing to develop in their areas of expertise and experience. Additionally, we saw great evidence of their 22 Railway Age February 2017

impact on both the industry and society as a whole through service to the community at large and developing their colleagues. A common theme was apparent success at work achieved in many cases alongside a carefully managed work/ life balance, which is not easy to achieve in this industry.” Entries, who had to be under the age of 40 as of Jan. 1, 2017 and located within the 50 states, Washington, D.C., Canada and/or Mexico, came from freight and passenger railroads, suppliers and consultants/contractors. They were judged on criteria that included industry experience and education, leadership skills, industry contributions, and community service involvement. This year’s 10 finalists will be recognized at the annual Railroader of the Year Dinner, which will take place on March 14, 2017 at the Union League of Chicago, honoring Railway Age’s 54th Railroader of the Year, New York MTA’s Tom Prendergast.

Union Pacific

Railway Age’s Fast Trackers, 10 Rising Stars Under 40, are ten individuals under the age of 40 who have made an impact in their respective fields or within their company.

FAST TRACKERS 2017 Aaron Adams Project Manager, Herzog Contracting Corp.

Aaron Adams is a Project Manager at Herzog Contracting Corp., which is involved in new track construction, track maintenance and rehabilitation, station construction, signals and communications, bridge construction, and earthwork. He accumulated more than 20 years of experience in the rail construction industry, where he is an expert in preconstruction services with owners and stakeholders. He began in the field as an operator and has matured in the industry via his hands-on experience and temperament. He has an innovative and creative air about him that allows for endless outside-the-box thinking, which has led to safer, more cost-efficient, schedule-saving and problem-solving ideas. His strong partnering mentality with clients and stakeholders on both current and past projects has and will add value to any Project Management Team. Adams manages people and projects with a fair and balanced mindset. Anastasia Austin AVP, Business Excellence, Kansas City Southern Railway

Anastasia Austin is assistant vice president business excellence for Kansas City Southern (KCS) (NYSE, KSU). Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. KCS’s North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada. In her current role, which she has held since September 2016, Austin leads a team supporting operations process improvements and efficiency initiatives. She joined the company in 2008 and has held a variety of accounting and finance roles, including leading the team responsible for providing all aspects of financial decision support services to the company’s operations groups. Prior to KCS, she spent five years in internal audit roles in the financial services and telecommunication industries. Austin holds a master of business administration-finance, master of science in accounting and bachelor of business administration degrees from the University of Missouri-Kansas City.

Kyle Baker Manager of Structures, Genesee & Wyoming Railroad Services, Inc.

Kyle Baker started with Bergmann Associates, a consultant engineering firm located in Jacksonville, Fla., that specializes in structural/ geotechnical projects for the United States Department of Transportation, Army Corps of Engineers, and several waterfront/heavy civil engineering contractors. During this time he was employed as a junior structural engineer working on several projects throughout Florida while pursuing his Master’s Degree in Structural Engineering through the University of North Florida. In 2013, he joined Genesee & Wyoming Railroad Services where he worked for two years as a senior structural design engineer, then assumed the role of Manager of Structures. In this role, he is responsible for all G&W structural/geotechnical design related projects across the U.S. This encompasses approximately 8,500 bridges along with several hundred miscellaneous structures. Elaina Blanks-Green General Tax Attorney, Norfolk Southern Corp.

Elaina Blanks-Green is a general tax attorney who evaluates and advises on the tax treatment of various matters, some of which may have tax implications into the millions of dollars. Specifically, Blanks-Green engages with members of numerous departments to analyze potential tax implications for a diverse range of matters including buying and selling real and personal property, leasing and licensing various property including track and improvements, reviewing tax submissions from vendors for compliance, reviewing and drafting agreements and contracts, providing illustrations regarding the tax impact of proposed deal structures, and analyzing and interacting with various public entities regarding grants for improvements. In addition to the above, Blanks-Green also interacts with and oversees various controversy matters including government examinations of income, property, sales and use, business license and employment returns. As a devoted community servant, she has volunteered in a number of capacities to many organizations. February 2017 Railway Age 23

FAST TRACKERS 2017 Michael A. DiArenzo Manager of Asset Planning and Administration, Conrail

Michael DiArenzo is a second-generation railroader, both parents having worked for Penn Central and “Big Conrail.” This past January, DiArenzo celebrated his ten-year anniversary with the company, having started out as a field employee in engineering, and worked his way up the corporate ladder as a track supervisor in the Camden and Philadelphia sub-divisions, to the current position he holds today. DiArenzo is a dedicated employee who is responsible for supporting Conrail’s engineering field operation, managing the engineering contract services and material purchasing for routine maintenance and major projects. He also handles a major portion of Conrail’s capital program, which includes shared state and federal funded track infrastructure projects. DiArenzo currently lives in Springfield, Pa., with his wife, Jennifer, one year-old daughter, Hailey, and chocolate Labrador, Sheldon. In his spare time, he enjoys playing golf, working on home projects, being an active member of his local church, and spending time with his family. Derek Harter Assistant Chief Engineer, Canadian Pacific

A former captain of the Michigan Tech football squad, Derek Harter started in railroading in 2009 as an engineering intern at CN. In November 2011, Harter joined Canadian Pacific as a project engineer out of Bensenville, Ill. In 2012 he was promoted to division engineer in Chicago, responsible for the entire engineering group from Chicago to Milwaukee and across Wisconsin, accountable for track, production, signals and communications, and structures. Harter managed all of these responsibilities at a time when the company was undergoing a significant overhaul, changing the safety and operating cultures across the entire territory. A new president and CEO arrived at CP with a mandate to improve the railroad’s standing. This meant an all-inclusive change to how the railroad operated, from resource levels to operating practices, requiring a complete culture shift. As a talented but young leader, Harter found himself having to help bring these changes to life on the front line, motivating people who were in some cases 20 to 30 years his senior. 24 Railway Age February 2017

