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ailway ge R A

October 2012 | www.railwayage.com

Serving the railway industry since 1856

InnoTrans 2012

norTh amerIcan supplIers Go Global

IllInoIs seTs The mIdwesT hIGh speed pace The scIence behInd frIcTIon manaGemenT raIlroad fInancIal desk book 2013


RailwayAge

OctOber 2012

visit us at www.railwayage.com Features innoTrans 2012

20

Friction management

28

illinois sets the Midwest pace

35

News/Columns From the editor

4

Update

10

Short line/Regional Perspective

17

Perspective

48

28

Departments industry indicators

1

industry Outlook

6

Market

8

People

40

100 years ago

40

Meetings

40

Products

42

advertising index

45

Professional Directory

46

Classified

47 supplement On the COver U.S. rail suppliers made a strong impact at innoTrans 2012 in Berlin.

35

Photo by william C. Vantuono Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 345 Hudson St., 12th Fl., New York, NY 10014. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 213, No. 10. 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. COPYRIGHTŠ 2012 Simmons-Boardman Publishing Corporation 2012. 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 10, Omaha, NE 68101-0010 or call toll free (800) 895-4389. In Nebraska call (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 00338826

October 2012 Railway age 1


RailwayAge

From the Editor william C. VantuOnO

Die Eisenbahnen der Welt nach Berlin kamen

Editorial and ExEcutivE officEs Simmons-Boardman Publishing Corp. 345 Hudson Street, 12th Fl. New York, NY 10014 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com DOUGLAS JOHN BOWEN, Managing Editor dbowen@sbpub.com LUTHER S. MILLER, Senior Consulting Editor lmiller@sbpub.com ROBERT P. DeMARCO, Publisher Emeritus bdemarco@sbpub.com CONTRIBUTING EDITORS: Alex Binkley, Roy H. Blanchard, Lawrence H Kaufman, Bruce E. Kelly, Anthony D. Kruglinski, Ron Lindsey, Ryan McWiliams, Jason H. Seidl

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O

k, I don’t speak German (even though I took three years of it in high school—but that was in the mid-1970s). The Apple operating system has a nifty translator that allows me to “cheat.” Es kommt in handliches manchmal! There were many more languages than German spoken at InnoTrans 2012, the massive global railway trade expo that takes place every two years in Berlin. Indeed, the world’s railways and suppliers all seemed to gather in the beautiful and historic city that was once the focal point of the Cold War between East and West. There were no walls at InnoTrans, as Russian, American, German, French, Italian, Chinese, Indian, Japanese, Korean, Canadian, Spanish, Swiss, Norwegian, etc., etc. professionals from all areas of our industry shared their technologies and ideas. The sheer numbers were erstaunliche: more than 2,500 exhibitors from 49 countries; more than 126,000 delegates from 140 countries—all records. The North American presence at InnoTrans was bedeutend (significant). Thanks in large part to the efforts of AREMA Executive Director Chuck Emely, and REMSA Executive Director David Soule (pictured above with me at 2

Railway age

October 2012

the USA Pavilion), 51 companies participated, the most ever in this exhibition’s 18-year history. Too bad it’s prohibitively expensive and time-consuming to ship North American freight locomotives and freight cars and track machines to Berlin for the outdoor equipment display. Now that would have been really impressive! See p. 20 for our report on the North American presence at InnoTrans 2012. New Contributing Editor: We welcome Ryan McWilliams to our stable of Contributing Editors who are also industry professionals. Ryan, most recently with Salient Systems and TTCI, will be sharing his expertise on all things having to do with the wheel/rail interface with Railway Age and Railway Track & Structures readers. He is principal of International Engineering, a consulting firm, and founder of RailAdvisor.com, an informational website he describes as “Solution-Based Railway Knowledge for Rail Professionals, by Rail Professionals.”

WEstErn officEs 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Jennifer Nunez jnunez@sbpub.com GEORGE SOKULSKI, Associate Publisher Emeritus gsokulski@sbpub.com 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 curt.ciesinski@parsintl.com 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, P.O. Box 10, Omaha, NE 68101-0010, 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 Simmons-Boardman 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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Industry Indicators TRAFFIC ORIGINATED carLoaDS

WEEK 36 enDIng SePTemBer 8, 2012

MAJOR U.S. RAILROADS

By COMMODITy grain farm Products ex.grain metallic ores coal crushed Stone / Sand / gravel nonmetallic minerals grain mill Products food & Kindred Products Primary forest Products Lumber & Wood Products Pulp, Paper & other chemicals Petroleum Products Stone, clay & glass coke metals & Products motor Vehicles & equipment Iron & Steel Scrap Waste & nonferrous Scrap all other carloads TOTAL CAR LOADED

CANADIAN RAILROADS ALL COMMODITy

MEXICAN RAILROADS ALL COMMODITy

2012 15,297 1,104 7,196 119,077 18,936 5,458 8,853 6,149 1,325 2,630 5,838 27,480 11,394 7,333 3,621 9,320 12,256 2,938 2,548 3,548 272,301

2011 17,288 684 8,637 130,926 16,435 4,779 8,222 5,520 1,482 2,328 5,974 27,177 6,939 7,420 3,344 8,855 12,256 3,758 3,002 3,704 278,647

76,490

75,015

2.0%

14,471

13,763

5.1%

36 WEEKS 10,162,532 2,760,023 514,448 13,437,003

U.S TOTAL CANADIAN TOTAL MEXICAN TOTAL NORTH AMERICAN TOTAL

% CHANGE -11.5% 61.4% -16.7% -9.1% 15.2% 14.2% 7.7% 11.4% -10.6% 13.0% -2.3% 1.1% 64.2% -1.2% 8.3% 5.3% 0.7% -21.8% -15.1% -4.2% -2.3%

% CHANGE FROM 2011 -2.4% 2.8% -0.3% -1.3%

WEEK 36 enDIng SePTemBer 8, 2012

InTermoDaL U.S. RAILROADS TraILerS conTaInerS TOTAL UNIT

CANADIAN RAILROADS TraILerS conTaInerS TOTAL UNIT

MEXICAN RAILROADS TraILerS conTaInerS TOTAL UNIT

25,870 188,647 214,517

28,324 179,736 208,061

-8.7% 5.0% 3.1%

1,394 48,293 49,687

1,728 44,933 46,328

-20.5% 7.5% 7.3%

11 10,542 10,553

0 9,977 9,977

— 5.7% 5.8%

36 WEEKS 8,441,310 1,838,589 349,454 10,629,353

U.S TOTAL CANADIAN TOTAL MEXICAN TOTAL NORTH AMERICAN TOTAL

% CHANGE FROM 2011 3.7% 6.9% 18.1% 4.7%

ESTIMATED TON-MILES (BILLIONS), U.S. CLASS I RAILROADS 2012 31.8 1,164.3

WeeK 36 TOTAL WEEK 1-36

2011 32.3 1,182.4

% CHANGE -1.5% -1.5%

Source: Weekly railroad Traffic, association of american railrods

RAIL FREIGHT TRAFFIC TRENDS, U.S. CLASS I RAILROADS estimated billion ton-miles

38 34 32 30

2012

28 26

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12 16 20 24 28 32 36 40 44 48 52

