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ailway ge R A

March 2014 |

Serving the railway industry since 1856

Special RepoRt:

Keeping rAilroAds heAlthy

A collAborAtive ApproAch to cbr sAfety rAil fAstener choices expAnd


MARCH 2014 Features SPECIAL REPORT: Keeping railroads healthy


CeO perspectives from Jack Koraleski, Jim Squires, Michael ward, Carl ice, Hunter Harrison, Claude Mongeau, Dave Starling, Rich Timmons, and Joe Boardman

a gripping task for rail fasteners 43 CBR: learning to get along 48


Departments industry indicators industry Outlook Market People 100 years ago Meetings Products advertising index Classified

4 6 8 51 51 51 52 53 54

News/Columns From the editor Update watching washington Financial edge


2 10 17 56

On the COver watco Cos. great Northwest Railroad’s ayer Turn at almota, wash. Photo: Bruce Kelly


Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 215, No. 3. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print or Digital only versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Foreign $239.00 (U.S. funds) per year/$397.00 for two years for Air mail delivery. When ordering Both Print and Digital: $150.00 per year/$227.00 for two years in the U.S., Canada, and Mexico; $208.00 per year/$296.00 for two years, foreign. Foreign $308.00 (U.S. funds) per year/$496.00 for two years for Air mail delivery. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2014 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 1172, Skokie, IL 60076-8172, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 00338826.

March 2014 Railway age 1


From the Editor William C. Vantuono

Editorial and ExEcutivE officEs Simmons-Boardman Publishing Corp. 55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website:

Turning $25 into $14 billion


ow do you take a $25 investment and grow it into $14 billion investment of national significance? It’s not easy, but it can been done. Ask CSX chief executive Michael Ward. Five years ago, Ward was our Railroader of the Year. He described to me how, after graduating from the University of Maryland, his dad gave him $25 to apply to Harvard Business School. He was accepted, and enrolled following two years gaining practical experience running the family business (still in operation today as Mom Ward’s Sub Shop in Brooklyn, Md.). In the 36 years since graduating from Harvard Business School,Ward has put his practical experience and education to work at CSX, with great success. He recently returned to his graduate alma mater to talk about the railroad industry. “America’s freight railroads are investing in facilities, technology, and programs to meet the country’s growing consumption and transportation needs,” Ward told an audience of more than 200 business and policy leaders at a Harvard Business School panel last month. The panel, “What Moves U.S.,” was part of the Harvard Business School-hosted “America on the Move: Transportation and Infrastructure for the 21st Century” National Summit. The panel included leaders from the public and private transportation sectors who explored issues related to: balanced regulation; opportunities for connectivity, safety, and sustainability; and the impact of transportation, particularly the benefits and challenges of intermodal in the global supply chain. “CSX is up to the challenge of meeting our customers’ increasingly high expectations while creating jobs, rebuilding transportation infrastructure, and supporting global competitiveness for American businesses,” Ward said. “The nation’s freight railroads have literally been transformed in the nearly 35 years since they were partially deregulated, but there’s still much to do to 2

Railway age

March 2014

fully realize the economic and environmental advantages of freight rail transportation. “To continue leveraging those advantages, CSX plans $2.3 billion in capital investments in 2014 as the company builds for long-term growth and continues to deliver value for customers and investors. We’ve invested more than $14 billion since 2005 in making our network the safest and most efficient means of transportation in the East. Long term, we plan to invest 16% to 17% of revenue into the business each year—a combination of investments in core infrastructure and assets with strategic capital to support profitable growth—plus an overlay for a Positive Train Control system. “CSX investment in 2014 and beyond will support our intermodal business, a major growth driver based on the environmental and efficiency benefits of connecting ports with inland consumption centers while taking long-haul trucks off of America’s congested highways. It is estimated that approximately nine million truckloads in the Eastern U.S. are candidates for conversion to intermodal rail service. Priorities for us in 2014 include the construction of new facilities in Florida and Canada, and expansions of other facilities across the network. “Today, more than 90% of CSX intermodal traffic travels over doublestack-cleared routes, which can carry double the freight on the same number of railcars. That number will rise to the mid-90s in the next several years when we complete the National Gateway, our company’s publicprivate partnership designed to increase the flow of freight between mid-Atlantic ports and Midwestern consumption centers via doublestack intermodal service.” For someone who invested $25 to attend Harvard Business School, I’d say Michael Ward’s, and CSX’s, return on investment is pretty darn good.

ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher WILLIAM C. VANTUONO, Editor-in-Chief DOUGLAS JOHN BOWEN, Managing Editor LUTHER S. MILLER, Senior Consulting Editor CONTRIBUTING EDITORS: Alex Binkley, Roy H. Blanchard, Lawrence H Kaufman, Bruce E. Kelly, Anthony D. Kruglinski, Ron Lindsey, Ryan McWilliams, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Creative Director: Wendy Williams Art Director: Sarah Vogwill Corporate Production Director: Mary Conyers Production Manager: Jessica Cajas Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney WEstErn officEs 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman Assistant Editor: Jennifer Nunez George Sokulski, Associate Publisher Emeritus intErnational officEs 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, Keith Barrow, Kevin Smith customEr sErvicE: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, Railway Age,PO Box 1172, Skokie, IL 60076-8172, or call toll free 1-800-895-4389. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of SimmonsBoardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:



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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 Waste & Nonferrous Scrap All Other Carloads TOTAL U.S. CARLOADS

JAN. ’14 104,179 4,512 48,588 30,502 147,280 72,022 536,146 7,311 15,847 30,478 24,059 17,714 50,194 20,169 63,495 81,275 22,320 32,598 14,348 22,147 1,345,184

JAN. ’13 92,038 4,621 47,379 31,898 146,442 65,245 539,047 7,372 15,995 31,251 31,448 17,928 51,175 20,331 67,653 82,010 20,675 31,290 14,579 21,624 1,340,001

% CHANGE 13.2% -2.4% 2.6% -4.4% 0.6% 10.4% -0.5% -0.8% -0.9% -2.5% -23.5% -1.2% -1.9% -0.8% -6.1% -0.9% 8.0% 4.2% -1.6% 2.4% 0.4%








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




JAN. ’14 130,061 1,044,224 1,183,285

JAN. ’13 132.330 1,036,264 1.168,603

% CHANGE 5.1% 0.8% 1.3%

8,103 233,999 242,102

7,030 243,803 250,833

15.3% -4.0% 4.1%

147,164 1,278,223 1,425,387

139,369 1,280,067 1,419,436

5.6% -0.1% 0.4%


Source: Monthly Railroad Traffic, Association of American Railroads


% CHANGE 63.4% -3.3% 60.8% 51.3% 9.7% 25.7% 10.9% 109.5% 12.7% 9.5% 135.2% 78.2% 35.7% 33.3% -13.1% 17.5% -41.2%

JANUARY 2014 - 352,829 JANUARY 2013 - 362,843 290,000 300,000 310,000 320,000 330,000

340,000 350,000 360,000 370,000 380,000

Copyright © 2014 All rights reserved.



ORIGINATED JAN. ’13 28,092 17,329 14,820 8,384 21,270 5,470 8,713 4,833 17,576 9,077 1,146 1,174 16,091 7,687 48,926 8,396 143,859



ORIGINATED JAN. ’14 45,909 16,755 23,835 12,683 23,330 6,878 9,664 10,125 19,812 9,941 2,695 2,092 21,835 10,246 42,514 9,862 84,653


Transportation (train and engine) 65,992 (1.15%)

Executives, Officials, and Staff Assistants 9,825 (-0.23%)

Professional and Administrative 14,049 (-0.66%)

TOTAL EmpLOYEES: 162,286 % CHANGE FROm JAN. 2013: 0.15% Transportation (other than train & engine) 6,647 (-2.12%)

Maintenance of Equipment and Stores 29,765 (-1.36%)

Maintenanceof-Way and Structures 36,008 (-0.11%)

Source: Surface Transportation Board

EmpLOYmENT Up YEAR-OVER-YEAR, DOWN FROm DECEmBER Figures released by the Surface Transportation Board show Class I railroads employed 162,286 people in mid-January 2014, up 0.15% from January 2013, but down 0.32%, or 524 employees, from December 2013. Only Transportation (train and engine) gained ground from a year ago, however, up 1.15% and countering losses in every other category. Only two categories advanced from December 2013 levels, led by Professional and Administrative, up 1.17%. 4

Railway age

March 2014

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Industry Outlook BNSF taking bids on oil tank cars

Courts clash over California HSR a California appeals court has put on hold an earlier legal order by a Superior Court judge halting funding of California’s high speed rail project, saying it will review the matter over funding. The appeals court decision, Feb. 14, 2014, stays the lower court’s decision to bar the issuance of any state bonds to pay for the 700mile project’s first phase in the Central Valley. That ban would have forced the California High Speed Rail association (CHSRa) to rely on federal funds, at least initially, which are unlikely to be replenished due to hostility within the House of Representatives to support the HSR effort. (The House provided no federal funding for HSR programs in the fiscal year 2014 budget, passed earlier last month.) The decision by the 3rd District Court of appeals does not reverse the lower court decision, but it could give rail officials some hope that they can escape a legal situation that could jeopardize the project. The appeals Court said it was granting CHSRa’s request for a fast-track review of a decision by Sacramento County Superior Court Judge Michael Kenny, which found that state had violated safeguards established in a 2008 bond act and did not have the right to issue any more bonds.

STB sets new date for hearing on competitive switching rules The Surface Transportation Board announced last month that it will hold a public hearing on March 25-26, 2014 “in Petition for Rulemaking to adopt Revised Competitive Switching Rules, eP 711, to explore issues surrounding The National industrial Transportation league’s (NiTl) petition to modify the Board’s standards for mandatory competitive switching.” NiTl has proposed that certain captive shippers located in terminal areas be granted access to a competing railroad if there is a working interchange within a reasonable distance (30 miles, under NiTl’s proposal), STB notes. STB has received numerous comments in response to NiTl’s proposal, and has scheduled the hearing to explore the issues. The hearing will be open for public observation. The Board has already received notices of intent to participate and summaries of testimony, as the upcoming hearing is a rescheduling of a postponed October 22, 2013 hearing on this matter. STB’s notice may be viewed at STB’s website, 6

Railway age

March 2014

BNSF Railway, the industry’s largest transporter of crude oil, last month announced plans to purchase its own fleet of up to 5,000 crude oil tank cars that will be built to safety standards exceeding the industry’s voluntary CPC-1232 specification for DOT 111 hazmat cars. The CPC-1232 standard has applied to all DOT 111 cars built since October 2011. “Our tank car RFP represents an important milestone in the improvement of safety standards for the transportation of crude by rail,” BNSF said. “it is a significant voluntary commitment that may help accelerate the transition to the Next generation Tank Car and provide tank car builders a head start on tank car design and production, even as the Department of Transportation, railroads, and shippers continue to engage in the formal rulemaking process. BNSF believes that the RFP process will provide market participants more certainty, sooner.” BNSF’s tank cars are to be built to exceed the stronger new standards the industry voluntarily adopted in October 2011 for the CPC-1232 jacketed tank car and will add the following new safety requirements: • Body shell and head ends built of 9/16-inch-thick steel. • Equipped with 11-gauge steel jackets and full-height, half-inch-thick head shields. • A thermal protection system that incorporates ceramic thermal blanketing and an appropriately sized pressure relief device capable of surviving an ethanol-based pool fire. • A bottom outlet valve handle that can be disengaged to prevent unintentional opening. BNSF’s plan to purchase its own tank car fleet is unusual in an industry where most tank cars are owned by leasing companies, which lease them to shippers, or by shippers themselves. Crude oil refiners like Phillips 66 and PBF energy buy their own cars as well as lease them.

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Market Florida to fund Orlando Airport rail station Florida gov. Rick Scott last month announced a financial package of up to $215 million to assist construction of a rail station at Orlando international airport that would would allow eventual service by Orlando SunRail regional passenger rail, whose initial phase is now under construction, and by Florida east Coast industries’ (FeCi) proposed all aboard Florida service. FeCi and the airport reached accord last October on rail service to the airport. gov. Scott has set aside $123 million in his proposed budget this year, with more to follow next year, presuming he is re-elected. The proposed budget also must be passed by the state legislature. This is considered likely. all aboard Florida would pay the airport $2.8 million annually for rent, plus up to $1.50 per train passenger who leaves from Orlando. FeCi also would spend $50 million to build a maintenance facility at the airport and pay more than $580,000 a year to lease the land for it. Construction on

North America AGENCE METROPOLITAINE DE TRANSPORT (AMT): Signed an agreement to buy the Deux-Montagnes line in Montreal from CN for an undisclosed price. The purchase is subject to final approval by the Quebec provincial government. AMTRAK: Deployed the first of 70 new aCS-64 electric locomotives from Siemens Rail Systems in service on the Northeast Corridor. CHSRA: approved right-of-way engineering and surveying contracts with five California firms, including: Chaudhary & associates, inc.; Hernandez, Kroon & associates inc.; Mark Thomas and Co., inc.; O’Dell

the all aboard Florida system, originally planned to begin in 2013, is now expected to start sometime this year. The higher-speed rail (HrSR) proposal envisions linking the airport and downtown Orlando (pictured above) with west Palm Beach, Fort lauderdale, and Miami. extensions north to Jacksonville and west to Tampa also are envisioned.

engineering; and Quad Knopf, inc. The state has spent $95 million to date on the project, besieged by legal woes (see p. 6). DISTRICT DOT (WASHINGTON, D.C.): issued a Request for Qualifications “ to firms interested in submitting Statements of Qualification (SOQs) to design, build, operate, and maintain an integrated premium transit system,” including bus and streetcar lines. GRAND RAPIDS, MICH.: Hired HDR, inc. to revive a streetcar plan for the city, using a six-year-old study as a baseline for the effort. IRVING OIL LTD: announced plans to voluntarily convert its fleet of older DOT-111 tank cars used in CBR

(crude-by-rail) service to meet higher recommended safety standards by the end of april.

Worldwide CZECH RAILWAYS: Received its first set of Railjet long-distance coaches from Siemens. RUSSIAN RAILWAYS: announced plans to modernize its motive power fleet this year with the acquisition of 629 new locomotives at a total cost of $2.17 billion. UKRAINIAN RAILWAYS: Suspended operation of all 10 HRCS2 electric multiple-units (eMUs) supplied to the railroad in 2012 by Hyundai Rotem for intercity operations.