Luisa Fernandez-Willey Senior Economist, Policy & Economics, Association of American Railroads

Luisa Fernandez-Willey is a senior economist for the Association of American Railroads (AAR). She is responsible for conducting quantitative and qualitative research and analysis on economic and policy issues affecting freight railroads, their customers, and their competitors in response to the needs of various AAR departments, committees, and its constituent railroads. Additionally, she is responsible for assisting with the data collection, processing, editing, and production of several AAR publications and databases. Most recently, she managed the analysis for the Economic and Fiscal Impact Analysis of Class I Railroads and conducted webinars where she discussed economic data and railroad traffic trends. Fernandez-Willey’s professional experience prior to joining the AAR includes financial management consulting, economic research supporting government and private sector clients, and academia. She is also a published economist. Fernandez-Willey holds an M.A. in Economics from the University of Missouri-Kansas City. Nicole Jackson Senior Traffic Engineer, CTC Inc.

Over the past decade, Nicole Jackson has become one of the industry’s most respected grade crossing safety experts, focusing on traffic signal and railroad system design. She has conducted preemption training sessions across the U.S. and Canada; contributed peer-reviewed articles to professional journals; and helped design and implement grade crossing safety systems for noted transportation organizations. Jackson’s professional goals center around her desire to make grade crossings safer for everyone. She is driven to share the knowledge gained over the last 16 years to help improve safety for the traveling public, as well as to educate and mentor people in the industry who share her passion to make the world a better and safer place. Jackson is a registered professional engineer in 32 U.S. states and two Canadian provinces, as well as a registered Professional Traffic Operations Engineer. Prior to working for CTC, she held the position of Senior Traffic Engineering Specialist with the Missouri Department of Transportation.


© 2017 Norfolk Southern Corp., Three Commercial Place, Norfolk, VA 23510,

FAST TRACKERS 2017 Evan P. Sevel Global Director of Eqiuipment, Harsco Corp.

Greg Dreeszen Structural Design Lead, Jacobs Engineering

Greg Dreeszen of Jacobs is helping lead the way for high speed rail as the Structures Design Lead for the pursuit and delivery of the $1.3 billion 65-mile California High Speed Rail Construction Phase 2-3 Project through California’s Central Valley. He uses his strong leadership and communication skills to manage a talented group of almost 80 structural engineers from offices across the country. As structures design lead, Dreeszen works closely with the contractor and develops innovative solutions to project challenges as they appear. He also provides the main interface with the High Speed Rail Authority, its review teams, and many third parties. Dreeszen continually gains an understanding of each party’s needs and, when conflicts arise, strives to find agreement. Prior to working on the high speed rail, he helped deliver the EAGLE P3 Project, part of the Denver RTD FasTracks program, as lead structural engineer.

Evan Sevel began his career with Schaeffler Group USA, holding positions spanning the mining, construction, rail, gas, automotive, and industrial industries. Today, he holds a key leadership seat within Harsco Corp. as a member of the company’s Rail Leadership Team serving as Global Director of Equipment. His pursuit of drone technology, vision and collision avoidance systems addresses one of maintenance-ofway’s most critical pressure points: safety. Sevel and his team are focused on developing equipment and solutions that optimize network utilization and network availability, creating the progressive infrastructure that helps protect the human equation in railway technology, keeping individuals out of harm’s way. He holds a B.S. in mechanical engineering from Ohio State University and an M.B.A from the University of Chicago. Sevel is a board member of the product management consulting firm Sequent Learning.


• Adam Baginski, Manager Engineering Services, Conrail. • Todd Euston, Vice President Engineering, Georgetown Rail Equipment Company. • Andreas Hoffrichter, Burkhardt Professor in Railway Management, Michigan State University. • Emilia Marceta, Project Coordinator, Signals and Communications, Network Infrastructure, GO Transit/Metrolinx. • Katie Miller, Global Marketing Specialist, Pentair, ERICO Rail Solutions.

26 Railway Age February 2017

• Nicholas Pattyn, Superintendent, Canadian Pacific Railway. • Thomas Savage, Vice President Corporate Development and Treasurer, Genesee & Wyoming Railroad Services. David Strezo, Director Network Operations and Customer Service, OmniTRAX. • Sarah Taylor, Manager, Business Analysis Center of Excellence, Kansas City Southern Railway. • Kelle Marie Williams, Director of Real Estate, OmniTRAX, Inc.

$274 Billion Economic Impact

1.5 Million Jobs


Luisa Fernandez-Willey

As the driving force behind the first-ever quantification of freight rail’s national economic impact, we want to congratulate Luisa being named one of the Fast Trackers Under 40 by Railway Age.


JUDGES Nick Little Managing Director, Michigan State University Railway Management Program, Eli Broad College of Business, East Lansing, Mich.

While in high school in Britain, Nick Little started his career with clerical and operating internships at Plymouth on British Rail’s Western Region in the early 1970s. He won a scholarship program with the British Railways Board that gave him a supply management degree plus training in all aspects of BR’s organization. Little then spent 15 years with BR in many locations, including Derby and London. In 1995, Little came to Michigan State University, initially for one year on loan to work on a research program, but he stayed to follow his passion of helping to develop future generations of railway industry expert managers and leaders with deep business knowledge and experience. He took charge of MSU’s Railway Management Certificate Program at the Eli Broad College of Business in 2013.