October 2012

carLoaDS

ORIGINATED AUG. ’12 44,512 24,813 26,801 13,138 21,539 7,609 10,024 4,428 22,212 11,434 1,429 2,237 19,467 13,429 46,372 11,198 97,308

By COMMODITy chemicals coal crushed Stone / Sand / gravel food & Kindred Products grain grain mill Products Lumber & Wood Products metals ores metals & Products motor Vehicles & equipmet nonmetallic minerals Petroleum Products Pulp, Paper & allied Products Stone, clay & glass Products Trailers / containers Waste & nonferrous Scrap all other carloads

ORIGINATED AUG. ’11 42,699 19,296 23,605 12,934 20,315 7,348 8,658 5,951 24,244 9,429 2,394 2,141 20,040 13,646 40,148 11,866 95,923

% CHANGE 4.2% 28.6% 13.5% 1.6% 6.0% 3.6% 15.8% -25.6% -8.4% 21.3% -40.3% 4.5% -2.9% -1.6% 15.5% -5.6% 1.4%

TOTAL CARLOADS, AUGUST 2012 vS. 2011 AUGUST 2012 - 377,950 AUGUST 2011 - 360,637 290,000 300,000 310,000 320,000 330,000

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

copyright © 2012. all rights reserved.

RAILROAD EMpLOyMENT, CLASS I LINEHAUL CARRIERS, AUGUST 2012 (% change from aUgUST 2011)

Transportation (train and engine) 65,129; +1.22%

executives, officials, and Staff assistants 8,756; -6.50%

Professional and administrative 13,716; -1.23%

TOTAL EMpLOyEES: 161,134 % CHANGE FROM AUGUST 2011: +0.64% Transportation (other than train & engine) 6,575; -1.87%

maintenance of equipment and Stores 29,606; +1.31%

maintenanceof-Way and Structures 37,352; +2.08%

Source: Surface Transportation Board

2011

36

SHORT LINE AND REGIONAL TRAFFIC INDEX

Week-ended number

EMpLOyMENT Up yEAR-OvER-yEAR, DOWN FROM pAST MONTH figures released by the Surface Transportation Board show class I railroads employed 161,134 people in mid-august, up 0.64% from august 2011, but down 0.54% from July 2012. half of the six categories measured fell compared with august 2011, led by executives, officials and Staff assistants, down 6.5%. only maintenance-of-Way and Structures, up 0.64%; and Transportation (train and engine), up 0.45%, rose from July 2012 as total employment dipped 0.54%.


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Industry Outlook CN plans major fleet expansion

CSX scores on carbon disclosure index

CSX Corp. last month announced that for the third year in a row the company earned a place on the Carbon Disclosure Project (CDP) S&P 500 Carbon Disclosure leadership index (CDli), and for the first time is recognized on the CDP global 500 Carbon Disclosure leadership index. “environmental stewardship and transparency continue to be top priorities for CSX,” said CSX Chairman, President, and CeO Michael J. ward, “This honor is evidence of CSX’s continued recognition that environmentally responsible operations are good for our customers, for our communities, and for our shareholders.” CSX noted that it is only railroad listed on either disclosure index and its score of 95 was the fourth-highest on the 53-company S&P 500 CDli and second-highest for S&P industrial companies. The score also placed the company fourth among all global industrial companies. “Companies that make the Carbon Disclosure leadership index have demonstrated strong internal data management practices for the measurement of greenhouse gas emissions and energy use,” said Paul Simpson, chief executive officer of CDP. “They are also giving clear consideration to the business issues related to climate change and their exposure to climate-related risks and opportunities. This is vital to realizing greater efficiencies, protecting the business from risk and capitalizing on opportunities.”

Illinois highway unit gets rail option

Massachusetts eyes rail route

illinois gov. Pat Quinn’s signature to state House Bill HB4078 authorizes the illinois Toll Highway authority to use all of its existing powers to construct railroad lines. Such crossmodal authority is generally, and often explicitly, banned in many states within the U.S. “Now, illinois has another entity that can assemble right-of-way, design the civil works, issue bonds, and manage the construction of high-speed tracks,” the Midwest High Speed Rail association said, lauding the action. illinois Department of Transportation already is using its existing authority to improve the Chicago-St louis route for 110-mph speeds (p. 35).

Massachusetts plans to acquire Pan am Railways right-of-way between Springfield, Mass., and the Vermont border, in order to facilitate passenger rail development on the “Knowledge Corridor.” The price is pegged at about $17 million. The stretch runs immediately north of right-of-way owned by amtrak between New Haven, Conn., and Springfield, offering a more direct route to cities in Vermont for amtrak service, and the potential to re-establish passenger service for Massachusetts cities en route to St. albans, Vt., near the Canadian border. Pan am Railways has been upgrading the right-of-way.

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CN last month said it plans to begin acquiring more than 2,200 new freight cars and 1,300 containers by the end of this year “to support traffic growth and improve customer service.” Said Jean-Jacques Ruest, executive vice president and chief marketing officer, “CN is acquiring new freight cars and containers for a range of markets, including forest products, metals, minerals, coal, iron ore, steel, consumer goods, finished vehicles, and grain. These fleet additions will help us grow in line with our customers’ demands and ensure CN has the right mix of modern, productive assets.” CN’s largest rolling stock addition in 2012 is the acquisition of 600 premium 60-foot, double-door boxcars for forest products and metals traffic. These higher payload cars help improve customer loading efficiency. CN’s other main 2012 fleet additions include: 1,300 containers for grocery and consumer goods; 558 high-capacity modern covered hoppers for grain exports; 317 multilevel cars for finished-vehicle deliveries to major cities; 300 gondolas for coal exports; 232 ore cars for pelletized iron ore produced in Minnesota to supply steel mills in the U.S.; and 200 multipurpose boxcars for the North american freight car pool. Said Ruest, “CN’s rolling stock acquisition strategy is responding to evolving market conditions and is intended to ensure reliable, predictable supply chains for our customers.”


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Market

All Aboard Florida taps AMEC for environmental work

all aboard Florida, an intrastate intercity passenger rail effort advanced by Florida east Coast industries, inc. to connect Miami, Fort lauderdale, and Orlando, has selected aMeC environment & infrastructure, inc., as the environmental engineering firm overseeing design planning and environmental compliance and permitting efforts for the initial 240-mile passenger railway infrastructure. “aMeC’s global track record of exemplary engineering feats in the transportation sector makes them a worthy partner in this project,” said aaF executive Vice President Michael Reininger. “The firm will deliver on our philosophy to bring intercity passenger rail service to Florida without sacrificing or adversely impacting the critical environments and natural habitats that define our state’s landscape.” FeC last March said the project would cost at least $1 billion, with service expected to commence in 2014.