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Railway age

March 2014

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Update Supply BriefS

Mexico’s stalking railroad horse

west Brookfield, Mass.-based freight car lessor Boxcar Services llC has merged with Vertex Rail Technologies llC to form Vertex Rail Manufacturing. Beginning in second-quarter 2014, Vertex Rail will manufacture tank cars, boxcars, and covered hoppers at facilities located in worcester, Mass., and wilmington, N.C. Vertex says it will offer 31,800NCNi gallon, 29,000Ci gallon, 25,500Ci gallon, and 23,500Ci gallon tank cars built to aaR CPC-1232 standards for crude oil and ethanol, as well as a 33,500-gallon pressure tank car. The worcester facility has the capacity to produce up to 18 tank cars per week; the wilmington plant is large enough to support production of up to 50 tank cars per week, plus, with new designs, Plate F 286K gRl boxcars, and covered hoppers of 3,300- and 5,000-cubic-foot capacity.

Wabtec to acquire fandstan electric wabtec Corp. has signed a $215 million cash agreement to acquire london, england-based Fandstan electric group ltd., which has annual sales of about $235 million. Fandstan electric is a rail and industrial equipment manufacturer that designs, manufactures, and installs electrical current and data collection products for a variety of markets, including rail and tram transportation, industrial, and energy. The company’s highly engineered products include pantographs, third rail shoe gears, electrical contacts, and brush holders. Fandstan electric has about 1,000 employees and operations in the U.K., europe, China, australia, and the U.S.


Railway age March 2014


railway reform bill that has been approved by the lower house of Mexico’s Congress and, if approved without significant changes by the Mexican Senate (upper house) would impose a form of open access, threatens to have significant negative impact on the country’s two largest railway concessions, Kansas City Southern-owned Kansas City Southern de México, and Ferromex, owned 74% by Grupo México and 26% by Union Pacific. Grupo México also owns Ferrosur. KCS derives close to 50% of its revenue from KCSM; it and Ferromex combined move about 90% of Mexico’s rail traffic. The proposed Mexican legislation would give third-party operating companies access to the country’s existing rail network, which was privatized in the late 1990s. The legislation is currently with the Mexican Senate for further discussion and a vote. Unlike Mexico’s current railway concession structure, the proposed legislation states that new concessions will be granted only to private companies that develop new infrastructure. The bill has seven main objectives: Confirm that the nation will maintain ownership of the railway system.

Guarantee the interconnection between railways and establish an appropriate reimbursement method between users (however the bill does not specify what reimbursement mechanism is to be used). Develop additional point-topoint railways and branches that require neither government permits nor concession status to be constructed and operated. Revise the reasons under which a concession may be canceled. Create an inter-system substitution mechanism among concessionaires. Change concessionaires’ social (including noise regulation) responsibilities. Maintain the free-tariff fixation mechanism, except where competition does not exist. Two new types of railway concessions are envisioned: Construction and operation of railway infrastructure by one company; and freight service provided by a third party, which would own the locomotives and rolling stock and pay the infrastructure concessionaire for access—effectively open access. “We believe the proposed reform is ambiguous and includes a number of flaws regarding historical investments and prices,” says one analyst. “It also does not include technical details. Mexican legislators have stated that

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current concessionaires have not invested in railroad infrastructure, an argument based only on track expansion. However, we know that the current concessionaires have invested billions of dollars in the existing infrastructure since privatization.” Said another analyst, “If material changes are made to the existing exclusive concessions, there is potential for it to be disruptive to rail activity in Mexico and to cross-border activity more broadly.” One analyst says it does not expect a fast-track approval, as is what happened in Mexico’s lower chamber, where the bill was introduced in early December

2013 and approved February 4, 2014. “Our analysis, including conversations with consultants, suggests that the Senate is likely to change the lower chamber’s proposal to correct what legislators see as excessive price increases and under-investment,” says the analyst. “Moreover, affected companies could take legal action to reduce the impact of the reform bill or to block it altogether.” KCSM and Grupo México, principal stakeholder in Ferromex, have gone on record as opposing the reform bill. KCSM says it has a constitutional concession in Mexico that cannot be changed through legislative action, and is exploring the use of an arbitration panel set up under provisions of NAFTA (North American Free Trade Agreement) to protect its interests. KCSM’s concession runs through 2027. Grupo México said the bill violates its concession agreement and would void its exclusivity rights, which run another 14 years.

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Railway age March 2014

EMD protests locomotive contract award Electro-Motive Diesel has filed a formal protest with the Illinois Department of Transportation over the Multi-State Locomotive Procurement contract for up to 35 125-mph diesel-electric locomotives, for which Siemens Industry received a Notice of Intent to Award on Dec. 18, 2013. IDOT, in conjunction with the California Department of Transportation and the Washington Department of Transportation, issued the procurement and formed the joint purchasing entities (JPEs). The 19-page protest letter, addressed to IDOT’s Chief Procurement Officer and State Purchasing Officer, Bill Grunloh and Gretchen Tucka, respectively, and signed by EMD Vice President Passenger Locomotive Sales Gary Eelman, says that the proposed award to Siemens “does not meet the Illinois Procurement Code requirement that ‘[a]wards shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the State, taking into consideration price and the evaluation factors set forth in the request for proposals.’ In short, Siemens is not a ‘responsible offeror’ and its offer is not ‘responsive’ with respect to the Procurement. EMD is confident that after IDOT reviews the facts presented in this protest, an award to Siemens will be deemed to be contrary to Illinois law, in addition to being inconsistent with the interests of the taxpaying public and the JPEs. . . Pursuant to Illinois General Assembly [law], any award for this Procurement must be stayed until this protest is resolved.” Among other items, EMD said in its letter, “IDOT’s technical evaluation team would have concluded the Siemens locomotive to be underpowered if this calculation were made. To be fair, the Siemens locomotive can achieve 125 mph, but only while operating downhill.”

Jim Young, Oct. 24, 1952— Feb. 15, 2014 Union Pacific Corp. Chairman James R. (Jim) Young, who worked his way from an entry-level finance position to Chairman, President, and Chief Executive Officer, died Feb. 15, 2014 after a two-year battle with pancreatic cancer. He was 61. A lifelong Omaha resident and the oldest of six children,Young was elected Union Pacific Corp. chairman in January 2007. He served as President and CEO from November 2005 until March 2012. Prior to those appointments,Young was Union Pacific Railroad President and Chief Operating Officer, a position he had held since January 2004. He was elected a director of Union Pacific Corp. in February 2005. Young began his railroad career with UP in 1978 and held a variety of

management positions. He was named Vice President-Customer Service Planning and Quality in 1997; Senior Vice President and Corporate Treasurer of Union Pacific Corp. in 1998; and CFO of Union Pacific Corp. in December 1999. “Jim was an icon at Union Pacific and in the railroad industry, a colleague and great friend,” said Union Pacific President and CEO Jack Koraleski. “Jim’s vision and leadership took Union Pacific to unparalleled heights, and his civic contributions made positive impacts on many communities across Nebraska and the entire Union Pacific system. Most important, he was a dedicated and loving husband, father, and grandfather. He will be greatly missed.” Young is survived by his wife Shirley, three children, and two grandchildren. Railway Age named Young 2013 Railroader of the Year. “As Jim Young so aptly puts it, ‘Union Pacific has evolved

from the company that built America by building the first transcontinental railroad to one that today is critical to the global supply chain,’” said Railway Age editor-in-chief William C. Vantuono in January 2013.

March 2014 Railway age 13


PATH, the bistate rapid transit railroad linking New York and New Jersey points, opened the first permanent (or “modernized”) platform at its World Trade Center Station in lower Manhattan on Feb. 25, 2014, just after the morning rush hour concluded. Platform A (shown at right) handles passengers traveling between the

World Trade Center and Hoboken, N.J. “When complete, the new WTC PATH station will have several more similar platforms,” PATH said in a notice it distributed to riders. “Moreover, the station will be at the center of the new WTC Transportation Hub, designed by renowned architect

Leave No Jumper Behind!

Santiago Calatrava.” For now, those using the World Trade Center-Newark service will continue to access PATH trains on temporary tracks 2 through 5, though ongoing work adjacent to and above the station is likely to cause other adjustments even to this location. PATH said its WTC Transportation Hub “will continue to open in phases through 2015.” PATH last month discontinued weekend service to the World Trade Center for the remainder of 2014, except for holiday weekends, to repair flood damage to the trans-Hudson tubes caused by Superstorm Sandy in 2012, and also to install CBTC (communications-based train control) on the route between lower Manhattan and Exchange Place in Jersey City, N.J. Some questioned the need for a total shutdown of weekend service.

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Railway age March 2014

Reliable Tools for the Long Haul

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PATH opens World Trade Center Platform A

Siemens Mobility

More LRT slated for Edmonton this summer Edmonton, Alberta, will be opening the latest extension to its light rail transit system in late June, when the 3.3-kilometer (2-mile) Northwest Line is extended from Churchill Station, in downtown Edmonton, to the Northern Alberta Institute of Technology. The extension is the first stage of a planned LRT expansion to the adjoining town of St. Albert, and represents the first LRT branch added to the original line, which opened in 1978 as the first modern LRT line in North America and has had several additions put in place over the years. Edmonton’s Northwest Line is expected to add 13,200 daily riders to existing ridership levels. The extension being opened in June traverses through a tunnel between Churchill and MacEwan stations, and on a center alignment on city streets from there to its terminus.

Estimated total project cost is C$755 million (US$684 million), with Edmonton paying C$158 million, Alberta province contributing C$497

million, and the Canadian federal government supplying C$100 million. New light rail vehicles (pictured) are being supplied by Siemens.

W o r l d ’s L a r g e s t C r a n k s h a f t M a n u f a c t u r e r a n d R e - M a n u f a c t u r e r

H e r m i t a g e , PA U S A 1 6 1 4 8 Te l e p h o n e 1 - 7 2 4 - 3 4 7 - 0 2 5 0 w w w . E l l w o o d C r a n k s h a f t G r o u p . c o m March 2014 Railway age 15

Update At the Daytona 500, bad weather and mechanical failure as well as a wreck took its toll on David Ragan and the no. 34 CSX “Play It Safe Around Railroad Tracks” Front Row Motorsports Ford Fusion. Ragan started from the rear of the field, 43rd position, after a last-lap wreck in his Gatorade Duel race three nights prior totaled his primary racecar and forced him into a backup car. Always a strong performer at superspeedways like Daytona, Ragan managed to gain several positions in his CSX locomotive-scheme-inspired blue and gold Ford before torrential rain and a tornado watch in central Florida brought out the red flag, halting the action for more than six hours. When the rains came, Ragan and his team had flashbacks to May 2013 at Talladega Superspeedway, when a

similar scenario resulted in Front Row Motorsports’ first win. But the events of last season would not repeat. After the green flag waved around 9:00 p.m., restarting the race, the No. 34 was struck with a mechanical issue. During a Lap 88 (of 200) pit stop, the car’s four-speed gearbox failed, forcing the team to take the stricken Ford Fusion to the garage. The FRM crew was able to replace the racecar’s blown

transmission and return Ragan to the track to gain some points. In a race filled with numerous wrecks, including two “Big Ones” near the end, attrition worked on the No. 34 team’s side, with Ragan gaining eight spots to finish 34th. Regardless of the outcome, CSX’s important “Play It Safe Around Railroad Tracks” public safety message reached tens of thousands of fans at Daytona International Speedway.

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RSSI invites you to join us for an opportunity to view the latest technology and check out new ideas in the industry. Registration for all railroad, transit and government attendees is FREE! In addition, private meeting space is available to all railroads for staff, training, and safety meetings at NO COST! Railway Systems Suppliers, Inc. 9306 New LaGrange Rd., • Suite 100 Louisville, KY 40242 Michael Drudy - Executive Director Phone: (502) 327-7774 • Fax: (502) 327-0541


Railway age March 2014


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2014 MAY 20-22, 2014 NASHVILLE, TN

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William C. Vantuono

CSX, Ragan debut at Daytona 500

Watching Washington FRank n. wilneR

CURE focus shifting to STB


he late federal appellate court Judge Learned Hand opined that regulatory commissions “fall into grooves ... and when they get into grooves, then God save you to get them out of the grooves.” Washington attorney Bob Szabo, a 30-year enduring pain in the buttocks for freight railroads in his role representing Consumers United for Rail Equity (CURE), is imaginatively close to that “god,” agitating how regulators have too long been in a groove by failing to recognize that railroads today are not the dirt-poor share croppers of pre-Staggers Act days, and that adjustments in regulatory freedoms are appropriate. Szabo protests that CURErepresented electric utility, farm, and chemicals shippers, with no effective transportation alternatives, pay more than necessary for railroads to be revenue adequate. He cites post-Staggers Act consolidations reducing competing major railroads from 30 to seven; the disappearance of neutral belt railroads that ringed large cities, allowing shippers options among competing line haul railroads; improved rail stock prices and dividends; and the railroads’ ease in attracting investment capital. He asks why phone companies and electric utilities must allow rate-regulated competition over their “transportation” assets while railroads are insulated from rail-to-rail competition absent evidence of competitive abuse. Increasingly, to the consternation of railroads, their investors, and many shippers not in agreement, Szabo’s voice has been heard in Congress and at the Surface Transportation Board (STB). Fact is that some shippers and railroads have brawled since railroads were infants and “cheap transportation” organizations demanded from Congress laws to corral the iron horse.

Inflexibility of those laws and subsequent restrictive regulation sent railroads hurtling toward bankruptcy and nationalization until the Staggers Act delivered partial deregulation. Notwithstanding bitter lessons of history, CURE, with Szabo as its perennial face, has come uncomfortably close to turning back the clock, and is a consequential reason for a responsive multimillion “Freight Rail Works” campaign directed at opinion leaders and lawmakers.