Ronald L. Batory President and Chief Operating Officer, Conrail

Ronald L. Batory is a career professional with more than 45 years of line and staff experience in the railroad industry, serving in various administration and operating management positions of considerable responsibility. He spent the first 23 years of his career working for eastern and western Class I railroads in addition to assisting a court-appointed trustee’s successful oversight of a regional railroad bankruptcy. In 1994 he was appointed President of The Belt Railway Co. of Chicago, a jointly owned switching and terminal subsidiary of the then-nine Class I’s. His leadership in serving BRC’s owner railroads in the Chicago Gateway led to CSX and Norfolk Southern recruiting him to Conrail in preparation of its STB-approved partitioning and establishing what is now known as the Shared Assets Areas. Providing a plain of equality for joint competition later favored him for being appointed to his current position. RA

Take the

mystery out of light rail

planning In recognition of his work toward achieving our Core Purpose —to be the safest and most respected rail service provider in the world—

G&W is honored to congratulate

Kyle Baker,

Manager of Structures, on being named one of Railway Age’s 10 Rising Stars Under 40.

Genesee & Wyoming Inc.

28 Railway Age February 2017

Gain comprehensive insight into specialized technical and operating issues associated with light and interurban railways with Al Fazio’s invaluable new book. This must-have book will appeal to transportation professionals in planning, operations, civil engineering, signaling, and vehicle engineering as well as undergraduate and graduate students looking to enter these fields. You’ll benefit immensely from exploring New Jersey’s decades of light rail experience. Softcover. 136 pages.


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Harsco Rail congratulates Evan Sevel, Global Director of Equipment, for being selected as one of Railway Age’s Fast Trackers – 10 Rising Stars Under 40.

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Put more grain

in the train

Agricultural products are growing, literally and figuratively.

Bruce Harmon/FreightCar America

By WILLIAM C. VANTUONO, Editor-in-Chief


mber waves of grain, whether they originate in the American Midwest or on the Canadian Prairies, are hauled most effectively in unit trains of covered hopper cars. At a time when railroads are feeling the effects of vastly reduced coal and (to a lesser extent) crude oil volumes, and softness in intermodal, agricultural products are an important feedstock for nourishing shaky bottom lines. Grain was, and continues to be, one of the few bright spots in railroad traffic. 2016 “was a difficult year for the railroads, primarily due to a sharp decline in commodity

movements and a modest easing in intermodal traffic,” Economic Planning Associates principle Peter Toja said in a freight car market report issued earlier this month. “Among the major commodity categories, only grain, chemicals, motor vehicles, coke, and scrap scored year-over-year gains. Due to the strength in boxcars, hi-cube covered hoppers, and mid-sized (medium-cube) hoppers, our 2017 estimate of total railcar deliveries edged up from 41,000 cars to 43,000 cars. However, weaknesses in tank cars, coal cars, flat cars, and mill gondolas will serve to keep 2018 assemblies flat at 42,500 cars. Longer term, railcar deliveries will expand February 2017 Railway Age 31

AGRICULTURal products

Detail from U.S. Patent no. US582935A, “Railway hopper car discharge gate assembly,” issued No. 3, 1998 to Miner Enterprises.

from 46,300 in 2019 to 53,500 in 2021.” Commented Railway Age Financial Editor David Nahass in September 2016, “Other than for an extreme escalation in the pace of grain loadings or weather-related traffic disruptions (think the polar vortex), the market is pretty much stuck, and most of the industry is uncertain as to when strength will return.” In our 2017 Financial Desk Book (October 2016 issue), Nahass noted that commodity prices for corn and soybeans continue to drop as the 2016 harvest is expected to be at historical levels. Low prices are hurting the farm community. Global demand due to non-U.S. crop-related issues haven’t yet materialized at expected levels. There has been speculative building. New cars are out and in competition with existing equipment. [Equipment lease] prices are partying like it’s the 1990s, with jumbo cars (5,200 or 5,400 cubic-foot-capacity) going off in the low $300s, but that is likely to rise. 4,750s? Rates are in the $225 range and rising. These are in abundant supply and many are headed back to their current lessors. Many investors are pinning their hopes on weather that may delay the harvest (especially in Canada) and ultimately spur railcar demand.” It’s those medium-cube covered hoppers, generally ranging from 3,500 to 5,500 cubic-foot capacity, that are needed for agricultural products, and that will keep carbuilders’ production lines grinding away. As of late last year, there were 15,000 medium-cube hoppers in carbuilders’ backlogs. The North American medium-cube covered hopper fleet 32

Railway Age

February 2017

currently stands at approximately 287,000 units. The fleet’s age profile leans toward the senior-citizen side, as between 20% and 25% is 35 years of age or older—quite old for a freight car. This geriatric characteristic is driving “good replacement demand,” FreightCar America Chief Commercial Officer Ted Baun told Railway Age. The decline in coal, and the drastic

Between 20% and 25% of the medium-cube covered hopper fleet is 35 years of age or older— rather old for a freight car— driving replacement demand. reduction in the need for new rotary gondolas and opentop hoppers, prompted FreightCar America to diversify and expand its product line beyond its traditional base to include covered hoppers, of all sizes. Baun said that FreightCar America’s covered hopper business has been steady, “a strong car type for us as well as the overall carbuilding industry.” Its railcars are manufactured

AGRICULTURal products

in a recently built state-of-the-art plant in Cherokee, Ala., leased from Navistar since 2013 and having a capacity to build up to 8,000 railcars per year. The Cherokee plant, located in northern Alabama’s Shoals region (photo, p. 31) has been churning out several thousand covered hoppers during the past 18 months, most of those of the high-cube variety. Several years ago, prior to production start-up, FreightCar America prototyped and tested its medium-cube car. Despite the uptick in grain loadings, Baun said the company has “some concern for 2017” as the export market appears “finicky” and a medium-cube over-supply situation appears to exist, even with the fleet’s advanced age. TOP HATCH TO BOTTOM OUTLET