North America AMTRAK: Selected Falls Church, Va.-based eNSCO, inc.’s TrackiT® Track Chart Management System, which hosts amtrak’s official track charts and provides them as high-quality PDF digital copies or hard copies. DART: awarded a $9.4 million contract to Brookville, Pa.-based Brookville equipment Corp. to provide two modern streetcars for the proposed Oak Cliff streetcar project in Dallas’ namesake neighborhood, linking it to Dallas Union Station (details, p. 16). MASSACHUSETTS DOT: awarded a $44.8 million contract to a joint venture charged with designing a green line light rail transit extension to Medford, 8

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October 2012

Worldwide Mass., with a spur to Somerville, Mass. The joint venture includes los angelesbased aeCOM, which was awarded a contract last month by Denver’s Regional Transit District, and HNTB Corp. of Kansas City, Mo. WASHINGTON, D.C., DDOT: Ordered a third streetcar from United Streetcar, llC, a subsidiary of Clackamas, Ore.-based Oregon iron works, at a cost of $2.9 million. DDOT also said its Request For information (RFi) involving streetcar system development received 20 responses, “far exceeding our expectations.” DDOT noted responses came from rail transit vehicle builders based in the U.S., Britain, Spain, China, and Japan, among them United Streetcar.

CHINA MINISTRY OF RAILWAYS (MOR): announced an adjustment with Bombardier Transportation’s Chinese joint venture, Bombardier Sifang (Qingdao) Transportation ltd., changing “its original order of 80 very high speed trains from 2009 to include 70 eightcar Bombardier ZeFiRO 380 trains, 46 ZeFiRO 250 stainless steel trains, and 60 ZeFiRO 250Ng trains,” giving MOR increased flexibility in delivering its passenger services. JERNBANEVERKET (JBV), NORWAY: awarded Thales a $41.5 million, 10-year contract to deliver a new interlocking system, including three signaling projects, involving the Sandnes-Stavanger line, the ganddal cargo terminal, and Høvik station.


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Speed, Performance, Reliability


Update Supply BriefS

“The last great rail turnaround”

Bombardier Transportation has signed contracts with Madridbased Patentes Talgo Sa to develop and supply components for 36 very high speed trains for Saudi arabia. The contracts are valued at approximately $367 million. Talgo is a member of the al Shoula consortium, led by the Spanish railway operator ReNFe and the railway infrastructure company aDiF, recently contracted by the Saudi Railways Organization to build and operate a 280-mile HSR line connecting Mecca and Medina. Bombardier said its “supply scope” for Talgo includes its MiTRaC 3000 propulsion and control package, FleXX Power 350 high speed bogies for the power heads of the 205-mph trains, and 12-year maintenance services for the Bombardier-built systems and components.The majority of Bombardier’s manufacturing for the project will take place at the company’s plant in Trápaga, Spain.

Trinity industries buys manufacturing sites Dallas-based Trinity industries, inc. will purchase 665,000 square feet of heavy manufacturing capacity from DMi industries, a subsidiary of Fargo, N.D.-based Otter Tail Corp., for $20 million. The facilities are located in west Fargo, N.D., Tulsa, Okla., and Fort erie, Ontario. The deal for the Fort erie facility closed last month, while Otter Tail said the west Fargo deal will close in November and Tulsa portion in December. Steve Barger, analyst at KeyBanc Capital Markets inc., said the timing is occurring in sequence “after DMi completes its remaining wind tower orders.”

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all Street analyst William Greene of Morgan Stanley Research North America is telling investors in the rail sector that Canadian Pacific Railway, under the direction of recently appointed chief executive E. Hunter Harrison, “could be the most compelling railroad investment opportunity for the next three years.” “We are resuming coverage of CP at Overweight and adding it to Morgan Stanley’s Best Ideas list,” says Greene. “CP is one of the cheapest rails on 2014 and 2015 growth. While CP looks expensive on current sell-side consensus, we believe consensus significantly underestimates the pace at which CP can improve margins and earnings. The stock is cheap on a price/earnings to growth ratio basis.” Greene notes that Harrison’s track record of operating ratio improvement at Illinois Central and CN “led to impressive stock performance. In the case of CP, we believe the stock has further to go, as we are 18% ahead of consensus for Fiscal Year 2013 . . . and we see upside to U.S.$128 by year-end 2013. We forecast CP to realize a 72% OR in 2013, with a clear path toward a mid-60s OR by 2015.”

Greene says that Morgan Stanley “does not subscribe to the view that CP is uniquely challenged such that a mid-60s OR is improbable, a point we expect management to address at CP’s Dec. 5th Investor Day. Our work shows that closing the productivity gap with CN is likely to be a major driver to OR in Harrison’s first two years on the property.” Morgan Stanley’s Investment Thesis on CP: “As indicated when activism began, the turnaround at CP has the potential to be the most significant investment opportunity in railroads for the next three years. The arrival of Hunter Harrison should catalyze change on a network that is certainly not broken and arguably has strong potential. While we acknowledge that key man risk and weakening macros are concerns, we see significant opportunity for OR improvement at CP with non-economic drivers to growth and productivity.” Morgan Stanley says its Best Ideas are “leading stock investment insights, the best combination of highly differentiated research, favorable risk-reward profiles, and clear catalysts.”

William C. Vantuono

Bombardier to supply Saudi HSr components


Amtrak steps up NEC higher-speed initiatives In service since late 2000, Amtrak’s Acela Express high speed trainsets have operated at a maximum speed of 135 mph on the New York-Washington segment of the Northeast Corridor, and at 150 mph on two short segments in Rhode Island and Massachusetts on the New York-Boston route. For a two-week period beginning Sept. 24, Amtrak operated test trains at 165 mph in four areas that collectively cover more than 100 miles of the NEC. Amtrak said the tests in Maryland, Delaware, New Jersey, Rhode Island, and Massachusetts were “at locations that may at some future time experience regular 160-mph service.” The tests utilized high-speed Acela Express equipment and measured vehicle/track interaction and other safety factors, and ride quality. The test runs were performed at 5 mph above the expected maximum operating speed of 160 mph, under FRA regulations. The test areas between Perryville, Md. and Wilmington, Del. (21.3 miles) and Trenton and New Brunswick, N.J. (22.9 miles) currently have a maximum speed limit of 135 mph. The test areas between Westerly and Cranston, R.I. (29.2 miles) and South Attleboro and Readville, Mass. (27.8 miles) currently have a maximum speed limit of 150 mph. These areas were used for similar high-speed tests before the introduction of Acela Express service. The initial test run was in New Jersey on the TrentonNew Brunswick “Raceway,” where Amtrak is presently advancing design, engineering, and other pre-construction activities for a $450 million project funded by the federal high-speed rail program. The project includes upgrading track, electrical power, signal systems, and overhead catenary wires to improve reliability for Amtrak and commuter rail service, and to permit train operations at faster speeds. Amtrak says some construction activity is anticipated in 2013, but the project “will ramp up dramatically thereafter to be completed in 2017.”