CURE insiders imply its legislative effort has made the STB more responsive. That CURE this year is shelving its legislative attack by ending its relationship with Szabo is said a strategy change, occasioned by recognition that the rail-friendly Republican House majority is not at risk in 2014 elections, and CURE’s Senate rail stalker-in-chief, Commerce Committee Chairman Jay Rockefeller (D-W.Va.), is retiring. CURE insiders imply its legislative effort has made the STB more responsive and its shipper members will redirect their resources to regulatory initiatives. Szabo says he will continue advising rail shippers. The direction of the STB surely has changed since the arrival of Chairman Dan Elliott. CURE previously viewed the agency as in a groove of regulatory capture by railroads, with the agency

derided as “a wholly owned subsidiary” of the rail industry, especially when its predecessor Interstate Commerce Commission advanced a proposal to allow coal rates to rise by 15% annually (which, until its rejection, even caused former Burlington Northern Chairman Walter Drexel to call the proposal “excessive and unwarranted”). Make no mistake that CURE’s congressional effort was successful, even though its proposed legislation to amend the Staggers Act never reached a House or Senate floor vote. CUREencouraged congressional oversight made railroads wary that too aggressive actions in a less regulated environment could precipitate sudden adverse legislative action. Passage in 1887 of the Interstate Commerce Act occurred within months of railroads being overconfident they had it blocked. Szabo—no relation to Federal Rail Administrator Joe Szabo—cites as CURE successes the railroads’ willingness to be more flexible in negotiating new shipper contracts; an increase in STB decisions favoring captive shippers; STB refusal to consider product and geographic competition when ruling on rate-reduction petitions; STB easing of shipper evidentiary requirements; STB introduction of alternative dispute resolution methods to reduce the number and cost of rate challenges; a new method for evaluating market dominance; and STB willingness to hold hearings on railroad competition, rate regulation reforms, revenue adequacy determination, and mandated reciprocal switching. Szabo has a proven talent for charming lawmakers. Whether the CURE legislative endeavor resumes depends on whether the STB embraces a new groove. As for railroads, uneasy lies the head that wears the crown. March 2014 Railway age 17

special RepoRt: Keeping RailRoads healthy

RailRoads aRe opeRating at peak safety, pRofitabilty, and pRoductivity levels. let’s keep them that way

18 Railway age March 2014

Mandatory competitive switching, an issue now before the Surface Transportation Board (see pp. 6 and 17), threatens to drive up operating costs and undermine the industry’s ability to invest. The AAR has broadened its argument. “We’ve done a good job in expanding the discussion beyond what we would lose financially,” says Hamberger. “We’re able to show what would happen if 7.5 million annual switch moves become controlled by shippers. We’re looking at a greatly reduced ability to plan, mounting operational problems, increased labor and fuel costs, and crowded yards. We’re able to show that mandatory competitive switching would result in close to a dozen extra moves in many situations. But how do you show people the operational issues, and educate policy makers to the fact that railroading is not a retail industry?” Few people, even many truckers (who have become some of the railroads’ best customers, through intermodal), want to see 97,000-pound behemoths and double- and tripletandems rolling on the nation’s highways and bridges, tearing them up in the process and driving up highway repair costs by tens of billions of dollars. Railroads pay 100% of their infrastructure maintenance costs. Truckers pay less than 80%, a figure that plummets to 50% for 97,000-pound vehicles. That’s one side of the argument. The other is the potential damage to railroad revenues. “Right now we’re taking a look

Bruce Kelly


merica’s railroads today are handling more business more efficiently and safely and for better profits than ever before in their nearly 200 years of existence. They remain a growth industry. The record $15 billion they invested in 2013 will no longer be a record in 2014, considering that two of the Class I’s alone will be spending close to $10 billion. Shippers, though they continue to try to drive down prices, are paying on an adjusted basis an average of 50% less than they were prior to the 1980 Staggers Act, which partially deregulated the railroads. Since Staggers, railroads have invested close to a half a trillion dollars—yes, that’s right, trillion—in private capital for expansion, improvements, and maintaining a state of good repair. Access to capital allows the railroads to utilize state-of-the-art technology from a healthy supply industry. Railroads haven’t achieved all of this easily, and they will not retain it easily without the continued strong leadership of the seven Class I chief executives who have joined Railway Age in putting this special report together. The rosy state of things that generally prevails in the industry is all too well known, and the railroads’ healthy stock performance strengthens the prevailing belief of many economists that railroads are recession-proof. As Warren Buffett is said to have replied when asked why he paid $43 billion for BNSF: Because the railroads can’t be moved to another country. But don’t kid yourself. America’s railroad industry still needs to be vigilant, because wherever there is success, there are always those who seek to beat it down, for reasons of self-interest. Add to that a rancorous, adversarial political atmosphere, and a Congress whose members have little or no knowledge of how close the industry came to collapse before President Jimmy Carter signed the Staggers Act—and what would happen if those regulatory freedoms were reversed. What are some of the danger signs? Railway Age asked Association of American Railroads President and CEO Ed Hamberger to comment. The key issues are: truck size and weight—an issue that many thought was dead, but that crops up every time a multi-year surface transportation bill is up for reauthorization; and reregulation, specifically, mandatory competitive switching.

By williaM c. Vantuono, editor-in-chief

Keeping RailRoads healthy

Sean Kelly

BNSF (pictured) will invest a record $5 billion in capital this year. Union Pacific upped its capex ante to $4 billion for 2014.

at the rail-to-truck diversion issue,” says Hamberger. “Advocates of larger trucks say that there will be little or no diversion because the railroads will lower their rates to keep the business. We know that’s not the case, mainly because railroads are already pricing to where they can. We estimate a revenue loss of up to $6.5 billion. The DOT studied this issue in 2000; another DOT study is under way. This issue is far from being resolved.” On top of all this, there is crude by rail, the safety of which is now “front and center,” says Hamberger: “CBR is occupying a large part of the industry’s safety focus. We’re emphasizing that there is a shared responsibility among all players—railroads, oil producers and refiners, tank car builders. We take our safety record—99.998% of hazmat shipments moved without incident—very seriously. Railroads are safe, and trying to become even safer. Overall, crude oil is a good-news story, from the standpoint of energy independence. Railroads have an important role to play, as do pipelines and barges. CBR is a good business, and we are making investments in it because we expect a good return.” Then there’s PTC and its looming Dec. 31, 2015 implementation deadline. “Class I’s and passenger railroads are pushing hard to get it done,” says Hamberger. “One of the biggest obstacles is antenna installation, and all the permitting

and environmental issues associated with it. We’re saying there should be a categorical exclusion, an exemption, for antenna poles we install on our own rights-of-way. The FCC is attempting to streamline the process, but so far it’s not very streamlined. It’s a process that could drag on and on.” “That this industry has been able to step up and make the capital investments it requires is a great testament to what the Staggers Act has done, as well as to the executive leadership teams at the railroads,” says Hamberger. “We have a well-maintained system with an excellent safety record. 2013 looks to be our safest year ever. Day in and day out, it’s how we do things. Balanced regulation—which this industry has had for more than a generation—will ensure that we can continue to serve our customers, safely.” Let’s not forget those 550-plus short lines and regionals, which are so vitally important to the local communities they serve, and which are diligently working to reauthorize the investment tax credit they got a few years ago. And then there’s Amtrak, the backbone of America’s passenger rail network, in need of major public investment so it can continue to grow. Railway Age invited North America’s railroad leaders to comment on these and other pressing issues. You’ll find their perspectives in the pages that follow. RA March 2014 Railway age 19

Keeping RailRoads healthy

CReAting vAlue foR CustomeRs


Jack Koraleski, President and CEO, Union Pacific Corp.

he rail industry plays a vital role in America’s economy. Railroads thrive by creating value for their customers, and that’s exactly what we do at Union Pacific. Every component of our strategy enables us to create value for our customers—by improving safety, standardizing operations, investing in technology, capacity, and infrastructure, and operating efficiently. Every decision we make, every project we undertake, every dollar we spend is measured against the yardstick of customer value. We help our customers stay competitive, both domestically and globally, by providing efficient and reliable transportation solutions. Many factors affect our more than 10,000 customers—global economies, energy supply and demand, and even weather conditions. These factors in turn can cause major shifts within our business sectors. We carefully prepare for these fluctuations so we can ensure Union Pacific provides the capacity and service our customers require. The agricultural sector provides a good example of our resourcing capabilities. In 2012, we saw a drop in grain volume due to a drought. One year and a bumper crop later, we saw a huge jump in volumes and were able to respond quickly to meet our customers’ needs. In certain cases, such as grain export volumes, we saw an increase of more than 90% vs. the prior year. This helped offset some of the areas where business wasn’t as strong. Union Pacific’s strategy for success 20 Railway age March 2014

begins with our customers: We create value for them by operating safely, providing first-rate service, and focusing on efficiency every day. This approach not only drives bottom-line results and improves our operating ratio, but it has helped us generate record shareholder returns. That’s how we’re able to reinvest and continue to grow our business. This spring, we’ll open a new facility in Santa Teresa, N.M., which will bolster the fluidity of train movement in the region. Upon completion, Union Pacific will have invested more than $400 million in the project, and, for the first time ever, southern New Mexico will have a key inland port, positioning the Santa Teresa area as a strategic focal point for goods movement in the Southwestern U.S. This facility will create hundreds of good-paying

Every dollar we spend is measured against the yardstick of customer value. American jobs and generate numerous opportunities for our customers. It will significantly improve capacity and efficiency, which demonstrates our long-term commitment to deliver excellent service to our customers. Across our six business areas— Agricultural Products, Automotive, Chemicals, Coal, Industrial Products, and Intermodal—we’re continuing to

develop business opportunities in Mexico, where our unparalleled ability to link Mexico’s economic growth with U.S. origins and destinations is a key strength of the Union Pacific network. We recently introduced new intermodal service between Chicago and Monterrey, Mexico, giving our customers yet another way to transport goods across the border. Foreign direct investment in Mexico continues to present opportunities for Union Pacific, which is the only railroad with access to all six Mexican rail gateways. New crops should provide plenty of growth for our Agricultural business, especially in the first half of the year. We anticipate an increase in both domestic and export grain markets. Automotive manufacturers expect sales growth to continue. This looks to be good news for our finished vehicle and auto parts businesses. Our Industrial Products business will likely benefit from shale-related activity due to increased drilling supporting growth in frac sand and pipe shipments. Housing starts are predicted to exceed one million units for the first time since 2007, which is expected to drive demand for lumber shipments. Increases in commercial construction are expected to support growth in rock, metals, and other highway-related markets. As Union Pacific looks ahead to developing and supporting future business opportunities, our focus remains—as always—on creating value for our customers through safety, service, and efficiency. RA

Keeping RailRoads healthy

Technology cAn ImpRove woRkeR pRofIcIency


James A. Squires, President, Norfolk Southern Corp.

orfolk Southern is deploying groundbreaking technology on its road locomotive fleet to dramatically reduce fuel use and installing a revolutionary dispatching system to help plot train routes across its entire rail network. This new technology will help us increase ontime performance and reduce operating costs. However, technology alone is not enough to prepare us for the future. We’ve learned that a crucial part of successfully implementing new technology depends on how we communicate with our employees who are using the technology. LEADER (Locomotive Engineer Assist/Display & Event Recorder), NS’s flagship fuel-saving system developed with New York Air Brake, calculates and displays the optimum speed at which to operate a train, depending on topography and curvature of the track, the train’s length and weight, and other operating conditions. It’s a great system with proven benefits—tens of millions of dollars—if used regularly. Following LEADER’s cues, the engineer learns to back off the throttle before reaching the top of a hill, allowing the train’s momentum to carry it over the crest, so the engineer may not need to use the brake going down the hill because the train is moving at a slower speed. But that’s not the engineer’s instinct. Instead, he wants to power up the hill and apply the brake to slow the train

22 Railway age March 2014

after it crests. However that burns more fuel and puts more wear and tear on the tracks, exactly what LEADER was designed to correct. So how do you encourage employees to try use new technology? The answer may surprise you. Todd Reynolds, general manager of our western operating region, recently shared the story of how we were able to dramatically increase LEADER use

We must communicate with the employees who are using new technology, and reassure them that the skills they learn will not be wasted. on our Georgia Division. A group of road foremen met with engineers to explain LEADER’s fuel-saving benefits. After these one-on-one conversations, whenever an engineer started using the system, the supervisor made a point to thank the engineer. LEADER usage doubled in a matter of days. No incentives, no discipline—we just focused on giving positive feedback for good trainhandling performance. We met the same hesitancy to use new technology when we deployed Movement Planner, a train scheduling

tool we developed with GE that has the capability to look eight hours in advance across the network and sort through thousands of pieces of data, including hundreds of daily train schedules, to make the best decisions to improve the flow of trains across the network. Some of Movement Planner’s recommendations were counterintuitive to a dispatcher’s experience. For example, in response to a train delay on another division, Movement Planner may recommend moving a high-priority intermodal train into a siding to optimize overall network efficiency. In addition, some train dispatchers felt like Movement Planner was usurping their roles, the core of which was expertise in getting trains over the road. A key part of implementing Movement Planner was recognizing the dispatchers’ concerns and helping them to become more comfortable using the new system. We invited the dispatchers to share their local knowledge of their operating division with Movement Planner’s programmers, and once they mastered the new system, to help train dispatchers on other divisions. When introducing any new technology, we must be willing to reassure our employees that the skills they learn will not be wasted—for example, that an engineer proficient in LEADER and a dispatcher adept at Movement Planner have bright futures with Norfolk Southern. RA

Keeping RailRoads healthy

Safety iS a ReSounding SucceSS StoRy, but moRe can be done


Michael J. Ward, Chairman, President, and CEO, CSX Corp.

mong the many achievements of U.S. railroads, none stands out more than the astonishing and sustained improvement in safety over the last 30 years. That evolution was the result of many factors, but mostly by the commitment of railroaders everywhere to safe work practices and attention to every detail. Science and technology played a role, too, with innovations that include computer-based train monitoring systems and advanced railcar health detectors that provide early warnings of potential problems. Market forces also contributed to safety, with customer demands for increasingly

“Safety is a Way of Life” is one of CSX’s five Core Values.

24 Railway age March 2014

reliable service and damage-free transit, which also produced business growth and supported greater network investment. And society pressed for ever-higher safety standards. The results speak volumes: The employee injury rate in 2012, the last year for which official data are available, was down 85% from 1980 and down 51% from 2000. The train accident rate was down 80% from 1980, and 44% from 2000. The grade-crossing collision rate was down 82% from 1980 and down 45% from 2000. Each of these categories achieved record lows in 2012, and preliminary 2013 data suggest the trend continues.

It’s an accomplishment shared by all, but every injury and every accident reminds us that more must be done to ensure that all of our employees go home safely to their families every day, and that every train moves without incident. Following are the factors that helped CSX: • Values: We made safety one of our five Core Values—Safety is a Way of Life—which acknowledges the highest priority placed on injury and accident prevention. • People: In addition to shaping a framework through our value system, we engaged the real experts—our fellow employees. In that regard, I trace some of CSX’s biggest gains in employee safety to the introduction of the safety overlap process. Employees at the local level identified safety concerns. If the resources needed to address them were unavailable, the safety issue would be elevated, ultimately to the Chief Operating Officer. We also invested in employee training, as well as building a culture that prized adherence to rules as the cornerstone of safety. A united front with our unions was important to all of these advances, highlighted by initiatives such as the Switching Operations Fatality Analysis that identified ways to work more safely in busy switching yards. • Investment: Substantial and sustained investments in our network hardened our infrastructure and reduced trackand equipment-caused derailments. We deployed additional machine vision

Keeping RailRoads healthy

technology to monitor equipment health. We also consolidated instruction for train crews and other front-line employees at our Railroad Education and Development Institute in Atlanta. Of course, train accident prevention is critical to the safe, reliable transportation of hazardous materials. Railroads have a strong record for safely moving these products, and 100% incident free remains our goal. CSX has a team of hazardous materials experts to help customers with loading and unloading procedures. We also train hundreds of first responders every year so that they are better equipped to deal with railroad incidents. • Public Awareness and Partnerships: Partnerships also are important to reducing grade crossing collisions. An industry wide focus on education and awareness, engineering solutions such as upgrading warning devices, and enforcement of traffic safety laws, all have contributed to a trend of fewer

collisions. We partner with Operation Lifesaver to supplement our own company initiatives. CSX has worked with local officials to close unnecessary crossings, and improved motorist sight lines. We also conduct a highly visible Play it Safe campaign.