The strength in agricultural products traffic has opened up opportunities for those companies that supply hatch covers and bottom-outlet gates for covered hoppers. Salco Products Inc. and Miner Enterprises Inc. are among the principal providers of this equipment. Salco’s 30-inch vented hatch cover is a larger version of the company’s 20-inch vented cover for plastic pellet service. The 30-inch cover “provides the necessary venting of a hopper car while unloading,” according to Salco. “Having the vents built into the cover reduces the potential for roof implosions, and eliminates the need to climb on top of the car, which increases the risk of an accident. Salco manufactures outlet gate seals and gaskets for most outlet gate manufacturers, and is the preferred supplier of gate gaskets for Miner outlet gates. The company’s Outlet Gate Pan Gasket “was developed as a solution to customers’ contamination, discoloration, and inadequate seal problems. Field testing has proven these products to be superior in tensile strength and weatherability.” Salco works with ATP (Aero Transportation Products) on supplying customers with replacement covers, batton bars and gaskets. Salco also supplies air and product piping, outlet pans, valves and couplings for all major pressure differential (PD) car manufacturers. The company’s engineering department worked with National Steel Car to design and supply all piping and accompaniments for its 160 PD car. Salco’s PD Aerator Pad is “a patented part exclusive to Salco that takes the place of three different components and provides time saving and cost saving benefits. We keep more than 90% of our PD car part offering in stock at all times to ensure immediate shipment.” Miner’s 30 x 30 outlet gate, which is available in weld-on or bolt-on configuration, is described as “the workhorse for the agricultural service sector.” The company’s AutoLOK™ II gate “is the most widely specified outlet gate in the industry. The AutoLOK II is easy to open and close and stays locked. It features Miner’s patented lost-motion mechanism system, which allows the door to unlock first without moving the door, reducing the risk of gate damage. The AutoLOK II’s

slope sheets and vertical, below-door sides let the load flow freely without buildup or packing in the corners. With tight tolerances and full perimeter seals, the AutoLOK II prevents leakage, making it perfect for dry bulk commodity materials.” Miner says the AutoLOK II meets all GEAPS (Grain Elevator and Processing Society) and AAR S-233-92 specifications “to improve unloading operations in a wide variety of demanding applications.” The company holds numerous discharge gate patents dating to the early 20th century. U.S. Patent no. US5829359A, “Railway hopper car discharge gate assembly,” issued Nov. 3, 1998, applies to gates meeting the then-new AAR specification. An abstract: “A discharge gate assembly for a railway hopper car that satisfies the new AAR requirements and specifications and includes a frame defining a generally rectangular discharge opening with a gate slidably mounted on the frame for endwise horizontal movement between opened and closed positions. An operating shaft assembly is supported on opposite frame extensions for rotational movement about a fixed axis. The operating shaft assembly is operably coupled to the gate. A lock assembly is operably coupled to the operating shaft assembly and includes a vertically displaceable stop member mounted for vertical and rotational movement about a fixed axis extending above the path of movement of the gate and in fore-and-aft relationship relative to an edge of the gate. “When the gate is in its closed position, the stop member extends downwardly and into engagement with the gate edge to positively prevent the gate from substantial movement toward an open position. A drive mechanism is disposed adjacent the frame extensions for positively displacing the stop member from the path of travel of the gate in timed relation relative to movement of the gate toward an open position.” For those readers interested in diving deeper into this patent, see Otherwise, sit down and enjoy a bowl of cereal. It’s this equipment that got it to your breakfast table. RA

Salco Products 30-inch vented hatch cover.

February 2017 Railway Age 33

Goop be gone

By MISCHA WANEK-LIBMAN, Engineering Editor


riction management has established its place in a well-developed rail maintenance program. Suppliers are working to make sure right place, right time and right amount placement of friction modifiers to maximize benefits. L.B. Foster

L.B. Foster Company provides an extensive line of gauge face (GF) and top-of-rail (TOR) friction management products, as well as a North American-wide field services team to support its customers’ continuing efforts to lower costs and improve operating efficiencies and productivity. It has long been established that an effective friction management program drives considerable savings for railroads by decreasing wheel and rail wear, reducing rolling contact fatigue (RCF), improving fuel efficiency, and extending grinding intervals. According to Steve Fletcher, General Manager, L.B. Foster Rail Technologies, “Data from numerous published studies has clearly demonstrated the overwhelming economic benefits of an active friction management program. L.B. Foster has been proud to work with our railroad partners over the years to develop new products, as well as industry-wide best practices to support the rollout of friction management technology 34 Railway Age February 2017

in the heavy-haul railroad environment. It speaks to our core strengths in product development, wheel/rail interface expertise and field implementation know-how in areas such as service, measurement, and data analytics.” The company noted that “typical operating conditions push wheels and rail beyond their limits to withstand the onset and propagation of RCF cracks. Under many conditions, these cracks reduce asset life. Data from friction management application in a typical heavy-haul environment shows wheel life extensions of up to 50%-70% due to RCF reduction. RCF mitigation on rails can be directly translated into reduced rail maintenance activities. Proper friction management use provides the potential to extend grinding intervals up to a factor of two. Over the past several years, it has also been shown that a territory-wide approach to friction management can provide measurable reductions in locomotive diesel usage in both highly curved, as well as shallow curved or tangent track regions. The net result is a substantial improvement in fuel efficiency over broad territories. Data collected during trials, as well as wide scale friction management implementation suggest an average fuel saving potential of 3-5%.” Further, the company is partnering with railroads to

Loram Maintenance of Way, Inc.