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October 2012 Railway age 11


Update Rail’s oil prospects excite Wall Street “Railroads are booming, and it’s not because of the rising cost of gas or a consumer return to an older form of transportation. It’s oil,” reports the wellknown and highly respected stock market news and financial analysis website Seeking Alpha. “Railroad stocks are ready to leap on booming oil transportation.” The boom started in January, when President Obama denied approval for pipeline operator TransCanada’s proposed $7 billion Keystone XL pipeline, which would carry oil from Canada’s oil sands to U.S. Gulf Coast refineries. “This denial started a train in motion—literally—as oil and petroleum exploration and development companies looked to the railroads to transport raw materials to refineries and refineries looked for efficient methods of distribution,” says Seeking Alpha. “Without pipelines (according to Energy & Capital, there are currently no pipelines running internationally between the U.S. and Canada), trains are the best way to move the oil south to the big refineries along the Gulf coasts.” The U.S. Energy Information Administration (EIA) says rail deliveries of oil and petroleum rose almost 40% in this year’s first half. BNSF, the biggest railway mover of crude in the U.S., posted an increase of 60% in carloads of crude oil and petroleum products during that period. BNSF expects its oil business to grow. According to Reuters, the railroad recently “expanded its capacity to transport 1 million barrels-per-day of shale oil from the Bakken formation in North Dakota and Montana in 2012, a 25% increase from a year earlier. BNSF expects to use a quarter of this capacity in 2012. Still, with 88.9 million barrels of Bakken crude shipped on its railcars in 2012, it will witness a nearly 7,000% growth since it started shipping by rail five years ago.” For investors, this is a train they’d be wise to take. According to The Wall Street Journal, Statoil ASA is leasing more than 1,000 railcars to carry crude 12

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October 2012

oil from fields in North Dakota to refiners across North America, “in a bid to overcome pipeline bottlenecks that plague the booming oil-producing region.” Phillips 66, a refiner, acquired 2,000 railcars to ship crude to its refineries, while Marathon Oil currently ships roughly 14% of its Bakken production by rail. But for railroads, this means more than just transporting petroleum products. Hydraulic fracturing—the oil drilling technique more commonly known as “fracking”—has created a major new business for railroads, because every horizontal well that’s drilled requires a trainload of sand, anywhere from 3,000 to 10,000 tons. The sand, combined with water, chemicals, and organic lubricants, is needed to break up the shale, located thousands of feet underground, that contains natural gas and oil. In the Upper Midwest, railroads are gaining new business by serving new sand processing plants. In some cases, this business is placing long-dormant rail lines back into service, along with upgraded tracks and new railyards and loading facilities. CN recently invested $35 million to rebuild a line, and Canadian Pacific is now serving several new sand processing plants, among them U.S. Silica Holdings, Inc. CP is the sole rail service provider at the company’s Sparta mine. Union

Pacific saw its fracking sand shipments grow a whopping 265% over the past two years. “Investors can take advantage of the trend by investing in the railroads,” notes Seeking Alpha. “Through the first eight months of the year, CP stock swelled 21.4%, and given its recent efforts there is no reason to think that trend will not continue. The amount of oil that CP alone carries from the Bakken Formation down through the heartland has surged 2,500% since 2009, to 8.5 million barrels per year from just 325,000. The company expects to move 45 million barrels per year within the decade. “It looks like that growth will continue. The same is true with rival CN, which returned 17.1% from Jan. 1 through the end of August. And, these figures are with the beating railroad companies across the board took earlier this year after the coal freight business slumped.” Of course, railroads aren’t the only good investment opportunity. “Railcar manufacturers also present a solid opportunity,” Seeking Alpha points out. “For instance, American Railcar Industries rose 19.7% in the first eight months of the year, and General Electric, which is the largest lessor of freight cars in North America, went up 14.7% in that period.” —William C. Vantuono


October 2012 Railway age 13


Update Siemens debuts North American PTC system

Siemens, best known in the communications and signals area as a supplier for rail transit systems (such as New York City Transit’s Canarsie Line inaugural CBTC installation), announced last month that it has developed Positive Train Control technology for main line North American railroads. Trainguard PTC is described as “a new train control system that works to prevent train accidents caused by human errors such as overspeed conditions or overrunning red signals. The Siemens PTC team in New York developed Trainguard PTC specifically for the North American market, in accordance with the Rail Safety

Improvement Act. Trainguard PTC offers U.S. railroads a new solution for achieving mandatory PTC implementation by Dec. 31, 2015.” Siemens conducted a field test from July to September 2012 at Transportation Technology Center, Inc., Pueblo, Colo., to validate system functionality. During the test period, Siemens hosted executive representatives from Class I freight railroads, commuter railroads, and the Federal Railroad Administration for live demonstrations of Trainguard PTC. “We received positive feedback from our customers and we are looking forward to an even closer cooperation

with the railroad industry to enhance the design of our PTC system,” said Stephan Klein, Siemens PTC program manager. “Thanks to our long-term experience with train control systems, we were able develop PTC in a very short time span and continue to be regarded as a reliable partner in challenging projects.” Siemens said observers at TTCI witnessed various test scenarios, including one of the core functionalities of Trainguard PTC, “where it automatically stops a freight train close to a red signal or under overspeed conditions without any driver intervention.” Additional test scenarios showed additional Trainguard PTC capabilities including “restrictive brake enforcement while creeping toward a red signal” and “precise, GPS-based train location determination.” “Many customers have expressed interest in Trainguard PTC and, in turn, we have intensified discussions with various U.S. railroads in order to develop a partnership for an initial pilot project,” Siemens said. “This will facilitate the rollout of Trainguard PTC and support Siemens’ customers in fulfilling the PTC mandate in time to increase the safety of America’s railroads.”

MTA New York City Transit plans to install newly-developed Help Points— digital, instant communications devices—in 102 subway stations to give riders access to assistance and information with the touch of a button. The installations follow the completion of a successful pilot at two Manhattan subway stations along the Lexington Avenue (4-5-6) Line. “For the first time, customers on the platform level of subway stations will have immediate access to the 14

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station booth and personnel at the Rail Control Center,” said the announcement. “Units will be positioned and spaced for easy access and high visibility. Created specifically for the subway environment, the Help Point is designed to be an easily recognizable communications tool for customers who need to either report an emergency or ask for travel directions.” A blue beacon light that will pulse when the unit is in action alerts first

responders in case there is an injured or sick customer at that location. “Expanding access to assistance throughout stations and platforms will make it easier for customers to either report an emergency or obtain directions if they get lost,” MTA Chairman & CEO Joseph J. Lhota said. The eventual plan calls for the installation of Help Points in all of the system’s 468 subway stations, replacing Customer Assistance Intercoms (CAI) units currently in use.