More must be done to ensure that our employees go home safely to their families every day. While crossings have been a success story, injury and loss of life to people illegally on our property regrettably remains a stubborn problem. CSX is further intensifying safety awareness, law enforcement partnerships, and other measures to keep pedestrians off tracks. What does the future hold? Railroads

are working on Positive Train Control (PTC), spending billions to develop technology from scratch. An extension to the 2015 deadline is necessary to ensure that the technology is properly developed. Once complete, PTC will undoubtedly add another layer of safety to an already safe industry. While the rail safety story is a resounding success, that accomplishment is tempered by the terrible tragedy last summer in Canada, and the public’s growing concern over the transportation of oil by rail. The railroads, along with oil shippers, tank car owners, and federal officials, all are working together to find the most effective solutions and to maintain the public’s confidence in U.S. railroad safety. America’s railroads are the global benchmark in freight transportation, and safety is a big reason. It’s also evidence of our commitment to employees, our customers, and the communities we serve. RA

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WWW.GBRX.COM 800-343-7188 MARKETING.INFO@GBRX.COM March 2014 Railway age 25

Keeping RailRoads healthy

RAil industRy gRowth is dRiving RecoRd cApitAl investment


ail volumes in North America in 2013 were the highest since the Great Recession at nearly 43 million units, a good indication of the degree to which the economy has continued to recover. Freight railroads continued to make some of the most significant capital investments on record in 2013, just as they did during the Great Recession. Freight railroads are investing massive amounts of private capital to improve the safety and reliability of our privately funded rail networks, and to expand capacity to accommodate the customer growth occurring on those networks. It is important for all members of the rail industry to continue to help shippers, public policy makers, and the communities we serve understand what a valuable and sustainable asset our privately networks have become to both the national economy and to the individual shipper and consumer. That story always begins with safety and service. Railroads are a safer place to work than any other transportation mode by creating a safety culture of commitment and compliance in cooperation with our employees to identify and reduce safety risks in the first place. BNSF’s employees share our safety vision of an injury and accident-free workplace. We have supported that safety culture by continually investing in new technologies that help make our railroads even safer and more efficient by identifying potential safety issues before they can cause an accident or injury. 26 Railway age March 2014

Carl Ice, President and CEO, BNSF Railway We have also significantly improved railroad service over the long term by investing in track infrastructure, equipment, and technologies that have helped make our physical assets more reliable and productive. Those safety and service improvements have helped attract significant volumes of traffic back to the rail industry, which have helped improve our returns on investment and generated additional free cash flow to reinvest in the growth those improvements have been generating. That is the kind of sustainable longterm business model most companies and industries want to achieve. That model enabled railroads to help U.S. agricultural producers develop the world’s most extensive network of grain unit train facilities to become even more competitive shippers and exporters.

Our business model is one most companies and industries want to achieve. It enabled the rail industry to attract millions of truckloads of consumer goods once lost to highways back to railroads in the form of intermodal traffic. Intermodal not only became a growth engine for most Class I railroads, it enabled many of the nation’s best trucking companies, steamship lines, and logistics companies to

become some of our best customers. It enabled the rail industry to help develop one of the most important new fuel sources for electric power in the U.S. in a half century in the Powder River Basin. And now it is helping the U.S. economy achieve energy independence by enabling North America to develop its huge oil and gas shale reserves, which promise to attract more job-creating industrial production and manufacturing back to our economy. Rail is helping U.S. manufacturers and producers of products ranging from automobiles and aircraft, to farm and construction machinery, to lumber and steel, to fresh and frozen produce, to fertilizer producers and wind turbine manufacturers, expand production, and create jobs. For BNSF, our 2014 $5 billion capital plan exceeds the single-year investment record we set in 2013 by $1 billion. More than $900 million will be invested in expansion and maintenance in our Northern Corridor alone, which has become a significant growth corridor for many of the industries we serve. Our capital investments are one of the strongest indicators that we are focused on improving our ability to meet our customers’ service expectations, increasing our capacity where there is growth, and strengthening our railroad so that it remains the safest and most effective means of ground transportation for our customers, our people, and the communities where we operate. RA

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Keeping RailRoads healthy

OpeRAting A 21st centuRy RAilROAd E. Hunter Harrison, President and CEO, Canadian Pacific Railway


here’s no secret to running a successful railroad. The first thing to do is to get the very best people you can working for you, and tell them very clearly what it is you expect from them. Then, you let them do their job. That’s all there is. Naturally, this explanation is a broad brushstroke, but the reality is pretty close to what I’ve just said. If you talk to your people, get them working with passion, and give them clarity on direction and expectation, then they will perform for you every time.You’ll find they will surprise you with what they can do. If you accept this philosophy as your starting point, you’ll find it has direct application to many other areas. Communication with all your stakeholders—investors, communities, regulatory—should be just the same. Open, honest, and frequent. The most important element is to explain to people what you’re doing and why. And the other thing is: Just do what you said you would do. It means delivering on our promises. Here’s an example of what I mean.

Since becoming CEO of Canadian Pacific, the most fundamental change that I and my team instituted was to set a schedule and stick to it. It sounds basic, doesn’t it? You’re right: It is, but often, railroaders make excuses for failing to maintain a schedule rather than just doing it. Consider this: If we can’t tell our customers when we’ll deliver, and commit to it, how can we possibly expect them to entrust us with their shipments? Railroads are operating companies. Watch your costs and your assets. You’ve surrounded yourself with good people. You’ve made commitments to your customers, and you’re delivering. Your credibility is good, and your people are working toward a common cause. What’s next? Your costs and your assets are next. Control your costs and watch your assets. It’s just smart business and it teaches you discipline. At CP, all it took was for us to drill down to the details and start asking, “Why are we doing it that way?” And, “Is there a better way?” I’ll be honest, the process itself wasn’t always easy, but the results

The changes at CP haven’t been easy, but they’ve been well worth it.

28 Railway age March 2014

have been worth it. “Why” is both a challenging and liberating question. It allowed us to look at ourselves honestly and make the operating changes we needed to become better. It goes without saying that none of this is possible without running a safe operation. Safety is good business. Safety is the right thing to do. Period. That should be enough incentive by itself. But

Get the best people, and explain to them what you’re doing and why. beyond that, it should be clear to us all that the industry’s license to operate depends on operating safely, and proving to the public that we do so. Teach people the right way to do something, and expect nothing less than total compliance. It’s not worth the risk, otherwise. Since I started railroading, I’ve been fortunate to have participated in changes that have turned the rail industry into a safe, profitable business and a great place to work. To those of you joining our industry now and seeking to become leaders, you’re coming into a great industry at a great time—and you’ll be responsible for instituting the next round of changes. Our industry’s success depends on your ability to keep adapting. If you can welcome these challenges, and keep asking “why,” you’re heading in the right direction. We’re counting on you. RA

Interest Form For nrC 2014 raIlroad ConstruCtIon and m aIntenanCe e quIpment a uCtIon – m ay 1, 2014

Please tear out form and fax this information to the NRC at 202-318-0867 or email to Ashley Bosch at Auction begins 9 a.m. in Austinburg, OH, Thursday, May 1, 2014 – expected finish by 2 p.m. Located at Quality Track Equipment, a division of Delta Railroad Construction, 2950 Industrial Park Dr., Austinburg, OH, 44010 Equipment inspection available 9 a.m. - 5 p.m., April 30, 2014. To schedule shipment or delivery of equipment for the auction, Email: Happy Hour/Social event: Wednesday, April 30, 5:00 p.m. to close (midnight) – The Lodge & Conference Center at Geneva-on-the-Lake, 4888 North Broadway (Rt. 534) Geneva, OH 44041 Hotel: Discounted room block available at The Lodge & Conference Center at Geneva-on-the-Lake, 4888 North Broadway (Rt. 534) Geneva, OH, 44041. Call 1-800-801-9982 and refer to the Delta Railroad Group #4G72ZF.

Name: _________________________________ Company:______________________________ Phone: _________________________________ Email:_________________________________ Check all that apply: _____ My company is interested in donating equipment to the Auction. 100% of the proceeds of the sale will go to the NRC Safety, Training and Education Fund. My company will receive the tax deduction benefits. _____ My company is interested in consigning equipment to the Auction. My company will receive 100% of the proceeds of the sale, minus a 2% seller’s fee which will go to the NRC Safety, Training and Education Fund. _____ My company is interested in sending a representative to consider purchasing equipment at the Auction. I understand that I do not need to register ahead of time with the NRC for this event, but should contact Blackmon Auctions for an Official Auction Catalog. The auction will begin promptly at 9 a.m., May 1, 2014. Auctioneer: Blackmon Auctions, Inc. Thomas Blackmon Jr., Vice President Phone: 501-664-4526 • P.O. Box 7464, Little Rock, Arkansas 72217

Host Association: National Railroad Construction & Maintenance Association (NRC) Chuck Baker, President Phone: 202-715-2920 • 500 New Jersey Ave NW, Suite 400, Washington, D.C. 20001

NRC Auction Committee: Danny Brown RailWorks 810-397-3533

Mark Gaffney Stacy & Witbeck 510-748-1870

Jay Gowan Harsco Rail 803-822-9160

Paul Laurello Delta Railroad Construction 440-992-2997

Dean Mackey Progress Rail Services 800-962-2902

Greg Spilker Progress Rail Leasing 262-309-3586

Keeping RailRoads healthy

OuR ROle As A bAckbOne Of the ecOnOmy


Claude Mongeau, President and CEO, Canadian National Railway Company

N’s agenda of Operational and Service Excellence is aimed at finding the best balance between high levels of operating efficiency and safety, and improved customer service. CN record of growing its business at low incremental cost and generating solid financial results has reinforced its role as a true backbone of the economy and a key part of the solution in fostering the prosperity of the North American markets it serves, creating value for customers and shareholders alike. Of all the innovations that CN has initiated over the last four years, perhaps none has greater significance than our bold program of supply chain collaboration. We are an engine of supply chain capability that helps grow markets, and ultimately helps our customers succeed. We know that the next great step in expanding our role in the economy is to look at what we offer customers from an end-to-end perspective, with a view to improving efficiency with our supply chain partners for the entire process. To achieve that, we’ve been going beyond hub-to-hub speed and reliability to focus on the first- and last-miles of our service, including better car order fulfillment and switch window compliance for merchandise traffic, better spotting reliability for grain, and daily engagement with all ports and intermodal terminal operators. This requires an intense focus on every detail of the receiving and origination part of our journey, with one outcome in mind: 30 Railway age March 2014

better end-to-end service for our customers so that we can help make them become more competitive in their markets. Our agenda is anchored on running a safe railway—it’s the overarching imperative in everything we do. As a backbone of the economy we take our role very seriously when we’re entrusted to move dangerous goods. Our safety record is solid and has been improving continuously for a number of years. Our safety commitment is built on a culture that runs deep throughout our organization. Nevertheless, in the tragic aftermath of the Lac-Mégantic accident, we believe the rail industry and other stakeholders must take further steps to advance the safe transportation of dangerous goods, which are key commodities in everyday life. For CN the central issue is managing the risk

We are an engine of supply chain capability that helps grow markets, and ultimately helps our customers succeed. of low-probability, high-consequence incidents. In this context, it’s essential to keep in mind that a full 99.99% of CN and rail industry movements of dangerous goods arrive at destination

without a release caused by an accident. That being said, the first and foremost imperative for the rail industry and for tank car owners today is quickly solving the systemic risks posed by DOT-111 tank cars. CN is clear in its stand that old DOT-111 tank cars must be retrofitted or phased out, and that there be a reinforced standard for new tank cars built in the future. Second, CN is committed to making its record of transporting 99.99% of dangerous goods without a release even better. While there are limited opportunities for CN to re-route dangerous goods away from urban areas, CN will do so when it can. And CN is also taking clear action to prevent and mitigate dangerous goods accidents through targeted corridor risk assessments that focus on enhancing train operating practices and flaw detection capability. Third, when accidents do occur, CN has in place comprehensive emergency response plans and resources, and will continue to work with other stakeholders on developing stronger emergency response capabilities through training support and mutual aid intervention protocols. CN has an unwavering commitment to safety and always strives to responsibly deliver Operational and Service Excellence. CN’s broad safety record in 2013 continued to improve over that of 2012, which was the best year on record for main-track accidents. Since 2002, CN’s main-track accidents have declined by more than 50% despite rising freight volumes. RA

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Railway Age has assembled a world-class collection of experts on a wide range of subjects in the world of rail, to get the answers that are important to Railway Age readers. This new paid service, The Railway Age Expert Network, offers you access to 27 experts on a broad range of rail topics.