Friction management providers aim to increase equipment uptime while delivering high-performance solutions.

NatureBlend™ meets European standard for solid rail lubricants!

NatureBlend is the next generation of environmentally friendly SolidStick™ wheel flange lubricants. MPL’s new extreme pressure, 100% renewable, biodegradable lube sticks provide superior wheel flange lubrication.

425-398-1310 |

February 2017 Railway Age 35


L.B. Foster SYNCURVE™ gauge-face grease applicator

maximize their return on investment; to do so the equipment must operate well above typically seen uptime levels of 40-50%. L.B. Foster said it is taking a non-traditional approach to conventional service offerings to address this opportunity by ensuring equipment uptime of at least 85% to maximize savings by its customers. “We take the risk in guaranteeing uptime,” said Fletcher. “Our ‘pay for performance’ service model sharpens our focus on enhancements to our friction management products and services to improve uptime performance. For example, our unique SYNCURVE™ gauge-face grease and KELTRACK® ER friction modifier products are effective at lower application rates to extend lubricator filling intervals. We have developed new PROTECTOR® IV components to optimize power consumption to increase battery life, critical for solar-powered units placed in low sunlight areas. And we have improved our remote performance monitoring capabilities and data analytics to strengthen equipment operations. As well, our newly reconditioned high-speed Tribometer can quickly assess the friction conditions of large sections of heavy-haul track. Our field applications team is continuously refining their measurement and analysis procedures to validate performance results. By taking a comprehensive approach to managing unit uptime and confirming results, we can drive value for our customers in a seamless, integrated manner.” Loram

Loram Maintenance of Way, Inc., says that equipment uptime of any Friction Management (FM) program drives 36 Railway Age February 2017

the ability to optimize rail life, and, in turn, maximize cost reduction benefits. “By utilizing Loram’s friction management equipment and maintenance services customers can expect to achieve industry leading uptime of 90%-plus reliability,” said Scott Diercks, Director of Marketing and Business Development. “Loram’s robust equipment design, remote monitoring capabilities, and skilled service technicians provide unparalleled performance and the tools to manage uptime that lead to significant savings for our customers. Loram’s application equipment also includes smart algorithms that enable customers and service technicians to fine-tune FM modifier and grease delivery that home in on customer’s specific sitecentric and/or system-centric needs.” Diercks said Loram does not take a “one size fits all” approach to friction management needs of its freight and transit customers. He explained that product innovations focus on addressing customer demands, as well as providing value, which has led to added “depth and breadth” of Loram’s friction management products. “In terms of product depth, Loram has expanded its tank size options, developed power and controls systems with scalable features, and grown its top-of-rail friction modifiers to include water based, oil based, and a hybrid emulsifier. Loram’s increased product depth allows customers to select customized packages to better suit their performance and budgetary needs,” said Diercks. “In terms of product breadth, Loram has expanded into gauge-face lubrication application equipment and grease, developed a whole range of remote


monitoring technologies that can be customized to address both cost and performance needs, advanced its services to include asset management analytics, created a total program management with the inclusion of maintenance and bulk fill services, and now offers a dual procurement option with both an OEM sale or equipment lease that enables customers to choose how to best spend their capital.” MPL

MPL Innovations, Inc., founded in 1991 to develop and commercialize a solid onboard polymer lubricant for the rail industry now known as Solidstick™, has obtained European UNI EN 16028 Standard (Annex L) certification for trainborne lubricants for its NatureBlend™ product. MPL worked closely with its customers to develop NatureBlend, an environmentally friendly lubricant produced entirely with renewable and biodegradable polymers and oils. MPL had NatureBlend tested on the National Research Council of Canada’s twin-disk Amsler machine “to verify it meets the demanding standards of rail applications,” the company said. “The Amsler machine, operated by the NRC in Vancouver, Canada, is one of the few test machines in the world capable of simulating this type of severe operating environment for testing solid lubricants.” “We strive to consistently improve our line of products from a performance standpoint while at the same time reducing our environmental impact by sourcing sustainable polymers and oils. We continue to work closely with our customers to identify new areas of development opportunities in the rail industry,” said MPL President Mike Mitrovich. UNI EN 16028 was established in 2012 by the European Committee for Standardization, creating requirements for testing and approval of wheel/rail friction management products throughout Europe’s rail industry. The standard is used to measure the effectiveness of a lubricant when subjected to extremely high pressures and environmental conditions experienced in railway applications. RBL, Inc.

The Robolube “Linear” Wayside, Gauge Face Lubricator System from RBL, Inc., is designed as a stand-alone system that places the friction modifier on the gauge corner, which is then distributed down the track where needed by a passing train’s wheels. Robert Pieper, President of RBL, notes this design results in better lubrication, reduces the amount of lubricant used and is ideal for high-density track. “The environmentally friendly Robolube ‘Linear’ Lubricator does not require any catch or hazardous waste mats to be placed on the ties. Waste and castoff of lubricant is virtually eliminated along with the problems associated with inadvertently creating environmental contamination of the lubricator site,” he said. RBL also offers custom Robolube Model 200-40 Hyrail Lubricators that offer the flexibility of two separate application systems in a single enclosure. Pieper says that one tank

carries 200 pounds of curve and flange grease, and the other tank carries 40 pounds of friction modifier. The lubricator can grease the gauge face on the low or high rail, as well as apply friction modifier to the top of the low or high rail. SKF/Lincoln