Siemens Industry

Help Points coming to 102 NYCT stations


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October 2012 Railway age 15


Update DART readies streetcar order worth $9.4M Dallas Area Rapid Transit is expected to choose Brookville Equipment Corp. to provide two modern streetcars for the proposed Oak Cliff streetcar project, awarding a contract of about $9.4 million. The order would be the first major one for modern streetcar equipment Brookville has landed, though the company has touted its ability to its modern Liberty streetcar for some time. “This is a huge deal for us, for it will be our first chance to show what we can do” producing modern streetcars, a company spokeswoman told Railway Age last month. Brookville’s bid was one of three proposals submitted for the Dallas project, along with CAF USA and Czech Republic-based Inekon a.s. Eight streetcar manufacturers submitted initial Expressions of Interest. Brookville is well known for supplying rehabilitated heritage and heritage-style replica streetcars to numerous U.S. locales, including systems in New Orleans, Philadelphia, and San Francisco. But the company is competing vigorously with other emerging streetcar suppliers, including Clackamas, Ore.-based United Streetcar and CAF USA, as well as larger players KinkiSharyo and Siemens Mobility, all of which have begun actively courting the potentially lucrative U.S. streetcar marketplace. The DART oversight committee also was expcted to approve a $28 million design-build contract to a joint venture comprised of Stacy and Witbeck, Inc. and local Dallas concern CARCON Industries and Construction. Federal TIGER grant funding is expected to cover about $23 million of the cost. The 1.6-mile streetcar route, support for which was generated largely by Dallas’ Oak Cliff neighborhood, would link Oak Cliff to Dallas Union Station, with four stops on the route. 16

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Perspective: Short Line & Regional eD elliS, JR

Short lines and passenger rail: A winning team

W

hen one hears the phrases “passenger rail” and “short lines” in the same sentence, one cannot help but conjure up visions of bucolic railroading: of steam locomotives, openwindow coaches, of meandering across field and stream to the sound of a lonesome whistle, and of riders delighting in the opportunity to experience travel as if still in a pre-asphalt America. But in addition to the more than 100 tourist and excursion train operators in this country—and not as well known— are the more than 50 short line and regional railroads that directly or indirectly support intercity and commuter rail services. Some serve as “host,” as the Buckingham Branch does for Amtrak’s Cardinal in Virginia. Some serve as “tenant,” as the New York & Atlantic does for the freight rail customers of the Long Island Rail Road. Some serve as operators, as the Nashville & Eastern Railroad does for the Music City Star, Nashville’s commuter rail service. And some provide supporting services; whenever Amtrak’s Empire Builder needs a car taken on or off in St. Paul, the job goes to the Minnesota Commercial Railroad, saving Amtrak the cost of a switch locomotive and crew. Short lines are proving able and responsive partners in passenger train operations, and for many of the same reasons that have endeared them to shippers: The people who run them based near the localities they serve and their lower overhead help to rein in costs and expedite decision-making. Two years ago, Amtrak became concerned about the decline in ontime performance of its Ethan Allan Express over the Vermont Rail System between Rutland, Vt., and Whitehall, N.Y., which it said was the result of track conditions. Vermont Rail Systems quickly assembled a team of people to address the problem. As it had

worked with state agencies in the past to find ways to rehabilitate other parts of its network, the railroad was able to gain commitments for funding that permitted them to upgrade the Rutland-Whitehall line, complimenting VRS’s own investment of $750,000 in the project. Work quickly got under way and passenger train speeds increased at each step of the

Short lines are proving able and responsive partners in passenger train operations. project’s completion. The result: A 30 % reduction in travel time and greatly improved train performance, to the extent that Amtrak has recognized VRS as proportionally its most improved ontime performer among all the Class I, II, and III railroads that host its trains. An exciting new development—and one that short lines seem tailor-made to play a part in—is the growing interest in privately operated regional passenger rail services as an alternative to those operated by public sector entities. This initiative has the support of many public figures, including those in Congress, which provided it a platform with their passage of the Passenger Rail Investment and Improvement Act (PRIIA) in 2008. Last year, the Saratoga & North Creek Railway, part of the Iowa Pacific Holdings System, began running scheduled passenger trains between North Creek and the rail station at Saratoga Springs, N.Y., used by Amtrak, resuming service that was discontinued more than 50 years ago.

Going beyond its commitments to New York’s Warren County when it took over operation of the line, Iowa Pacific’s management studied more than 60 plans, programs, and other deliverables required by federal regulators for a new passenger rail startup—and proceeded to meet every one of them. The result is a growing ridership and proof positive that a small railroad can get the job done. As chairman of the American Short Line and Regional Railroad Association’s Passenger Rail Committee, I work with an outstanding collective of individuals representing key stakeholders in the partnership between passenger rail and short lines. Meeting at regular intervals, the Committee has given guidance on passenger rail matters actually or potentially impacting ASLRRA member railroads, and last year assembled the Association’s reply comments to proposed rulemaking by the Federal Railroad Administration related to provisions of PRIIA. Included in the Committee’s membership are representatives from tourist and excursion train operators that are ASLRRA members, so that they may participate in and gain the benefits from the Committee’s work. Short lines will never be high speed rail and, as stated at the beginning of this article, some of their most enjoyable trains involve “low speed rail.” But they play an important role in our national passenger rail network and seem primed in so many ways to play an even greater role in the future. Short lines have long exemplified economist E.F. Schumacher’s credo that Small Is Beautiful. And for the future of passenger rail in America, it is likely that they will again prove themselves The Little Engine That Could. Ed Ellis is president and CEO of Chicagobased Iowa Pacific Holdings, and chair of ASLRRA’s Passenger Rail Committee. October 2012 Railway age 17


STV markS

One-HundredYears At STV, we’re bullish on rail. With a dual focus on passenger and freight systems, STV offers a full cadre of transportationfocused planners, engineers, architects, and construction experts supported by seasoned professionals who have built, operated, and maintained major rail properties nationwide. This combination of technical know-how and practical experience gives STV an edge in enabling our clients to achieve their unique visions. Our portfolio of world-class rail projects is extensive—from yards and maintenance facilities to stations and intermodal terminals, bridges and line sections, track and systems, and vehicles, as well as entire systems incorporating all of these elements. Whether it’s a planning study, a design program, a construction management assignment, or a complex design-build initiative, STV is your full-service source for rail consulting services. On these pages are just a few of the many signature projects representative of STV’s fully integrated capabilities. We have a 100-year history of excellence and quality service, and look forward to serving the rail industry for the next 100 years, and beyond. Dominick m. ServeDio, P.e. executive chairman

PATH World TrAde CenTer TrAnsPorTATion Hub New York’s rapid transit network is the city’s lifeblood. The destruction at the World Trade Center on September 11, 2001, affected many. STV is proud to be part of the Downtown Design Partnership, in association with architect Santiago Calatrava, leading the design of the Port Authority of New York & New Jersey’s PATH World Trade Center Transportation Hub, which will be the centerpiece of rail transit in Lower Manhattan for generations to come. We are committed to seeing this project to completion, helping to restore and improve a critical part of New York City’s world-class transit network


NJ TraNsiT/aMT aLP45-DP DuaL-Power LocoMoTive The versatile ALP45-DP electric/diesel-electric locomotive is more fuel-efficient, reduces emissions and noise, and increases operations flexibility for these vital regional/commuter rail systems. NJT and AMT personnel collaborated closely with STV on this innovative assignment. The STV professionals who worked on this vehicle have passenger rail field experience and a “can-do, will-do” philosophy. Christopher J. holliday, p.e., senior ViCe president and national praCtiCe leader, VehiCles & systems

rebuiLDiNg THe csX bay sT. Louis briDge STV’s freight rail practice is growing. Among our many areas of excellence are engineering and construction management for track and bridges, intermodal terminals, and classification yards as well as bridge inspections and rehabilitations. One of our award-winning projects was the rebuilding and strengthening of CSX’s Bay St. Louis bridge in Mississippi, in response to severe damage caused by Hurricane Katrina. roBert phillips, ViCe president, rail diVision