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Keeping RailRoads healthy

Five things FoR shippeRs consideRing inteRmodAl


t’s no secret inside the railroad industry and investment community that the intermodal sector is growing rapidly. In reporting KCS’ 2013 year-end revenues, we told the market that the intermodal sector is up year over year and one of the fastest growing areas of our business. For KCS, the intermodal sector is providing significant, real potential for long-term growth driven by cross-border traffic; automotive plants, along with their respective Tier II suppliers, coming on line in Mexico; and a market share shift from truck to rail. We know that KCS’ current franchise cross-border intermodal market share represents less than 3% of the available market. We also know that 3.1 million truckloads originate or terminate in KCS’ target market with 50% of loads moving to and from locations deep in Mexico. Our ability to convert more traffic from truck to rail and secure more of the available intermodal business depends on two things: serving existing customers well, and educating potential customers (third parties and beneficial owners) about the advantages of moving their products via intermodal. If I had only a short time to tell a potential customer why they should convert from truck to rail, I would focus on the following: • Ease of crossing the border. KCS’ rail network has operations in both the U.S. and Mexico, allowing KCS 32 Railway age March 2014

David L. Starling, President and CEO, Kansas City Southern to continuously improve transit time and equipment utilization and reduce terminal dwell. • New service offerings with gateway partners. KCS is only one interchange away from any major market in North America. These interchange gateways extend our network reach and that of every major railroad. For example, CSX’s mega-facility in northwest Ohio is increasing traffic through KCS’ intermodal facility in Kansas City, Mo. Norfolk Southern’s Crescent Corridor is helping customers cut transit times,

As freight patterns shift, KCS is in place with the capacity to serve a burgeoning market. avoid congestion in Atlanta, Ga., and providing KCS customers (cross-border customers in particular) with access to the northeast U.S. Our gateway strategy to extend our network reach by partnering with connecting carriers and supply chain partners is an industry strength and we continue to provide customer solutions beyond markets we serve directly. • Investing in the International Intermodal Corridor. KCS’ investments in intermodal facilities in the U.S. and Mexico is changing the landscape of the North American intermodal network,

bringing service to areas like Houston, Tex., where it didn’t exist before. In 2014, KCS will continue work to expand intermodal facilities at Puerta Mexico (Toluca/Mexico City), Salinas Victoria (Monterrey), Interpuerto (San Luis Potosi), and Kendleton, Tex. (Houston). We will also begin construction on a new intermodal facility in Wylie, Tex., centralizing KCS’ Dallasarea facilities. KCS intermodal facilities are state-of-the-art and adding capacity for the expected intermodal growth. • Changing regulatory environment for trucks. Driver shortages, more and stricter rules, and fewer hours on the road for truck drivers mean fewer available drivers and greater demand, which means shippers may need to be flexible with logistics planning. • Intermodal is a green option. Moving freight from truck to rail takes trucks off our overcrowded highways. Railroads are a more fuel-efficient option with a 75% smaller carbon footprint vs. truck. Plus, changes in emissions regulations for tractors are driving down the fuel economy. KCS proudly serves what is an ever-expanding intermodal frontier — Mexico. While larger U.S. railroads compete for east-west traffic with long-term deals and competitive rates, Mexico presents one of the last great opportunities for over-the-road conversion. As freight patterns shift, KCS is in place with the capacity to serve this burgeoning market. RA


America’s privately owned freight railroads invest more than $20 billion dollars annually in the nation’s vital rail network, connecting industries large and small to the growing national economy. For more information visit:

Designed to Move a Nation

Keeping RailRoads healthy

The conTinuous commiTmenT of shoRT lines Richard F. Timmons, President, American Short Line and Regional Railroad Association


n the beginning there were just short lines. But the ideas and dreams and visions of early local railroad entrepreneurs sprawled into small networks and gave to these early railroaders a sense of what might be possible. It seized the imagination of those now legendary industrialists of the late 19th and early 20th centuries. They attempted big things, struggled with unheard of challenges, and saw the potential of railroads even as they strived to expand their crude networks and coped with the poor science of the day. Yet these men and their ideas shaped America and American life every day and protruded into every dimension of a growing nation. Their thoughts and dreams spilled out in an endless parade. The Transcontinental Railroad and military logistics and operations during the Civil War opened the vast potential of the great plains, were the backbone of the Panama Canal, created domestic and foreign commercial markets for millions, exposed the abundance of our resources, put millions to work, and forcefully expanded their influence and networks across the continent. These small early railroads focused hard on meeting some demand for consumers. Despite the rapid growth and unheard-of technical and scientific breakthroughs that were in evidence in the railroad industry, the economics of service and competition were the principles that made expansion and profits possible. 34 Railway age March 2014

Today the freight railroad networks that have evolved throughout North America are the envy of the world. Nowhere are volumes of such diverse commodities moved with greater efficiency or reliability and safety than in the U.S. These are privately owned companies, large and small, knitted together to provide excellent service to the farms, factories, ports, terminals, mines, well sites, and cities and communities across the country. Short Line and regional railroads significantly increase the efficiency, productivity and competitiveness of freight movement. They are the beginning and end of the journey for many in this economy. Fifty thousand miles of short line right-ofway and 550 short lines and regional railroads are in service every day reinforcing the economy, working with

The economics of service and competition were the principles that made expansion and profits possible. Class I railroads, and concentrating on service to customers 24 hours a day. This has all been made possible through a continuous commitment of short line railroads to improving and expanding facilities, upgrading

infrastructure, and incorporating technology that allows enhanced communications with customers and Class I partners. Nearly 28% of the bottom line revenues of small railroads are invested annually in infrastructure and equipment laying the foundation for safe and productive transport of over 7.5 million carloads. This origination number covers all commodity groups in 2013 to 49 states as well as Canada and Mexico. The majority of this investment has been made by short line and regional railroads and reinforced by the Short Line tax credit: a federal program to strengthen and expand the rail network. The “First Mile-Last Mile� of the any freight trip is demanding but it is where small railroads excel. Their flexibility, adaptability, and customer commitment are central to their record of successes. The clear evidence of this is the explosive growth of short lines in the past 30 years from 243 railroads to 550 today. The safety record is impressive and clearly has enhanced their high standing with more than 12,000 customers, as well as Class I railroads, through hundreds of thousands of interchanges each year. In the end, the strength of the short line railroad segment of the industry rests on its contributions toward expanding the reach of rail service, opening commercial opportunities, providing unequaled service to customers, and making highway travel safer and more efficient. RA

Keeping RailRoads healthy

A 21st century investment progrAm for pAssenger rAil


Joe Boardman, President and CEO, Amtrak

ntercity passenger rail has been growing for more than a decade with Amtrak setting ridership records in 10 of the past 11 years. Several states have started new or expanded and extended existing passenger rail services in recent years. Amtrak and various states are buying new equipment to support the increasing numbers of passengers that keep showing up at stations. In addition, Amtrak is constantly asked by everyone from rural communities to the nation’s biggest cities to deliver more and better service. Many towns without intercity rail service are seeking to be Amtrak-served communities. Can this growth continue? I believe it can because the demand is there, but it faces challenges that must be overcome. As a nation, we’re not really making the investments we need for growth and improvement—we’re just barely keeping the existing system going. Amtrak, like everyone else in the transportation business, is trying to keep pace. We have to make do, cramming more onto the existing and aging infrastructure, and missing real growth opportunities. In addition, communities are starving for tangible transportation improvements that can meaningfully impact their lives, particularly as airlines and intercity bus companies abandon small town America. State and local leaders see passenger rail as providing the connectivity, mobility, and economic development they want and need. In many key respects, transportation has gotten worse for many 36 Railway age March 2014

Americans—and more expensive. This isn’t an Amtrak problem. It’s a national problem, and it’s symptomatic of the declining emphasis we’ve put on national connectivity in recent decades. Look at the airline business. About half of airline flights on routes of less than 500 miles have been discontinued since 2005—and this is hitting small and mid-sized communities hard, and making it difficult for them to grow, or even to do business outside town limits. Under these circumstances, you might think that strengthening national connectivity between our communities and economic centers would be a national priority. But if you thought that, you would be wrong. It’s not. This year, Congress and the Administration will take up the reauthorization of federal funding for surface transportation. The focus of discussion is on the Highway Trust Fund (HTF), but it is financially unviable and built on an outmoded vision for mobility in the United States. We need to be thinking about how to replace it with a surface transportation program for the 21st century. The HTF is an important policy tool for states and mass transit systems. It provides what is considered essential for complex multi-year projects—longterm planning and funding, because it is not subject to the annual appropriations process. And while there is a congressional limitation on contract authority, it has not posed a problem for states wishing to advance projects once the formula distributes funding for them.

When it started, the HTF had a real vision—to build the 47,000-mile Interstate Highway System. That work was substantially completed in 1992, and today the program has expanded and it pays mostly for maintenance of 220,000 miles of highways, less than a quarter of which are Interstate highways. Local transit was made eligible for funding in 1982, but intercity public transportation is still not eligible. Bicycle and pedestrian projects, recreational trails, enhancement projects, and freight and passenger rail projects like CREATE were also funded

Communities are starving for tangible transportation improvements that can meaningfully impact their lives. by the HTF as the years went by. In 2008, the HTF could no longer sustain the demands on it and Congress began to transfer money from the general fund to HTF. Including 2014, that has amounted thus far to $53 billion dollars. The U.S. Department of Transportation says the HTF is set to run out of money again as early as August 2014. Said another way, the federal government has been regularly tapping the general fund since 2008 to bail out a 60-year-old program that has lost its sense of direction.

Keeping RailRoads healthy

We need a new, balanced federal surface transportation program that can provide investment in any of our surface modes—including highway, transit, and rail (both passenger and freight)—and would unshackle transportation planners, system users, and other decisions makers from simply chasing mode-restricted dollars and instead ask them to produce results that matter to the nation. I believe the United States needs a new focus as it restores a sense of direction for 21st century connectivity. Our vision must be to provide the connectivity that will enhance and extend our global competitive advantages. The vision for the Interstate system and the HTF in 1956 was national connectivity for commerce, for defense and for the common good. The vision is still good, but the focus has been lost. We need a federally funded Interstate Surface Transportation

Amtrak have a home in a redefined, well-targeted surface transportation program. In particular, the operation of long-distance trains is a core federal responsibility, as is capital funding for Northeast Corridor infrastructure to establish a state of good repair, expand capacity for the future, and reverse a rapidly increasing degradation of components, ride quality, and system reliability. Some may think redefining our approach to transportation investment may produce winners and losers, but that’s the wrong way to think about it. The right way is to think about transportation is as a tool for producing national outcomes. To forge it, we make some important choices—choices that go deeper than continuing to do something because it’s the way we’ve always done it. The nation is facing a real challenge, and the bankruptcy of the HTF is just the tip of the iceberg. This is not an insolvable problem—if we are willing Amtrak’s long-distance trains serve many communities where there is no other viable option.

program that is focused on all surface modes maximizing their ability to provide their unique contribution to the most efficient and productive nation on earth. A world-leading economy today requires a world-leading transportation system supported by a new, mode-neutral trust fund that strengthens the whole network. If national outcomes are our goal, I believe that federal investments in

to work together to solve it. It won’t be easy, but if we strive in good faith, we can find a way through to a solution that will give America what it needs. The people out there—customers, constituents, citizens, and taxpayers— want us to deliver good, relevant infrastructure solutions. As transportation leaders, we have a challenge to meet, and it’s one that we can no longer afford to dodge or neglect. rA March 2014 Railway age 37

Keeping RailRoads healthy

Rail tRansit: A GrOwth industry sOMEhOw GOEs LArGELy unnOtiCEd Across North America, rail transit’s growth—and success—is becoming increasingly impossible to ignore. and don’t think rail suppliers—established players and newcomers alike—haven’t noticed. Just a generation ago, U.s. “commuter rail” systems were limited mostly to the waterfront heavyweights and holdovers. light rail transit (lRt) or streetcars existed in the surviving “seven sisters,” and new lRt systems in edmonton, Calgary, san diego, and portland were launched under clouds of doubt. those days seem increasingly distant, as new rail starts sweep across the U.s. and Canada, oblivious to local political ideologies and shrugging off issues of “relative” urban size and density. Citizens don’t just want rail transit; they’re seeking it out, advocating for it. and political figures at the local, state, and federal levels are responding to that interest in rail, sometimes even leading it, as fiscal concerns, land use issues, and resource problems (energy, water, infrastructure decay) spur the need for adaptation. even just five years ago, new streetcar lines had a

toehold in three pacific northwest cities, complemented by heritage lines in san Francisco and new orleans. in 2013, south salt lake, Utah, joined the club. in 2014 alone, atlanta, tucson, ariz., and washington, d.C. will commence streetcar operations. portland, ore., a rail trendsetter, will add significant streetcar mileage. places such as Charlotte, n.C., Cincinnati, dallas, and Kansas City continue streetcar line construction. and a list of cities too long to list here are planning routes, identifying funding sources, and moving toward a rail transit future. Five years ago, no U.s.-based company was building streetcars. today, United streetcar, llC, and Brookville equipment Corp. are in fierce competition with several big competitors with U.s. operations for a share of the streetcar market. Meanwhile, lRt, once in the vanguard of rail transit submodes, continues growing in denver, phoenix, portland, seattle, and toronto, with new lines debuting this year alone in dallas (yet again), houston, and st. paul, Minn. interestingly, both of those rail submodes include

KANSAS CITY SOUTHERN is Proud to Participate in the

2014 Railroad Day on Capitol Hill 38 Railway age March 2014

Keeping RailRoads healthy access to major train stations in a number of cities, offering passenger intermodal opportunities now and in the future for connecting rail services to and from city centers, as well as to and from amtrak and Via Rail Canada connections. that suggests urban rail transit momentum may eventually “trickle up” to aid and bolster larger rail efforts, including regional (“commuter”) passenger rail, intercity rail, and even higher-speed rail (hrsR) and true high speed rail (hsR). “i would suggest that the U.s. will experience a ‘back to the future’ passenger rail renaissance,” says anthony perl, professor of Urban studies and political science at simon Fraser University in Vancouver, B.C. “Just like the late 19th century, when local communities first recognized the advantages of rail transport for short distances, and only later connected these systems up—first through interurbans and then through intercity passenger rail— the current renaissance of rail transit will be an important precondition for future success in intercity passenger rail.” such preconditions are not yet fully in place, as evidenced by the resistance (or at least lack of interest) some still hold for larger rail projects covering larger

geographic spans. “’what’s in it for me?’ is much easier to say when one’s talking high speed rail, even on [amtrak’s] northeast Corridor, compared with your neighborhood light rail stop,” one new Jersey rail advocate observes. California sports the most light rail systems (five) of any state in the U.s., all in cities to be served by the state’s 700-mile hsR network, but outright resistance to the project continues to slow progress, often generated by mid-sized, midpoint cities with no current stake in any kind of rail transit at all. the state’s “blended” approach marrying hsR and conventional rail development has mollified some communities and objections, but the payoff for many seems distant and remote. then again, three decades ago, “new” lRt lines in edmonton, Calgary, and san diego were dismissed by skeptics as a flash in the pan; the payback to those cities, and numerous others, today appears almost a given. indeed, the changes and progress “across the continent” shortchanges hawaii, in particular honolulu, now building its elevated rapid transit line to serve the state’s largest city—more proof of a figurative sea change for the better in rail transit’s fortunes. —douglas John Bowen

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Railway age • ConfeRenCe & expo

June 12-13, 2014 Key Bridge Marriott Arlington, VA

Moving CBR PRofitaBly and Safely Register at:

KeynoTe addresses

Richard F. Timmons President, American Short Line and Regional Railroad Association

Ed Hamberger President and CEO, Association of American Railroads

Key Topics

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• CBR Regulatory Outlook • Tank Car Availability Challenges • CBR Traffic Trends & Growth • Understanding the Tank Car Lease/Finance Market

• Federal Railroad Administration • NTSB • PHMSA • BNSF Railway

• Tank Car Builder’s Forum

• National Steel Car

• Oil Producer/Refiner Perspectives

• Railroad Financial Corporation

• Wall Street Views on CBR

• Railway Supply Institute

• AAR Tank Car Committee Report

• RSI Tank Car Committee

• CBR Insurance and Liability Considerations


• First-Responder Training for CBR Incidents

• Marsh • TTCI

sponsorship & exhibiT info EAST COAST Mark Connolly (212) 620-7260

CENTRAL, MIDWEST & WEST COAST Heather Disabato (312) 683-5026

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REgISTRATION & pROgRAM INFO: • (212) 620-7208