Eric Nieman, SKF Railway Portfolio Manager, said the SKF line of Lincoln-branded rail lubrication products was designed to help customers save money by extending rail life. While Nieman recognizes the role lubricants and friction modifiers play in rail wear reduction, he says making sure they are placed in the proper locations, at the right time in the correct quantities also contributes to the success of a friction management program. “This is where SKF/Lincoln specializes in helping customers extend rail life. Placement and timing of lubricants and friction modifiers is critical to ensure proper transfer of material from the applicators to the wheel-rail interface. Dialed-in quantities placed in the proper location help to ensure that customers realize the maximum benefit of friction reduction while reducing lubricant/friction modifier waste that often happens when materials are applied in excess or misapplied,” said Nieman. SKF moved the manufacturing of its Lincoln wayside railroad products to its new St. Louis, Mo., facility in 2016, which Nieman said “will enable manufacturing process improvements that will enhance quality throughout the supply chain. We also are building upon our extensive knowledge of grease and friction modifier flow characteristics by doing more studies focusing on how our lubricators behave in the field.” Recent product offerings added to the company’s freight line and transit rail lubrication portfolio include a wheel sensor mount, brushless gauge-face applicator and solar panel. The wheel sensor mount was developed to fit a wide range of rails and uses a stud-shim design that the company says enables quicker mounting. Nieman explained that the enhanced stud clamp and slotted, height-adjusting shims reduce the amount of time on the track, while one common nut size eliminates the need to switch sockets Loram top-of-rail friction modifier.

February 2017 Railway Age 37


during time-critical track maintenance removal and re-install activities. The company now offers a brushless gauge-face applicator, which builds upon the SKF/Lincoln “brush-bar” applicator by eliminating maintenance during brush replacement and incorporating an easy-to-clean trough.

is achievable in the majority of cases and substantial lateral force reduction has been measured six miles from the applicator; long carry down often results in less product used and a reduction in the number of applicators needed to lower maintenance costs and time.” Whitmore Rail also offers rail equipment to complement Whitmore Rail its lubricants and friction modifiers, such as AccuTrack®, an Whitmore Rail’s Comprehensive Friction Management electric trackside applicator. The company said the applicator package includes high-performance lubricants and friction incorporates a volume-based control system featuring direcmodifiers, application equipment and track-mounted compo- tional pump output settings with a locomotive wheel skip nents that it says streamlines efforts to save time and money. feature, self-diagnostics for troubleshooting, a prime button “Whitmore Rail’s Rail Curve Lubricants are proven to for continuous pumping during filling, pump position sensor reduce wheel flange and rail wear, extend rail and wheel for precise grease output and a communications port for life, save fuel and reduce wheel squeal. Thesy have proven to remote monitoring requirements. The system is compatible carry farther than competitive products and in areas where with Elecsys RFM-100 remote monitoring and allows users additional carry has no benefit, consumption can be reduced to save data for more efficient product filling and mainteby up to 50%,” said Director of Railroad Sales Bruce Wise. nance schedules. The company’s curve lubricants include Rail Armor® Whitmore Rail recently introduced PolyTOR™ Bar to its line of track-mounted components. This top-of-rail bar is an and come in summer and winter grades. The company is easy maintenance wiping bar consisting of a 36-inch long, testing an all-season grade of curve lubricant that it said is replaceable, polyurethane bar insert with a reinforced port performing well. molded in the center. This polyurethane compound is imperviWhitmore Rail said its TOR Armor® friction modifier reduces lateral creep and has been measured on instruous to UV, oil and water and can endure false flange contact. 1302 WhoWhatWhyWearAd 2.pdf than 1 50% 1/30/17 PM mented track to reduce lateral7x4.9375 forces Mchl by more as 1:23PolyTOR’s fiberglass-reinforced bulb seal keeps top-of-rail compared to dry track. “Carry-down distance of three miles product in the contact patch minimizing wasted product. RA

38 Railway Age February 2017



High profile Amtrak President and CEO Wick Moorman reduced by half the senior management team into six direct reports: Operations: Scot Naparstek, Chief Operating Officer; Marketing and Business Development: Jason Molfetas, Executive Vice President; Finance: Jerry Sokol, Chief Financial Officer; Law: Eldie Acheson, General Counsel and Corporate Secretary; Administration: DJ Stadtler, Chief Administrative Officer; Planning, Technology and Public Affairs: Stephen Gardner, Executive Vice President. Train operations will be Moorman managed regionally through three general managers and Amtrak supported by Mechanical, Engineering, Network Support, Police and Security organizations. A new Administration group will manage key administrative and support functions including Human Resources, Labor Relations, Procurement and Enterprise Project Management. Certain corporate planning, IT and station and facility functions, as well as the Government Affairs and Corporate Communications division, will be transferred to a new Planning, Technology, and Public Affairs group. Babu Veeregowda, P.E., P.T.O.E., A.V.S., has joined HNTB Corp.’s Northeast Division as Chief Transportation/Traffic Engineer and Vice President, New York City. R. J. Corman Railroad Group, LLC, named Nathan Henderson President of R. J. Corman Railroad Services, LLC, and Noel Rush Senior Vice President Commercial Development. Edwin E. Tatem named Construction Services Manager, Transportation & Infrastructure, for the Central Region at WSP | Parsons Brinckerhoff. Kurt W. Krauss named Chief Projects Officer, U.S. Advisory Services Group.

appointed President. Keith Kelsey, Regional Account Manager, David J. Joseph Company, is First Vice President. Jason Seidl, Managing Director, Cowen & Company, and Railway Age Wall Street Contributing Editor, is Second Vice President. Joseph Gearin, who has been involved with NEARS for 40 years, retires this year. Short line railroad executive David L. Parkinson, 78, died Dec. 17. SYSTRA USA appointed Stanley Rosenblum Chief Operating Officer.