HousToN MeTro LigHT raiL sysTeM Part of being a full-service rail systems A/E firm is helping to create the next generation of rail engineers and designers. STV can offer young professionals involvement in exciting projects. With successful assignments like Houston Metro light rail (pictured) and new projects like converting Ottawa’s bus rapid transit to LRT, and the Charlotte LRT, STV has veteran experts eager to mentor young professionals for promising careers in rail. martin F. Boyle, senior ViCe president transportation and inFrastruCture diVision

cHarLoTTe area TraNsiT sysTeM LyNX bLue LiNe LigHT raiL STV has one of the largest systems groups in North America, as well as a highly developed vehicle practice. We’ve grown and integrated both specialties to where we have an experienced set of experts in all sub-practices. That’s why we’re a good partner to have for a new-start project, like the Charlotte Area Transit System Lynx Blue Line LRT. riChard m. amodei, senior ViCe president and ChieF strategiC growth oFFiCer

airTraiN JFK To JoHN F. KeNNeDy iNTerNaTioNaL airPorT STV has a history of providing multi-disciplinary services for major rail systems and facilities across the country. Our notable projects go back as far as WMATA’s original Virginia Square and Pentagon Stations, the Long Island Rail Road’s John D. Caemmerer West Side Storage Yard, and the start up of California’s Metrolink system, to the Port Authority of New York & New Jersey’s AirTrain JFK (pictured). This tradition continues today with our involvement in a key section of California’s high speed rail system. daVid l. Borger, senior ViCe president and national praCtiCe leader, transportation FaCilities


Story and photos by william c. vantuono, editor-in-chief 20

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October 2012


iNNotrANS 2012

North AmericAN SupplierS Go GlobAl

A

n increase in exhibitors and delegates, business deals worth billions of dollars, and—perhaps most significant—growth in international participation characterized InnoTrans 2012, the ninth edition of the global railway industry trade exhibition held in Berlin every two years. No fewer than 126,110 industry professionals from 140 countries took in the latest products and services, exhibited by 2,515 companies from 49 countries—a new record. Compared with 2010, when 2,243 companies from 45 countries displayed their products and services, this year there was a 19% increase in trade visitors, from 30 more countries than in 2010. Of note was the number of North American companies that

participated. “The amount of exhibitors from abroad was around 57%,” noted InnoTrans Director Matthias Steckmann. “Though most of them were from European countries, the proportion of non-European exhibitors is steadily increasing. It is now around 10%. Fifty-one companies from the U.S. and Canada participated. We are very pleased that, with REMSA, an American trade association participated for the first time, and organized our first USA Pavilion. We are confident

that this positive development will continue in the future.” “Overall, compared with 2010, InnoTrans reported growth in every important area—in exhibitors, trade visitors, international participation, and rented floor space,” the events’s organizers said. “InnoTrans 2012 presented cutting edge technology, underlined by the 104 world premieres displayed by exhibitors. As a business venue, InnoTrans 2012 saw deals of more than $2.3 billion signed.”

Left to right, at the USA Pavilion: AREMA Executive Director Chuck Emely; Andrew Hense, Loram; Dan Magnus, KLD Labs; Lynn Turner, Georgetown Railway Equipment Co.; Simmons-Boardman Rail Group Publisher Jonathon Chalon; Kristine Zelinski, Loram; Simmons-Boardman Chairman and President Art McGinnis Jr.; Erin Oldenburg, Loram; Alex McCLain, Herzog; Joe Kneib, Herzog; Cesar Mijares and Knox Kershaw; Knox Kershaw Inc.; Ryan McWilliams, International Engineering; Chris Kershaw, Knox Kershaw Inc.; and REMSA Executive Director David Soule.

October 2012 Railway age 21


Ge’S NeweSt powerhAul powerS coNtiNeNtAl europe

A

t InnoTrans 2012, GE Transportation unveiled its PowerHaul Series PH37ACai diesel-electric locomotive, which the company says “is continental Europe’s newest cross-border locomotive and our most technologically advanced, fuel-efficient, and low-emissions dieselelectric locomotive to date.” The double-cab, six-axle, 3,700-hp PH37ACai meets the latest European TSI (Technical Specifications for Interoperability). “Our PowerHaul series has been delivering fuel efficiency while lowering emissions for several years now,” says Rob McKeel, General Manager of GE’s Locomotive business. “Now, our European version can provide cross-border operations and meet the requirements of one of the most stringent standards in the world.” Engineered to support Europe’s lighter axle-load applications in freight service, the PH37ACai features starting tractive effort of 135,000 pounds, continuous tractive effort of 96,000 pounds, and dynamic braking effort of

43,000 pounds. Nominal weight is 126 metric tons; maximum weight is 129.8 metric tons. Equipped with a twinturbo, GE P616 16-cylinder prime-mover, common-rail fuel injection system, and AC traction, the locomotive meets current EU (European Union) IIIa and IIIb standards, “reducing fuel usage and greenhouse gas emissions by up to 9%, compared to current operating fleet averages,” says McKeel. HEP is available as an option for passenger service applications. To develop the locomotive, GE partnered with HHPI (Heavy Haul Power International), an EU freight rail provider based in Germany that specializes in 7,000-8,000 gross-ton, single-locomotive, Pan-European unittrain operations, particularly in the coal sector. The PH37ACai “is capable of operating more productive trains for bulk traffic than current technology, says HHPI Group Chairman Richard Painter. “Our focus is on cost per tonne, which will be achieved by one train doing the job of three existing

ones and therefore significantly benefiting the environment and the economy.” GE Transportation Systems LeaderGlobal Locomotives Len Hill (at the operator’s console, opposite page) and other PH37ACai project team members provided Railway Age with a tour of the unit. Hill noted that the locomotive is equipped with GE’s new “Tempo” ETCS (European Train Control System) Solution, “the first ETCS implementation on a PowerHaul Series Locomotive for 2013 deployment.” This system is part of Tempo Railway Solutions, described as “a comprehensive onboard and wayside signaling portfolio designed around a common failsafe, scalable hardware and

Progress Rail Services, parent company of Electro-Motive Diesel and a subsidiary of Caterpillar, Inc., displayed several Caterpillar diesel powerplants. Cat offers various powerplants for locomotive traction power, head-end power, and maintenance-of-way machines.

Simmons-Boardman Rail Group Publisher Jonathon Chalon (far right) and International Area Sales Manager Steve Barnes (second from right) confer with Bhilai Engineering Corp. Ltd. Executive Director Mukul Jain (far left) and Managing Director Geetika Jain. BEC is a Chhattisgarh, India-based, AAR-certified railway castings manufacturer. 22

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innOtRans 2012 ROundup

software platform as well as an integrated suite of engineering tools.” Tempo, deployed on the PH37ACai with GSM-R and GPS communications gear, “supports operations ranging from high traffic density urban lines or high-speed lines to lower traffic regional lines. The solutions also simplify railway signaling project execution, day-to-day operations, and maintenance.” The PH37ACai was built in cooperation with TÜLOMSAŞ, (Türkiye Lokomotif ve Motor Sanayi Anonim Şirketi), a Turkish locomotive and freight car builder. TÜLOMSAŞ is the main locomotive supplier to Turkish State Railways and one of the two companies that designs and assembles locomotives in Turkey. The other is EUROTEM (Hyundai EUROTEM, a joint venture of Hyundai-Rotem of South Korea and TÜVASAŞ of Turkey). The TÜLOMSAŞ headquarters and factory are located in Eskişehir. In addition to freight rail operators in continental Europe, GE’s markets for PowerHaul locomotives are the

GE Transportation Systems LeaderGlobal Locomotives Len Hill at the controls of the PH37ACai.