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GrippinG task Fastening system improvements are ensuring track integrity, as more is demanded of rail infrastructure. By MiSCHa waNeK-liBMaN, engineering editor


arket growth for fastening systems continues to see a push from heavier and more frequent loads and suppliers remain focused on research efforts to ensure their products have the proper clamp, vibration resistance, and fatigue life to serve the railroads well. AlcoA FAstening systems (AFS) provides the Huck brand of fasteners for the worldwide rail market. AFS’ product line includes the C50L, BobTail, and the new Huck 360. The Huck 360 is AFS’ newest product and has been performing well on a heavy haul Class I. According to Product Manager for the Americas Rocco DiRago, the challenge posed to the company was how to provide all the advantages of a traditional Huck product but have the ability to install that product with traditional rail tools. The answer is the Huck 360, which delivers five times the fatigue life of other fasteners, vibration resistance, and can be installed and removed using traditional rail tools. Amsted RPs kicked

off 2014 with the introduction of the Amsted RPS e-clip style, elastic fastener clip, manufactured in Atchison, Kan. for all types of track. “E-clips have been one of the most popular elastic rail fasteners in North America,” says Vice President Sales and Marketing. John Stout. “And now we have taken the challenge of providing our customers with a high quality and cost effective domestic e-clip alternative” The Amsted RPS e-clip is produced with an

innovative low-stress manufacturing process that significantly improves performance and enhances the working range of the clip, offering improved fatigue limits for long life and reduced maintenance costs, he says. Also new to the Amsted RPS product line is the premium long-reach clip, the SL 6030, which was tested to withstand 100% greater overdrive load capacity without impacting toe load or clip geometry. The SL 6030 retrofits into Safelokstyle shoulders and can be installed and removed with existing m/w equipment. Last year, Amsted RPS and Switzerland-based Schwihag AG entered into a joint venture to produce the “skl” style ME63 System. It includes the ME1 clip, rail pad, abrasion plate, field guide plate, gauge guide plate, screw spike, and dowel, all allowing the system to cover the entire width of the rail seat. In 2014, Amsted RPS will accommodate multiple rail base sizes and industrial applications. The ME1 clip is made with a special process to reduce stress on the clip during production resulting in high dynamic fatigue strength. The ME1 clip’s middle bend prevents rail rollover and protects the clip against over-stressing. “To meet this need, we have built on this insight and provide a wide range of resilient products including rail clips, ballast mat, Under Tie Pads, and bonded fastening systems,” says Wes Hodges, vice president of Amsted RPS. In 2012, Amsted RPS partnered with Netherlandsbased edilon) (sedra bv, known for its products designed to March 2014 Railway age 43

Rail FaSTeNeRS

minimize impacts and reduce noise and vibration. Amsted RPS says the partnership has been able to provide high performance products such as embedded block (EBS), embedded rail systems (ERS), and resilient Trackelast pads. Amsted RPS says new product development is expedited by combining Finite Elemental Analysis with experimental validation. Material models can be modified to hit design specific stiffness and deflections with the first prototype as with the Amsted RPS End Restraint for Special Trackwork (ERT) and the Loadmaster Timber Tie. Copper State Bolt and nut Co. recently introduced the Qwikline Chase nut as an ancillary item to its Heavy Duty Frog bolt. The company says the Chase nut helps to save a thread damaged frog or diamond bolt by reclaiming the threads quickly and safely while using the same installation equipment and without bolt removal. Copper State Bolt and Nut Co. continues to test processing and material combinations to achieve the longest lasting bolt in the industry regardless of weather conditions or application and recently partnered with a railroad to test a severe duty cold weather bolt, which the company says has had promising results in all tests to date.

According to l.B. FoSter Co. General Manager Transit Products Bill Treacy, 2013 proved to be a great year: “We experienced record results for our Transit Products business as we supplied direct fixation fasteners (DFF) for a number of key projects throughout North America. From a new product development perspective, we work with transit agencies to develop new and improved fastening technologies to help them achieve these goals. We continue to meet changing industry conditions, as well as develop engineeringbased, rather than simply product-based, solutions.” Says R&D Manager Rail Products Korhan Ciloglu, “We have seen the benefits of offering bundled solutions to our customers and are moving more so in the direction of packaging our products and services. As one example of an expansion of our capabilities beyond traditional product ranges, this past year we introduced an offering consisting of our new line of FOSTERBOND™ epoxy adhesives, an insert and installation methodology in a bundle for repairing our customer’s anchoring systems. This expands our presence with the transit agencies into the maintenance side of the business. But we also continue to address specific customer issues with new technology developments, not only with our fastening systems, but also with other transit products such as our recently patented anti-tracking bracket, hybrid tie extension insulator, and new formulations for our third rail tie extensions. We believe that these solutions will provide maintenance and operating benefits for our customers.” lewiS Bolt & nut Co. has been focusing on a new Sealtite hook bolt design for bridge decks that it says emphasizes simplicity, functionality and, most important, safety. 44

Railway age

March 2014

The Amsted RPS system consists of an ME1 clip, rail pad, abrasion and field guide plates, gauge guide plate, screw spike, and dowel.

The company says the patent-pending Sealtite Quick-Set™ Hook Bolt System allows installation in minutes from on the deck itself, instead of having to drill holes and lie on the creosoted deck or using a bucket over the side to attempt installation. Lewis Bolt says the system is designed so the installer can fully engage the flange by reaching down between the ties. A specially designed bracket is slid over the hook bolt and attached loosely with a flat washer and hex nut. While holding the bracket, the installer reaches down and attaches the hook bolt to the flange. The bracket then rests on ties on either side and is secured by tightening the nut. The bracket is further attached with 3/8-inch diameter nails or the Lewis Recessed Head (high strength) Timber Screws. Lewis Bolt has also incorporated a built-in tie spacer set at a four-inch width, but other tie spacing amounts can be accommodated. The company says the new system can resist lateral and vertical movement with the aforementioned features and the hook bolts angled inward 15 degrees. The company notes that dapping, as well as holes drilled for traditional Hook Bolts, are a potential for propagation of cracks, and ultimate premature failure of the costly bridge ties. With the Sealtite Quick-Set Hook Bolt System the company states that dapping needs are, at a minimum, reduced and holes are eliminated. pandrol uSa says demand for high performance elastic fastenings was strong in 2013. “One of the more significant events was the result of a collaborative effort by Pandrol USA, Arkansas Steel Associates, and Southwest Steel Processing,” says President Frank Brady. “In November 2013, two new robotic production lines designed to manufacture Pandrol VICTOR tie plates for wood ties were inaugurated.” The new production lines more than double the capacity to supply VICTOR tie plates. Each line produces a finished VICTOR plate every 17 seconds. Once the shoulders are swaged in place, they have a pull out strength more than double those specified for shoulders in concrete ties. Pandrol VICTOR plates are available in both 16-inch and 18-inch versions and enable the specification of both the type of shoulder and the hole punching type and pattern required.









L.B. FOSTER TRANSIT PRODUCTS CAN MEET YOUR TOUGHEST REQUIREMENTS L.B. Foster provides quality rail products that keep transit systems worldwide operating safely and efficiently. We offer custom solutions to meet our customer’s project-specific requirements and schedules. L.B. Foster has been servicing transit agencies and contractors with exceptional customer service and field-proven rail products for more than 35 years. DIRECT FIXATION FASTENERS







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Rail fasteneRs

The tie plates can be supplied with a shoulder suitable for either Pandrol “e” or FASTCLIP fasteners or with a ROLLBLOCK. They can have holes punched for cut spikes, screw spikes, or some combination of the two. The company says its VICTOR system combines the durability and ductility of an AREMA tie plate with the benefits of resilient fastenings with the flat tie plate providing the maximum bearing area, while the use of Pandrol’s fastenings provides holding power, prevention of rail rollover and reduced maintenance. Pandrol USA also notes that testing at TTCI with 39-ton axle loads has shown a five-fold decrease in gauge widening when using resilient fastenings on wood ties. Rail FoRge llC CEO Keith Ishaug says railroads derive


...Patented Improvement in Gauge Retention, Anywhere! Fits square holes and extends life of serviceable hairpin plates, or whereever extra holding power is required. • Driven with portable or automated spikers or with hand tools. • Fins lock the spike in place, prevent backout. Call or email for information.

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Railway age

March 2014

significant benefits from the company’s GageLok fasteners, including extended system life and reduced maintenance-ofway expenditures. According to Rail Forge, the premise behind GageLok fasteners is simple: to hold longer and stronger than traditional spikes. Ishaug says the company works with railroads and maintenance contractors to find new areas to solve problems and add value with its products. One of those areas has been in helping railroads meet sustainability goals. “At CN, GageLok screws have demonstrated significant improvement in maintenance intervals, contributing to reduced waste and fuel consumption. We have collaborated on numerous projects with Axion International, where the combination of ECOTRAX composite ties and GageLok screws gives users a solution that significantly outlasts other alternatives in high decay applications, such as tunnels. When you look at these situations and you also consider the improved m/w work conditions, reduced costs and so on, Rail Forge can help our customers make a sustainability contribution not just in the ‘green’ sense, but in the broader sense involving community, employees and shareholders as well,” said Ishaug.

Vossloh Fastening systems says

2014 will see the completion of its state-of-the-art manufacturing facility in Waco, Tex. The facility is should be in full production by this summer. “Our 300 series and DFF 300 UTS fastening systems for slab track, with significant noise/vibration attenuating and electrically isolating qualities are gaining interest in the North American market. These systems already have a proven history, for both higher speed and conventional commuter systems, in other global markets,” says Vice President and General Manager Ron Martin. “Recently, we introduced a redesigned screw/dowel combination that will lead to easier installations in areas where debris could be an issue. Our new Heavy Haul System, the W40, has some of the highest fatigue limits on the market, which in combination to some geometrical features will reduce rail deflection, tilting, and rail creep. With the redesigned rail pad, this system is providing a more stable rail seat, reducing the potential for rail seat abrasion.” RA

Understanding mobility

Vossloh has made additional provisions for protecting the rail seat against wear. The systems W 30 HH AP and W 40 HH AP come additionally with an abrasion plate in order to reduce rail seat abrasion. Endurance tests—according to AREMA Chapter 30—with changing temperatures and a sand-water mixture, have confirmed that the abrasion plate is an effective component for the avoidance of RSA.

The Vossloh Group is one of the leading companies in rail infrastructure and rail technology. The Vossloh North America Headquarters can bundle all Vossloh activities in the North American market. Vossloh Fastening Systems is part of the Vossloh Group and a world market leader in rail fastening solutions. As the inventor of the elastic tensiDuring the development of its fastening systems Vossloh cooperates on clamp, Vossloh has been producing cost-efficient and safe rail fasclosely with engineering consultants to ensure the optimum performance tening systems for 130 years. The lineup covers fastening systems for of its products through extensive computations as well as simulations ballasted and slab tracks, for heavy-haul, conventional or high-speed of realistic scenarios. track as well as for urban transport and Transit solutions. Rail fastening systems from Vossloh are installed in more than 65 countries. Vossloh has according to „AREMA Chapter 30 – Ties“ met the following Vossloh’s declared goal is to provide safe and economical solutions requirements: - Fastening Longitudinal Restraint Test that set industry standards worldwide. - Fastening Uplift Test - Fastening Repeated Load Test - Lateral Load Restraint Test The North American heavy-haul freight sector is characterized by - Tie Pad Test extremes in many ways, as the rails are exposed to axle loads of up to - Severe Service Load Test

Lovin‘ Extremes

39 t and extreme mechanical loads in tight curves and steep grades. In addition, temperatures can range between -76° F and +120° F. All these extremes place high demands on rail infrastructure—especially the fastening systems. Vossloh has coped with these challenges successfully and supplied these innovative heavy duty products in the United States since 2006 through the Vossloh Fastening Systems office in Chicago. These include the highly elastic rail fastening systems W14 HH, W 30 HH and W 40 HH. These systems were specifically developed for the North American market and are already standard on many lines with concrete ties on ballasted track in the US. All the W fastening systems meet special standards required on heavy haul lines subject to axle loads of up to 39 t and wide temperature fluctuations. With an optimized geometry, the fastening systems feature consistently high toe load holding forces, high dynamic fatigue strength and high creep resistance. The latest fastening system W 40 HH performs perfectly in the most extreme track conditions including high degree curves and high percentage grades with high annual MGT’s. The broad angular guide plates permit heavy loads to be absorbed through the whole ties shoulder, not just the shoulder pole. The Skl 40 tension clamp with specially shaped spring arm ends achieves a high toe load combined with ample fatigue strength of 3.2 mm (0.128”) vertically and +1.2 mm (0.48”) laterally. Additionally, the clamp’s design prevents the spring arms from sliding from the rail foot with more contact area.

W 40 HH AP (at „Breezy Point“)

W 40 HH AP

W-fasteners are in use on the lines of BNSF, Union Pacific, Florida East Coast (FEC) and Canadian National. Vossloh is solidifying its commitment to the North American market by opening a state of the art production facility for rail fastening systems in Waco, Texas: Start of production is scheduled for July, 2014. The clamps are to be manufactured in close cooperation with a plastic manufacturer as a one-stop-shop on-site. Thus, Vossloh is meeting the provisions of the “Buy American Act”. Safety first Various W-systems can be used on one and the same type of concrete ties as well as work with a variety of rail sizes without major changes to the systems. The fastening components of all systems can be manually or automatically pre-assembled in the tie plant. As described, the heavyhaul systems are based upon ballasted track with concrete ties. Its advantage: a long service life, low life cycle costs, better stability and good wheel tracking. As a very economical solution, Vossloh offers a fastening system for Yard and Industrial track for the low speeds typically encountered at depots or inside plant operations. Contact: Ron Martin, Vossloh North America Phone: +1 312 376 3202; E-mail:

W 30 HH AP

By DAviD ThomAs,

Crude oil tankers make up a large part of a Union Pacific manifest train, seen here at Clagstone, Idaho.