The North East Association of Rail Shippers (NEARS) named Scott McCalla, Owner and Director of Maxem Consulting, as Executive Director. Donald Cameron, Manager-Business Development, Yusen Logistics (Americas) Inc.,

NJ State Transportation Conference and Expo. Tropicana Casino Conference Center, Atlantic City. Contact:908-647-3622; April 18-20, 2017 Railway Age/RT&S Light Rail Conference: Planning, Engineering, Operations, followed by Rail Transit Finance. Grand Hyatt Denver, Colorado. Information: June 7-8, 2017 Railway Age Third Annual Rail Insights Conference Union League Club of Chicago Information: Sept. 25-27, 2017

100 YEARS AGO in

Institution of Railway Signal Engineers (IRSE) 2017

Brookville Equipment Corp. CFO Rick Graham promoted to President. Paducah & Louisville Railway, Inc. and affiliates Evansville Western Railway, Inc. and Appalachian and Ohio Railroad, Inc. named Tim Wyatt Vice President, Transportation & Labor; Kevin McEwan Vice President, Marketing & Sales; Chris Reck Assistant Vice President, Sales and Industrial Development; and Tasha Headrick and Brian Wyatt, Marketing Analysts.

April 18-20, 2017

Annual Convention.

February 1917 The Needs of Florida—and of Other States* We need railroad regulation devoid of prejudice and free from politics, whose essentials are not cheapness, but service and safety, which, while having due regard for the protection of the public against the avarice of the unscrupulous commuter, will, at the same time guarantee to the legitimate investor a fair and equitable return on his investment; such as is now enjoyed by men in every other legitimate business interests. *From an address before the Traffic Club of Jacksonwille, Fla., by W. L. Stanley, Assistant to the President of the Seaboard Air Line.

Dallas, Texas Contact : http://irsecon17.wixsite. com/dallas. Oct. 19-20, 2017 Railway Age/Parsons International Conference on Next-Generation Train Control Courtyard Philadelphia Downtown Information:

February 2017 Railway Age 39

Products Intelligent Power Converters for Rail Lighting/Electronics laptop with a standard micro-USB interface. According to Electrical Engineer Piotr Jedraszczak P.E., Metra recently began to use new digital inverter units as part of a recent upgrade of the emergency lighting system on passenger railcars. The project also required converting the existing DC lights to brighter, AC-powered fluorescent lights. The configurability of the IPSi Series intelligent inverters allowed Metra engineers to work within the parameters of the existing system design. “Rather than trying to install a proprietary system, we got an inverter that could be configured to run on our specific rail voltages,” says Jedraszczak. The inverter from Analytic Systems has two inputs, one from the battery banks and another that feeds 120 VAC to select fluorescent lights. The inverter senses power loss IN railway operations, power converters are used with and switches very quickly to the battery bank to seambattery banks to provide power for emergency lighting and other lessly maintain 120VAC power to select, assigned lights as electronics systems on rolling stock, when AC is not available. outlined in the regulations. Jedraszczak says the inverters To accomplish this, Metra utilizes a custom converter unit were an economical solution given Metra operates several developed by Analytic Systems that combines a battery hundred rail cars. He also appreciates that in the event of charger and 32VDC regulated power supply. By using the free changing requirements being able to reconfigure the inverter “Power Wizard” software, companies such as Metra are able to electronically and upgrade firmware is ideal. For more infordefine the output frequency, output voltage, output frequency mation call (800) 668-3884;; and low voltage shutdown parameters of1any inverter 1_2pgHorzWrkStTraining2016.qxp_Layout 8/17/16 3:25from PM aPage 1

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Locomotive: •

GE 7FDL Diesel Engine Maintenance

Testing and Troubleshooting 26-Type Locomotive Air Brake Systems

Locomotive Periodic Inspection and FRA Rules Compliance

Locomotive Electrical Maintenance and Troubleshooting

Locomotive Air Brake Maintenance and Troubleshooting

Distributed Power Maintenance and Troubleshooting

Distributed Power Operations, Training, and Operating Rules

Freight Car:

The Railway Educational Bureau The Railway Educational Bureau 1809 Capitol Ave., Omaha NE, 68102 Toll Free (800) 228-9670 • (402) 346-4300 40

Railway Age

February 2017

Freight Car Inspection and Repair

Single Car Air Brake Test

FRA Part 232 Brake System Safety Standards for freight and other non-passenger trains

Train Yard Safety

Track: •

Track Safety Standards

Ad Index Company

Phone #


URL/Email address

Association of American Railroads 202-639-2100

Page #


Conrail 26

Danella Rental Systems, Inc.



Dixie Precast




FreightCar America




Genesee & Wyoming Inc.




Harsco Rail




L B Foster Co




LORAM Maintenance of Way Inc



Miner Enterprises




MPL Technology




Norfolk Southern






Penn Northeastern Railroad




Railquip Inc




Railway Educational Bureau, The



Salco Products Inc Inc




Vertex Railcar Corp



Whitmore Manufacturing Co




Wi-Tronix LLC








The Advertisers Index is an editorial feature maintained for the convenience of readers. It is not part of the advertiser contract and Railway Age assumes no responsibility for the correctness.