United Kingdom (Freightliner Group Ltd., where the PowerHaul debuted in 2009), South Korea (KORAIL, Korea Railroad), and Australia. KORAIL ‘s PowerHaul locomotives are built in cooperation with HyundaiRotem. The Australian units are built in cooperation with UGL Limited.

GE Transportation says it “continues to build regional and global partnerships to support customer reach and growth. This important partnership with TÜLOMSAŞ demonstrates GE’s commitment to serving customers in the UK, continental Europe, and other countries around the region.” story continues on p. 25

October 2012 Railway age 23


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ailway ge R A RAILROAD FINANCIALRAILROAD DESKBOOK 2013 FINANCIAL DESKBOOK 2013

DeskBook Contents DB3 DB4

INtRODuCtION By Tony Kruglinski, Contributing Editor BLACK GOLD RuSh By David Nahass, Senior Vice President, Railroad Financial Corporation

DB6 DB9 DB11

LOw INtERESt RAtES EmERGING ISSuES for 2013 2013 DiRECToRy


RAILROAD FINANCIAL DESKBOOK 2013

Introduction

CHRIS LITTLE

I

n October of each year, we put on our thinking caps and attempt to divine what is coming at us in the New Year— rail equipment and rail finance, that is. Some years it’s difficult to see that far into the future. This generally occurs when we are in the depths of a building slump and/or some kind of economic crisis. It’s not always easy in September (when this is being written) to see clarity in a foggy future for the coming year months in advance. When will things turn around? How quickly will the recovery come? This year: no problem. We are currently in a full-fledged, gangbuster equipment building boom. Led by massive new car building orders from the energy sector, our North American builders are on course to build and deliver what could be as many as 65,000 new cars this year. Even better, there seems to be no shortage of cash to support this building. Well-heeled industrial end-users of the cars are sitting on a ton of cash that’s available for railcar purchases. Where financing is desired there are nearly a dozen big banks vying to provide lease financing on extremely attractive terms that include bargain rents driven by the low interest rate environment which the economy is now enjoying. If you are a railroad and your credit is good, banks and investment banks are lining up to stuff debt on an unsecured basis into your pockets that you can also use to pay for your new equipment purchases. Trouble with your credit? If you a railroad or industrial enduser with “iffy” credit, there is an equally determined set of rolling stock investors placing orders for new equipment for their operating lease fleets. Some of these operating lessors have “underwriting” rules that require them to have leases in place before they take delivery of new built units. Others are willing to order and take delivery on spec. So strong is their view on the “sense” of building modern, efficient equipment for lease that they don’t seem to mind paying the higher prices that the builders are getting for new construction. (After all, the rents they are charging and getting have seen a parallel increase!) So, what are we looking for in 2013? The fog is still there, but are we are looking at a wall of fog for 2013 that could mask a brick wall of some kind that we, moving at today’s speeds, could hit at a high rate of speed? What could happen? Could it be that we might hit an economic crisis of some sort? We are already in an economic crisis of some sort and our rail equipment owners and operators are voting with their wallets for new modern equipment, engineered to become the basis for a renewed fleet that can last another 50 years. Since the rail equipment market is clearly benefiting from the boost that rail has received in this economy over other modes, it’s very difficult to see how an economic dip, even deeper than the one we are in, could have much of an impact. [Note: RA has predicted for some time that the North American “build” of new railcars needs to average 50,000 just to keep track with retirements in the existing fleet.]

What about the possibility that one of the markets underpinning today’s new building surge slips as a result of factors beyond the control of the folks building cars to service that market? For instance, what if one of the oil or natural gas fracking markets ends up causing some significant environmental damage of some sort and (the specific market) comes to a crashing halt? Call this writer Pollyanish, but I just don’t see any individual issue or family of issues ending what could be the era of American energy independence. No, we will stop building tank cars to haul crude oil when we either have enough of them or the railroads can’t move any more……or someone builds pipelines to replace them. None of that is likely to be hiding in the fog of the early months of 2013. For all of this writer’s interest in wanting to be the seer who predicts the ultimate sea-change in our marketplace that brings an end to the current boom times we are experiencing. For that I am profoundly thankful. Good luck in 2013! Tony Kruglinski is President of Railroad Financial Corporation, a financial advisor to the railroad industry.Tony is an investor in several railroads and railroad-related companies. He can be reached at tkruglinski@railfin.com.Tony is also Chairman of Rail Equipment Finance 2013 in La Quinta, Calif., March 3-6, 2013.To learn more about the 25th edition of this well-regarded industry conference, go to www.railequipmentfinance.com. October 2012 Railway age DB3


Tank car travails

By David Nahass, Senior Vice President, Railroad Financial Corporation

T

he proliferation of hydraulic frac drilling and its expansion into the Bakken Shale region of North Dakota has been one of the great growth stories for North American rail in 2011 and 2012. Initially, the demand for frac sand, the treated sand used in the horizontal drilling process, increased new car build demand (and prices). As many readers know, recently there has been some decrease in the demand for hopper cars due to the low prices of natural gas. Up in the Bakken, however, growth continues. Much of that oil is being hauled out of the Bakken region and put into 30,000 non-coiled and non-insulated tank railcars (30 Mg NC/NI in industry lingo). On Aug. 29, The Wall Street Journal reported that 325,000 barrels of oil were being loaded into railcars in the Bakken shale region on a daily basis. Demand for the 30Mg NC/NI tank railcar (and for other tank railcars as well) is through the roof. Tank railcar backlogs are generally into 2014 and there have been several highly publicized reports of multi-thousand orders for cars to service this demand. This is the second turn for the 30Mg NC/NI tank railcar. This functional and widely used tank railcar hauls as many as 30 different products. Four to five years ago, the ethanol boom drove demand for this car type to similar extremes, only to see the railcar inventory surge to oversupply and prices (for cars and leases) drop to historically low levels. One issue attached to the current iteration of unbridled enthusiasm for the 30Mg NC/NI tank car is a concern that the manufacturers, investors, and their customers are creating a “bubble” in tank railcars that will inevitably burst, not unlike the bubble that burst following the ethanol boom. Who can blame them? Rumors of short term lease rates that are multiple thousands of dollars per car per month might make anyone consider an investment in a tank car. DB4