Contributing Editor

LearnIng to get aLong


n the aftermath of Lac-Mégantic, Que., the oil industry, railroads, regulators, and safety investigators bickered. Instead of collaborating, they first chose to blame each other for the succession of oil train explosions that has undermined social tolerance for shipping crude by rail. Now, given the scope of the challenge of improving crude-by-rail (CBR) safety, there are encouraging hopes for harmony. Oil shippers started the tiff by wailing agOil shippers started the tiff by wailing against the railroads. The strategy was abandoned when U.S. hazardous materials regulators ticketed three North Dakota transloaders in January for misrepresenting light, high-flammability


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March 2014

Bakken oil as old-school, heavy crude. The fines suggested that the oil shippers were misleading rail carriers about the nature of the cargo. CN and Canadian Pacific then imposed surcharges for moving pre2011-built tank cars. It was an inspired initiative that should accelerate rapid adoption of the newer and more robust CPC-1232-standard cars voluntarily implemented by the industry in 2011. Both CN and CP had publicly chastised rail regulators for rebuffing repeated warnings by accident investigators that the old general-purpose tank cars are not fit for hazmat service. In turn, government overseers accused both shippers and carriers of failing in their duties to

follow the rules—including some the regulators haven’t written yet. Topping that, the U.S. National Transportation Safety Board implied that FRA and the Pipeline and Hazardous Materials Safety Administration (PHMSA) rules are as leaky as a derailed older DOT-111. NTSB’s most unsettling assertion was that oil shippers, carriers, and regulators have collectively neglected homeland security requirements that they protect high-risk oil trains from terrorist attack. That charge, contained in the NTSB’s Jan. 23 safety recommendation to the FRA, was the first suggestion of a business benefit derived from the widespread down-classing of Bakken crude oil.

Bruce E. Kelly

As the oil industry, the railroads, regulators, and safety investigators confront the scope and scale of the challenge of improving CBR safety, there are encouraging signs of harmony.

CRude oil CollaboRation

Each new disaster spotlights the sluggish pace of industry reform and builds the case for political intervention. If CBR players cannot resolve their differences soon, responsibility for bringing CBR into line with safety and environmental law will default to a political solution, with unpredictable results. Since the first revelation that oil was being systematically mischaracterized for shipping, the wonder was: Why bother? Where was the advantage in false hazmat documentation when all varieties of crude may be legally transported in the same obsolete tank cars, at the same speeds, and over the same tracks? The first plausible explanation was offered by the NTSB, which said that, by inaccurately grading oil as lowrisk, shippers and carriers avoided their responsibilities to protect consignments from terrorist attack. Since 2008, shippers and carriers must collaborate in the design and deployment of security plans for the movement of high-risk oil. This comes not from hazmat or railway law, but from regulations under the Homeland Security Intelligence Reform and Terrorism Prevention Act of 2004. The prescribed “Transport Safety and Security Plans” are complex, costly, and philosophically at odds with CBR’s free-wheeling agility. Under the regulations, consists of light or extra-light crude must be protected against terrorist threat along carefully planned routes, from transloading terminals to refineries. The only exemption is the lowest-risk, heavy crude. Bakken oil by comparison is unusually volatile. The NTSB advised the FRA that it “remains concerned that the practice of mischaracterizing the packing group of crude oil shipments may allow shippers to avoid the security requirements necessary for transporting large quantities of volatile crude oil.” Because of the disruptive implications for railroad liability and day-to-day train operations, Railway Age asked the NTSB to specify whether it had explicit evidence of intentional misclassification to evade Homeland Security law. NTSB responded, “We are aware of

the misclassification situation in Lac-Mégantic.” Requests for further clarification went unanswered. Hazmat regulations hard-wire the categorization of all crude oil as “Class 3 Flammable Liquid.” Class 3 is divided into three Packing Groups according to flammability when exposed to fire, such as sparks from a derailment or intentional ignition. The higher-risk Packing Groups I and II require Homeland Security plans. Packing Group III does not. This tempting loophole was closed in late February when the FRA issued an emergency order eliminating Packing

If CBR players cannot resolve differences, unpredictable politicians will take charge of safety. Group III as an option for any type of crude oil. At the same time, FRA specified that testing must include “flash point; boiling point; corrosivity to steel and aluminum; presence and content of compounds such as sulfur/hydrogen sulfide; percentage presence of flammable gases; and, the vapor pressure at 50°C.” Further, the tests must be executed for each batch of oil loaded into tank cars. The requirements are immediate, and unavoidably disruptive to the smooth flow of oil. Criminal and civil cases piling up in the U.S. and Canada will determine whether the erroneous classifications were a collective misunderstanding, or a habitual falsification to speed the flow of oil without the apparent need for safety and security plans. The minimum requirements for security plans include background vetting of applicants for sensitive railroad jobs, protection of stationary trains, and strategies to defend trains on the move. “The provisions,” said NTSB, “[R]equire that each person who offers for

transportation in commerce or transports in commerce such hazardous materials must develop and adhere to a transportation security plan for the hazardous materials. The security plan must include an assessment of possible security risks for shipments and appropriate measures to address the assessed risks. The plan elements must include provisions for personnel security, prevention of unauthorized access to the hazardous materials, and provisions for en route security from origin to destination, including shipments stored incidental to transportation. Packing Group III materials are excluded from this requirement.” The investigators suggest that despite the by-then universal awareness that misclassification had occurred with the Lac-Mégantic consignment, the practice continues: “[T]he NTSB recommends that the FRA audit shippers and rail carriers of crude oil to ensure they are using appropriate hazardous materials shipping classifications, have developed transportation safety and security plans, and have made adequate provision for safety and security.” This call for the FRA to verify the classification of oil already in a carrier’s custody would expand the current audit of oilfield hazmat classification being conducted by PHMSA. The NTSB’s silence on just how the FRA should check oil already en route could further confound oil shippers and train operators struggling to understand just what regulators want them to do. Railroad and hazmat regulators did not escape NTSB blame. Indeed, the NTSB flagged one failing of FRA responsibility under the Clean Water Act: “Federal regulations require all railroads that transport liquid petroleum oil to develop basic written response plans that describe the manner of response to discharges that may occur during transportation, take into account the maximum potential discharge, identify the private personnel and equipment available to respond to a discharge, and retain that plan on file at its principal place of business and at the dispatcher’s office.” Pretty clear, March 2014 Railway age 49

CRude oil CollaboRation

except the regulations are pointless. They specifically exempt tank cars of less than 42,000-gallon capacity— which substantially exceeds the sizes of any old or new car available for crude oil service. “By limiting the comprehensive planning threshold for a single tank size that is greater than any currently in use, spill-planning regulations do not take into account the potential of a derailment of large numbers of 30,000-gallon tank cars, such as in Lac-Mégantic, where 60 tank cars together released about 1.6 million gallons of crude oil,” reported the investigators. The piling on of responsibility for homeland security and water protection, in addition to hazmat safety, complicates what has to be done to bring CBR into compliance with the nation’s laws. PHMSA’s recent suggestion of “degasification” before loading introduces a fresh set of uncertainties. The way crude arrives at various

transloading teminals may imply different testing requirements. Oil arriving directly through a regulated, longdistance pipeline has already been tested and treated to remove hydrogen sulfide and other toxic and corrosive gases that would damage pipes and pumps, or endanger workers. Such consistent and pre-tested oil could reasonably be inventoried in common holding tanks for subsequent transfer to tank cars. Oil trucked from a variety of sources and comingled in a holding tank would seem to require fresh classification before transfer to tank cars.Yet, there is no legal requirement to test crude before reclassifying it for transport, nor to maintain any record of the methods used to classify a particular batch. As the NTSB pointedly noted: “The regulations are silent on whether a shipper must test the product or whether the shipper may rely on manufacturer data or even the shipper’s own undocumented knowledge for determining the


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March 2014

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applicable shipping requirements.” Despite the absence of prescribed procedures for classification, PHMSA has been incrementally shifting the goal line. Its Jan. 2 missive decreed that shippers must “properly test, characterize, classify, and where appropriate, sufficiently degasify hazardous materials prior to and during transportation.” Asked by Railway Age to cite the legal authority for the expanding requirements, PHMSA pointed to its pre-emptive power to create new “interim final rules” without prior notice or consultation. The NTSB also recommended that the U.S. adopt Canada’s “Emergency Response Assistance Planning,” which engages shippers, carriers, and local first responders in the pre-deployment of emergency assets and trained personnel along rail lines carrying hazardous cargo (though not crude oil): “Because there is no mandate for railroads to develop comprehensive plans or ensure the availability of necessary response resources, carriers have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes.” Transport Canada earned praise by forming a triplet of multi-interest working groups that produced consensus recommendations for crude oil testing, pre-deployment of emergency response assets, and stronger, safer tank cars. It’s an approach worth trying in the U.S. Hopeful sounds have emerged, even from the usually aggresssive American Petroleum Institute. On Feb. 20, API President and CEO Jack Gerard said, “The oil and natural gas industry continues to work collaboratively with the Department of Transportation and America’s railroad industry to improve rail safety. We are working closely with the regulators and the railroad industry and looking in a holistic way at how to prevent accidents, mitigate impacts if they occur, and support emergency response.” Collaboration is probably the only way to keep politicians from taking control of CBR. RA


Meetings HigH Profile Veronique “Ronnie”

Hakim was named executive Director of New Jersey Transit Corp. on Feb. 18, 2014, effective March 2, succeeding James weinstein. Hakim most recently was executive director of the New Jersey Turnpike authority since September 2010. Before that, Hakim spent more than 20 years at the New york Hakim giulietti Metropolitan Transportation authority. NJ Transit Metro-North Joseph J. Giulietti last month assumed the role of Metro-North Railroad President, succeeding Howard Permut, who retired. giulietti joined Metro-North in 1983 with the creation of the regional passenger carrier, first as superintendent of transportation, and later becoming engineer of track for the Harlem and Hudson lines, assistant director of transportation and schedule coordination, and director of a project to reduce operational inefficiencies and increase productivity. Following that, giulietti joined the agency now known as the South Florida Regional Transportation authority (SFRTa) in 1998 as deputy executive director, and was named executive director two years later. “Having worked at Metro-North when it began operations 31 years ago, i’m honored to have the opportunity to lead a railroad that is such a vital part of life for the people it serves,” giulietti said. UNION PACIFIC—Lance Fritz has been elected President and Chief Operating Officer, reporting to CeO and President Jack Koraleski. Cameron Scott has been named executive Vice President Operations, succeeding Fritz. FORT WORTH TRANSPORTATION AUTHORITY — Paul J. Ballard has been named President and CeO. LAS VEGAS RAILWAY EXPRESS, INC. (X- TRAIN)—Penny White named President and CeO.

SUPPLIERS Aon Risk Services named Otis Tolbert a practice leader. Rick DeCoster named lead strategic account manager. Macquarie Rail, Inc. promoted Mark Brecht to President, succeeding David edwards, who retired last January. Vanasse Hangen Brustlin, Inc. named Lyle Overcash, PE, Managing Director of the company’s Raleigh, N.C. office. Overcash succeeds Bill Martin, PE, who becomes Mid-atlantic Transit & Rail Director.

Veolia Transportation said Richard J. Palmieri has joined the company as Vice President of Business Development for Rail, reporting to Ron Hartman, CeO of Veolia Transportation’s Rail Division.

100 YEARS AGO in

(MARCH 1914) STORM WOES IN NC, NJ, NY In a storm which prevailed in North Carolina, Feb. 25 and 26, more than a foot of snow fell, an almost unprecedented fall for that region; railroad traffic in many places was almost paralyzed. At one time, seven passenger trains of the Atlantic Coast Line were stalled at Fayetteville, N.C. In the same storm, trains of the Illinois Traction System and the Wabash were held in snowdrifts near Decatur, 36 hours. A storm of rain, snow, and wind which began in New Jersey and southeastern New York on [March 1], and continued about 24 hours, caused an almost complete suspension of traffic on a half dozen important railroads for a night and a day.

April 1-2 19th Annual AAR Research Review Cheyenne Mountain Resort, Colorado Springs, Colo. Tel.: 719-584-0544; email: annual, website: www.regonline. com/19thannual

April 8-10 New Jersey TransAction Conference 2014 Tropicana Hotel, Casino & Conference Center, atlantic City, N.J. email:; website:

April 22-25 ASLRRA 118th Annual Convention Hilton San Diego Bayfront, San Diego, Calif. Tel.: 202-585-3443; email:; website:

May 20-22 Railway Systems Suppliers Inc. Annual Exhibition gaylord Opryland Resort & Convention Center, Nashville, Tenn. Tel.: 502-327-7774; email:; website:

June 15-18 APTA Rail Conference Montreal, Quebec Tel: 800-999-2782; website:

September 14-16 American Association of Railroad Superintendents 118th Annual Meeting Union league Club Chicago, ill. Tel: 331-643-3369; email:; website:

March 2014 Railway age 51

RAWrkSiteTrn1_2pg2014AllClass_Layout 1 1/22/14 2:53 PM Page 1

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Railway age

March 2014

New five-foot LED task light from Larson Electronics

larson electronics has announced the release of an explosion Proof leD aluminum Drop light. Constructed to be completely impact and weather resistant, the FTl-5leD-ilC-50 leD drop light sacrifices no light output or quality to obtain these features. The FTl-5-leD-ilC-50 leD drop light can be used in any environment including general maintenance, construction, aircraft interior, emergency shelter, long narrow pathways, and shipyards. This leD task light also is shock resistant and is durable enough to withstand drops, falls, and rough handling. The FTl-5-leD-ilC-50 is equipped with an leDT8-28w-V1 T8 bulb that produces 2,750 lumens of light and requires no ballast to operate. The lightly frosted lens diffuses the light and makes this bulb ideal for food safe environments as there is no glass. The aluminum housing serves as a heat sink and provides rigidity and strength for this leD bulb. The handle and the end of this task light are finished with a polyoxymethylene plastic. The drop light can be run directly off any voltage ranging from 110 volts to 277 volts. it is equipped with 50 feet of cable. Contact larson electronics, Tel.: 800-369-6671 or 903-498-3363 for international inquiries; website: www.

Portable ROVER locomotive remote control from ZTR ROVeR™ locomotive Radio Remote Controls from ZTR Control Systems are designed to operate locomotives and other rail yard mobile equipment. each ergonomic, rugged radio remote control system is designed as a customized solution for the application and installs in less than an hour. ROVeR is FRa compliant and offers speed control and man down notification. The safety switch allows other people around the locomotive to disable the system and apply the emergency brakes. ROVeR is FRa compliant and meets the european safety regulations for locomotives (eN 50239). when combined with a new remote monitoring package, ROVeR can improve operations with equipment alerts, management reports, locomotive location, and more. learn more about ROVeR at the aSlRRa convention in San Diego, Booth #604, april 23-24, 2014. Or contact Sue Hansen, Tel.: 952-233-4389; email: e-mail: shansen@; website: .

Ad Index Company

Phone #


Email address

Page #

association Of american Railroad








Danella Rental Systems, inc.




ellwood Crankshaft & Machine




gage Bilt, inc.




greenbrier Companies The




Helm Financial Corp.

415-398-4510 ext 1610


13 37

Herzog Railroad Services, inc.



Holland Co.

708-672-2300 ext.382


indiana Railroad Company The



7 35

Kansas City Southern




Knoxville locomotive works



11 45

l.B. Foster Co



l&S luddent Und Scherf

00 49 364 815 64517

00 49 364 815 64519

lewis Bolt & Nut Company



8 46


+1 248 560 8484

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Norfolk Southern Corp.