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 AL, KY, Jon Chalon 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, Canada – Quebec and East, Ontario Jerome Marullo 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7260 Fax: (212) 633-1863

AR, AK, AZ, CA, CO, IA, ID, IL, In, KS, LA, MI, MN, MO, MS, MT, NE, NM, ND, NV, OK, OR, SD, TN, TX, UT, WA, WI, WY, Canada – AB, BC, MB, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5026 Fax: (312) 683-0131 The Netherlands, Britain, France, Belgium, Portugal, Switzerland, North Germany, Middle East, South America, Africa (not South), Far East (Excluding Korea /China/India), All Others, Tenders Louise Cooper International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185

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February 2017 Railway Age 41

equipment Sale/Leasing

Available For Lease ◆ Pressure Differential (PD) Covered Hopper Cars – 5,125 & 5,230 cu. ft., 286K GRL, operate at 14.7 psi. ◆ Pressure Differential (PD) Covered Hopper Cars – 3,915 cu. ft. capacity, operate at 14.7 psi. ◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides. ◆ Open Top Hopper Cars – 4,000 cu. ft., three pocket with manual gates and rotary couplers. For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 4480 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks 60 ft, 100 ton Plate F box cars, cushioned underframe and 10 ft plug doors 50 ft, 100 ton Plate C box cars, cushioned underframe and 10 ft plug doors Contact: Tom Monroe: 415-616-3472 Email:


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equipment Sale/Leasing


Tired of Wasting Fuel? Tired of Turbocharger Maintenance? Have Locomotives with Failed/Worn Out Engines? _____________________________ Metro East has EMD 16-645E Prime Movers Available •Removed From Running UP SD38-2 Units •Recent Overhaul Dates •Tier 0 & Non Tier 0 •Engine Inspections Available _____________________________ Let Us Show You The ROI of Converting Your SD40/ GP40 to SD38/GP38 ConfigurationMetro East Has The Expertise And All Parts Available To Make This Happen! _____________________________ These Engines Are Also Perfect Candidates to Replace Your Existing Failed/Worn 16-645E, 16-567C, 16-567CE Engines _____________________________ Contact Brian Marty at Metro East Industries: (618)271-7210 or

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February 2017 Railway Age 43

Financial edge DAVID NAHASS

Chuck the steering wheel out the window


mong the daredevil set, the cadre of YouTube videos of drivers that attempt to stress the limitations of Tesla’s driver assist (or self-driving) mode (searching “Tesla Autopilot” yields a search result of almost 250,000 videos) is poor man’s fodder. Never reaching the heights of daredevil insanity of Evil Knievel making a jump over Snake River, these overnight daredevils push the boundaries of good sense (“Testing Tesla’s autopilot system at 70 mph”). Daredevil behavior might get a shot in the arm as driverless truck technology is moving quickly from the stuff of fiction and cinematic special effects (who didn’t love Stephen King’s Christine?) to mainstream traffic arteries that connect U.S. cities and regions.You think the daredevil set is hungry now? Wait until the only thing behind the wheel of a FedEx trailer is a motherboard, microchips and someone at a command center thousands of miles away. What’s the motivation behind a surge in investment and interest in driverless truck technology? According to Rod Case, Global Rail Practice Head at Oliver Wyman and a speaker at Rail Equipment Finance 2017, the surge comes from two main thrusts: safety and economics. It doesn’t take a computer science degree to know that a computer will not need rest, text while driving, or fall asleep behind the wheel. Think about it: Road traffic accidents are (roughly) the 14th highest cause of death in the U.S. Humans (most, at least) are wonderful creatures, but even without researching it, one could hypothesize that there is unlikely to be one legitimate study that favors human drivers over driverless technology as a means of reducing road traffic fatalities and accidents. On the economic side, with driverless technology, a looming driver shortage becomes less, well, looming. Rod


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February 2017

notes that logistics planning, supply chain management, insurance costs and fuel consumption can all be optimized when the human element is removed. It is not pretty, but most long-haul truck drivers will become one more roadside casualty of productivity. With interest in driverless technology continuing to grow. I asked Rod his thoughts on the technology and its implementation. First, I asked about the timing for implementation. Rod told me that “technology is largely available now or in final test,” and that “several states

Rail must find a way to be something other than the transport mode of last resort. already allow use of driverless trucks— implementation is now largely a commercial carrier decision.” I asked Rod about the best type of implementation for driverless technology. He said, “Long-haul trucks are easier to do than short-haul trucks.” I asked him about the application hurdles of driverless technology. In other words, would there need to be a lane added to Interstate 80 or Interstate 95 in order for states to approve the use of driverless tech? I was surprised at the answer: “Both concepts are out there without a clear direction. However, any additional lanes would be interior, HOV-style lanes.” In answer to today’s million-dollar question, “What will the Trump Administration have to say about driverless

technology?” Rod answered that the President has said, “Nothing yet, but if we expect regulation (generally) to be reduced, then this promotes quick adaptation of the technology.” In the competitive discussion between rail and truck, the human element and its connection to cost has always been a factor. The railroads are busy (and correctly so) fighting Washington on lowering crew sizes while support for driverless technology has been moving ahead at a rapid pace. Contemporaneously, rail has been looking for ways to improve intermodal growth on routes of different length to try to peel away some of the business that currently or ultimately may be allocated to truck. Could driverless technology be as impactful to railroad loadings growth as the loss of coal loadings? We heard it at REF 2016 and expect to hear it again at REF 2017: For rail transportation to remain vibrant and competitive, rail must find a way to be something other than the transportation method of last resort. Driverless technology adds another layer of urgency to that issue. Its impending implementation makes it an issue the industry needs to prepare for today, now. Once the barn door is open, that horse (sans rider of course) won’t be back. Have you registered for Rail Equipment Finance 2017 yet? With great keynote speakers like Sergio Rebelo, Tokai Bank Chair in International Finance at the Kellogg School of Management; and Kenneth Fischl, Vice Chairman of the Marmon Group (a Berkshire Hathaway Company) as well as the best attendee list and networking in the industry, it is an event not to be missed. Go to and register today. The dates are March 5-8, in La Quinta, Calif. Got questions? Set them free at

February 2017 Railway Age