Pandrol USa, inc.



Railquip inc







Railway age Crude By Rail





Railway educational Bureau, The



C3, 52





S & C Distribution, Co.




Soft Rail







STV, inc.







Vossloh group

00 49 239 252 273

00 49 239 252 274

5 3,47

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.

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SCANDINAVIA, THE NETHERLANDS, SPAIN, GERMANY, AuSTRIA, KOREA, HONG KONG, CHINA, AuSTRALIA, NEW ZEALAND, SOuTH AFRICA, RuSSIA, RECRuITMENT ADVERTISING Steve Barnes international area Sales Manager The Priory, Syresham gardens Haywards Heath, RH16 3lB United Kingdom +44-1444-416375 Fax: +44-(0)-1444-458185 ITALY, ITALIAN-SPEAKING SWITZERLAND Dr. Fabio Potesta Media Point & Communications SRl Corte lambruschini Corso Buenos aires 8 V Piano, genoa, italy 16129 +39-10-570-4948 Fax: +39-10-553-0088

JAPAN Katsuhiro ishii ace Media Service, inc. 12-6 4-Chome, Nishiiko, adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 CLASSIFIED, PROFESSIONAL & EMPLOYMENT Jeanine acquart 55 Broad St., 26th Floor New york, Ny 10004 (212) 620-7211 Fax: (212) 633-1325

March 2014 Railway age 53

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Railway age

March 2014

emploYment National Transportation Safety Board Senior Executive Vacancy Deputy Director, Office of Railroad, Pipeline and Hazardous Materials Investigations - For details, see:

Rail Account Representative L&S Electric repairs on board locomotive electrical rotating equipment including alternators, generators, traction motors and auxiliary equipment as well as rebuilds or repairs locomotive trucks. We are seeking a seasoned sales professional with a minimum of five years of experience selling to the rail industry. This position will be responsible for managing and development of rail sales to Class I’s, Regionals, Short Lines and rebuilders. Extensive travel in North America required. Primary territory will be the East Coast. Competitive benefit and salary package. Background and drug test required. Send resume to:

Harbor Rail Services Company is a leading provider of railcar and

locomotive repair services for the railroad industry in the United States. We are seeking a Regional Manager, Wester Region (California). The Regional Manager will report to the Director of Mechanical Operations. The Regional Manager is responsible for the oversight of all aspects of the successful operation of over 5 locations of a multi-state railcar and locomotive repair company. The Regional Manager leads a staff of approximately 200. • Are you a natural leader? Do you command respect? • Are you capable of managing multiple locations in different states? • Are you an expert in car repairs and billing? • Are you committed to safety? • Are you a person of high integrity? • Are you passionate about the railroad? • Are you committed to help the US Railroad Industry stay on track? If this is you, Harbor Rail needs you. Please send your resume to Alex Ruiz at Learn more about us by visiting our website: Base Salary $65,000 - $80,000 plus quarterly bonus. Bonus Potential is determined by the operational success of all repair locations managed. Estimated annual bonus of $15,000 to $40,000. You control your bonus through successful performance.

Locomotive Electrician - Locomotive Repair facility in Kansas City, Missouri, is looking for an experienced electrician with repairing and troubleshooting diesel locomotive high and low voltage wiring, must be able to read electrical schmatics, relocation expenses paid, supervisor position available. Call 816-483-5329.



Part 243 Training & Certification Part 242 Conductor Training Part 240 Engineer Training and re-certification -------------------------------------------------------Modoc Railroad Academy 916-965-5515

Trainers and Training Developers The Railway Educational Bureau is in the process of creating a training and development database to be used as a resource for the railroad industry. If you have experience training in an instructor-led environment and/or developing training materials for the rail industry, and are interested in becoming a part of our group, please send your resume to:

Brian Brundige The Railway Educational Bureau 1809 Capitol Avenue Omaha, NE 68102

proFeSSional directorY recruitment

Kansas City (913) 661-2424

We offer: - Certified Locomotive Engineers - Certified Conductors - Train Dispatchers - Yardmasters - Brakemen/Switchmen - Mechanical For Your Temporary Needs!

Find your rail industry job opportunities @ and


(713) 667-0406 FAX (713) 667-1651 Web address: Email:

6750 West Loop South Suite 735 Bellaire, Texas 77401-4111

railway age classified Section Jeanine acquart • 212-620-7211 s r



March 2014 Railway age 55

Financial edge DaViD NaHaSS

Freight car demand gets rolling


n the Railway Age 2014 Railroad Financial Desk Book, we discussed the overall weakness in the freight car market with a few notable exceptions such as tank cars and covered hoppers for sand and plastics. What a change five months has made in the overall market for cars under lease! As with the market for the operating leasing of six-axle locomotives (see RA, Feb. 2014, p. 48), general freight car demand has been on the rise almost industry wide. What has happened in the past six months to have fostered such a dramatic shift in the overall lease markets? First let’s take the easy targets. Tank cars and certain types of covered hopper cars (most notably small cube cars for sand [used in hydraulic fracturing] and cement) continue to see high demand. Even with some of the uncertainty surrounding the regulatory environment for tank cars, the ongoing robust nature of the backlog continues to drive demand for tank cars of all types and varieties. One lessor told me that it anticipates demand over the long-term for tank cars as this car type adjusts to potential regulatory changes in car design (most notably for the infamous 111A general purpose car hauling crude oil). Two-year backlogs for many tank car types is a new normal, at least for the near (and more likely long) term. Demand for small cube hoppers is a “where there’s is smoke there’s fire” kind of scenario. More tank car demand and more crude by rail means more demand for sand to be used in the fracking process and railcars in which to haul it. But what about some of the unloved car types that have been recent bystanders to the surging tank and hopper demand? There have been flickers and surges in demand there as well. Most notably, a surge in recent coal car


Railway age

March 2014

demand has this industry segment moving in the right direction. Case in point: In September 2013, over 170 sets of coal cars were parked. Six months later, that number is down by 25% and headed lower. Lease terms are increasing and rates are beginning to rise. In some cases, cars that were being leased on a utilization basis (a lease where the lessee only pays the lessor for the time they load the railcar) have moved to leases with fixed rates and terms.

Two-year backlogs for many tank car types is the new normal, at least for the near term. The plastics market continues surging as a number of new orders from both lessors and pellet car end users cement the belief that this is an attractive market segment. This will continue to grow as lower natural gas and feedstock (materials necessary for the production of plastics) costs make new production capacity a reality in North America. At the present moment we understand that current order solicitations and commitments for new builds exceed 3,000 cars. Increases in loadings for grain and grain products in 2013 have fostered demand in this market segment. However, it lacks the urgency being seen for tank and small cube hoppers. Other car types, such as cars for steel and for minerals, even showed small loading declines in 2013; demand has been muted in those car segments.

Yet, general demand has increased. Two primary factors drive demand for freight cars: railcar loadings and velocity. As one friend at a well-known railcar lessor told me, today’s increased demand is about commodity demand and its impact on train velocity. It’s a pretty basic cause and effect: More loads require more cars to move them. The trouble is that carload traffic has not been on the rise in any dramatic fashion. According to the AAR, railcar loadings in 2013 were up about 2% over 2012. The growth was primarily from intermodal, while all non-intermodal freight decreased slightly year over year, even with the robust growth in petroleum, grain, and non-metallic minerals. That trend has continued so far in 2014. What about velocity? As the same lessor said to me, there has been an increase in the cycle times for cars and that is causing an increase in demand for freight cars. Velocity is about so many factors on a railroad, personnel, available power for moving trains when needed, and weather. Severe weather across much of the U.S. with extraordinarily cold temperatures can also decrease the velocity of trains and require additional equipment to serve the demand for freight. What does a decrease in velocity indicate about long-term freight car demand? Unfortunately, not much. Although the dispensing of equipment once velocity levels have returned to normal may take longer than the acquisition of equipment when velocity has decreased, the change in cyclical demand can occur in a six month period. A cool summer and coal may drop off. A spike in natural gas prices and the plastics market may pull back. Best advice: Enjoy the surge while it lasts and be vigilant about buying (or leasing) on the hype.

Do you have the most up-to-date FRA Regulations?

Reb Says...

Use this handy index to verify that you have the most up-to-date version of the FRA regulations. The left-hand column lists the FRA Part number and the right-hand column list the latest revision date. Items highlighted in red denotes recent changes. (IFR = Interim Final Rule) FRA Part #

Last Update Effective:

FRA Part #

Last Update Effective:

40 . . . . . . . . .10-3-12 209 . . . . . . . .2-12-13 210 . . . . . . . .8-14-89 211 . . . . . . . .7-20-09 213 A-F . . . . .3-25-14 213 G . . . . . .7-11-13 214 . . . . . . . .6-25-12 215 . . . . . . . .6-25-12 216 . . . . . . . .6-25-12 217 . . . . . . . .6-25-12 218 . . . . . . . .6-25-12

219 220 221 222 223 224 225 228 229 230 231

. . . . . . . . .5-6-13 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . . .1-1-14 . . . . . . . .6-25-12 . . . . . . .12-19-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12

FRA Part #

232 233 234 235 236 237 238 239 240 242

Last Update Effective:

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .5-14-13 . . . . . . . .6-25-12 . . . . . . . .7-13-12 . . . . . . . .6-25-12 . . . . . . . .1-28-14 . . . . . . . .1-28-14 . . . . . . . .6-25-12 . . . . . . . .6-25-12

Mechanical Department Regulations

The following is a list of booklets reprinted from the Department of Transportation Code of Federal Regulations 49 CFR Parts 200 to 399 that apply to the rail industry. They are printed in a convenient format and are kept current with updates from the Federal Register which may be supplied in supplement form. Item FRA 50 or Code Part # more Each

209 211 BKTSSAF 213 BKTSSG 213 BKWRK 214 BKFSS 215 BKROR 217 218 BKRRC 220 BKEND 221 BKSEP

Railroad Safety Enforcement Procedures & Rules of Practice Track Safety Standards (Subpart A-F) (Soon) Track Safety Standards (Subpart G) Railroad Workplace Safety Railroad Freight Car Safety Standards Railroad Operating Rules and Practices Railroad Communications Rear End Marking Device, Passenger, Commuter & Freight Trains BKHORN 222 Use of Locomotive Horns BKRFRS 224 Reflectorization of Rail Freight Rolling Stock BKHS 228 Hours of Service BKLSS 229 Locomotive Safety Standards BKSLI 230 Steam Locomotive Inspection BKSAS 231 Railroad Safety Appliance Standards BKBRIDGE 237 Bridge Safety Standards BKLER 240 Qualification and Certification of Locomotive BKCONDC 242 Conductor Certification BKBSS


Brake System Safety Standards


9.95 8.55 9.50 7.25 9.50

8.95 7.85 8.55 6.55 8.55

5.50 5.00

4.95 4.50



6.25 10.50 11.00 22.95 9.35 6.25 12.75


8.50 5.60 11.50








Passenger Safety Standards 22.80 Part 238, 239 - Order 25 or more and pay only $20.50 each


Signal and Train Control Systems Includes Part 233, 234, 235, 236 Order 25 or more and pay only $17.55 each



Drug and Alcohol Regulations in the Workplace Part 40 & 219



Track and Rail and Infrastructure Integrity Compliance Manual - Volume II, Track Safety Standards Order 25 or more and pay only $30.00 each


Ph: (402)346-4300 • Fax: (402)346-1783 Email:




Mech. Dept. Regs. Order 25 or more and pay only $24.50 each

Part 240–Qualification and Certification of Locomotive Engineers

This book affects locomotive engineers, trainers and supervisors. The rule is largely based on recommendations made by an advisory committee comprised of rail industry and labor representatives. This final rule will clarify the decertification process; clarify when certified locomotive engineers are required to operate service vehicles; and address the concern that some designated supervisors of locomotive engineers are insufficiently qualified to properly supervise, train, or test locomotive engineers. 162 pages. Spiral bound.



Technical Manual for Signal and Train Control Rules. Includes Part 233, 234, 235, 236 - Spiral Bound Order 25 or more and pay only $39.10 each

1809 Capitol Ave, Omaha, NE 68102

A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound. Part Title 210 Railroad Noise Emission Compliance Regulations 215 Freight Car Safety Standards 216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment 217 Railroad Operating Rules 218 Railroad Operating Practices - Blue Flag Rule 221 Rear End Marking Device-passenger, commuter/freight trains 223 Safety Glazing Standards 225 Railroad Accidents/Incidents Eff: 1-1-14 229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

Qual. and Certif. of Loco. Engineers Order 50 or more and pay only $11.50 each

25 or more


The Railway Educational Bureau

Part 213 - Track Safety Standards: FRA is amending the Federal Track Safety Standards to promote the safety of railroad operations by enhancing rail flaw detection processes. In particular, FRA is establishing minimum qualification requirements for rail flaw detection equipment operators, as well as revising requirements for effective rail inspection frequencies, rail flaw remedial actions, and rail inspection records. In addition, FRA is removing regulatory requirements concerning joint bar fracture reporting. This final rule is intended to implement section 403 of the Rail Safety Improvement Act of 2008 (RSIA). This final rule is effective March 25, 2014.


Part 242: Conductor Certification

The Conductor Certification rule (49 CFR 242) outlines details for implementing a Conductor Certification Program. The FRA implemented this rule in an effort to ensure that only those persons who meet minimum Federal safety standards serve as conductors, to reduce the rate and number of accidents and incidents, and to improve railroad safety. Softcover. Spiral bound. 124 pages.


Order Now!

Conductor Certification Order 50 or more and pay only $9.90 each


800-228-9670 8 a.m. to 5 p.m. C.S.T., Monday/Friday

Add Shipping & Handling if your merchandise subtotal is: U.S.A. CAN U.S.A. CAN UP TO $10.00 $4.10 $8.55 25.01 - 50.00 9.80 15.70 10.01 - 25.00 7.20 11.80 50.01 - 75.00 10.90 19.80 *Prices subject to change. Revision dates subject to change in with laws published by the FRA. 3/14

Orders over $75, call for shipping accordance

Norfolk Southern invests millions to maintain MOVING THE and improve its freight rail infrastructure. That’s good for shippers, and it boosts the nation’s ECONOMY FORWARD. competitiveness in the global economy. A solid rail infrastructure supports efficiency and reliability, FULL SPEED AHEAD. which are crucial to international commerce. We’ll keep doing our part to make sure our trains and the American economy move forward. Learn more at © 2014 Norfolk Southern Corp., Three Commercial Place, Norfolk, Va. 23510,, 855-NOR-FOLK

March 2014 Railway Age Magazine  
March 2014 Railway Age Magazine