Railway age

October 2012

Many oil producers ship the crude from the Bakken Shale region in unit trains of tank railcars. A unit train is a set of railcars (usually between 80 and 120) hauling one commodity to one location. Large quantities of unit trains of tank cars hauling commodities like crude oil and ethanol have increased scrutiny on the design of these cars. The result is that the AAR’s tank car committee has made certain design change recommendations that are likely to be implemented for DOT Class 111 (which includes the 30Mg NC/NI) tank railcars. The goals of the design changes are to make these tank railcars able to withstand 100 minutes in pool fire, to prevent rapid discharge of the commodity from a loaded car in

a derailment, and to prevent the puncturing of the tank. (A pool fire is, “A buoyant diffusion flame in which the fuel is configured horizontally.” http://fire.nist.gov/bfrlpubs/fire96/ PDF/f96068.pdf) Without going into specific detail on the design changes, generally they involve thicker material (steel) for the car shell, rollover protection (to protect the loading and unloading devices), a head shield (to prevent puncture), and a new pressure release valve. Tank railcars that were not manufactured to the new DOT Class 111 design specification can be retrofitted to meet the new requirements. Many cars can have the head shield and the rollover protection added, and the


SEDA-COG JOINT RAIL AUTHORTY ; WILLIAM C. VANTUONO

RAILROAD FINANCIAL DESKBOOK 2013

pressure relief value can be switched out. Many other cars will not be able to be retrofitted to withstand the pool fire requirement. Tanks that do not match up can still move crude, ethanol, gasoline, and denatured alcohol in 263,000 pound gross rail load (GRL) service. Cars may be able to move certain less hazardous commodities at the maximum 286,000 pound GRL capacity. No car will be required to be modified to remain in service. Here’s the point: If you follow the changes in railcar design over the last 20 years, there are two very significant design changes that have impacted railcars, their manufacture, and their financing. One is the increase in gross rail load to 286,000 pounds. The

second is the shift to a specifically designed railcar truck to haul that increase in capacity, the AAR S-286 truck design. The S-286 design was officially implemented in 2005. Any tank railcar built with a railcar truck that does not meet the S-286 spec will not be able to meet the criteria for hauling all commodities at 286,000 pounds capacity whether or not it meets the other design criteria. Approval of the recommendations from the tank car committee will mean that the inventory of cars able to haul all commodities at 286,000 pounds GRL will decrease significantly. One potential result may be a marginalization of (a) tank railcars built with the S-259 truck design (S-259 was

Railroads in 2012 saw a surge in frac sand activity (photo at left). The demand for hopper cars has slackened, due to the low prices of natural gas, but the demand for various tank cars (at right) remains stong.

the truck design prior to S-286) and (b) tank railcars built using an S-286 truck that cannot be retrofitted to meet the design criteria for DOT Class 111 cars. Demand will still proliferate, but there will be a distinct difference in the tank railcar marketplace. Suddenly the number of 286,000 pound GRL capacity tank railcars for hauling crude, ethanol, gasoline, and denatured alcohol may not look as bubbly as some people once thought. October 2012 Railway age DB5


Low interest rates keep many railcar leasing rents down

A

perfect storm of interest rate, tax, and market factors is driving down the medium term rents for many of today’s railcar users to historic lows. At this time, there seems no indication that this situation won’t continue into 2013.

• Low interest rates are contributing to

medium term lease costs of 3% or less per year depending on the credit quality of the borrower. With the economy in the doldrums and a Presidential election in the offing, the monetary policy that’s keeping rents down is likely to continue.

the new car building is being driven by a variety of economic factors, some super-heated, to be sure:

• Small cube covered hoppers and

general purpose 30,000 gallon tank cars are being built to serve the fracking industry that is pulling hydrocarbons from shale deposits both in the American West and in central and eastern regions.

• Industrials have decided that this is a

good time to reequip and have placed and are placing orders in line with this strategy.

• A variety of factors are pushing the

• Virtually all market sectors (with the

Today’s tsunami of railcar building and leasing has a diverse and incredibly strong economic underpinning. It used to be that spiked car building usually meant one thing ... operating lessors speculating on a hot rental market. All kinds of long term bets were placed on short term requirements and everyone shared in the roasting that the market served up for them when it turned. In this market,

Not only is it a great time to be a railcar builder; it turns out that it is a great time to finance these cars on medium term leases with the nation’s banks. What’s going on? Tax leasing—the purchase by a taxpayer of capital equipment for lease to others—is one of the few ways left

2012-2013 North American railcar build rate to near historic highs.

specific exception of railcars for the hauling of coal and center beam flatcars) are participating in this aggressive building of new cars.

RAILSOLUTIONS, INC. RAILSOLUTIONS Provides Quality Consulting and Advisory Services to Financial Institutions, Railroads, Leasing Companies and Shippers.

for a bank to manage its tax bill. The bank buys the equipment and uses the depreciation it receives as the equipment owner to subsidize lower rental rates. If you were able find manufacturing capacity, U.S. 50% bonus depreciation made 2012 a particularly good year to do this. It won’t be available in 2013, but this will have only a modest impact on tax leasing. Low interest rates also push down the rental costs of bank-provided operating leases. But there’s more! Financial debacles in the mortgage industry coupled with international efforts to bolster bank capital have combined to make long term leases (15-20+years) unattractive to banks. Instead, the banks which have had a positive “experience” with railcar residual

RailSolutions Offers:

• Railroad Equipment Appraisal and Valuation Services • Portfolio Analysis and Lease Valuation Services • Equipment Remarketing

• Railcar and Locomotive Inspections, and Technical Services

Edition 2012-2013 le Now Availab RS Rail Guide 2012 Cover G.pdf

• RailSolutions Publishes the Investors’ Guide to Railroad Freight Cars and Locomotives – A comprehensive reference manual covering market and valuation data on virtually all types of railcars and locomotives used in North American rail freight services.

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RAILSOLUTIONS, INC.

James D. Husband, President • Brett A. Steele, Vice President 6184 Grovedale Court, Suite 200; Alexandria, VA 22310 (703) 922-3800 www.railsolutionsinc.com

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Investors’ Guide to Railroad Freight Cars and Locomotives 2012 - 2013


WILLIAM C. VANTUONO

RAILROAD FINANCIAL DESKBOOK 2013

values on longer leases, have taken the view that medium term operating leases of 7 to 12 years are just their cup of tea. The result? Railcar buyers, particularly those with decent credit, are finding that they have very affordable financing alternatives to the 1-year to 5-year operating leases traditionally offered by North America’s operating lessors. If railcar buyers can stretch their commitments to meet the banks’ sought-after 7-to-8 year minimums, they can do a sale/ leaseback and save 20% to 25% on the rents that the operating leasing companies need to make their deals make sense. Even better, the bank deals come with purchase options. (Existing car owners are getting in on the action with their own sale/leasebacks.) Make no mistake about it. Operating lessors are open and eager for business and are writing new leases

at rates that finally make financial sense for them. But these deals are primarily in the operating lessors’ “sweet spot” of 1 to 5 years and don’t come with purchase options. If the operating lessors’ borrowing costs are also at near-all-time lows, why aren’t they passing along the costs to lower short term rents of operating lessees? Well, they are … in a sense. If interest rates were not this low, operating lessors would need to charge significantly more than they do today for many of their rents. (Clearly, when something in short supply like tank cars are concerned, the shortages are driving up the rents being charged.) Or the cars that are needed for our industry that the operating lessors are buying to add to their fleets would not be purchased in the numbers that are currently being ordered. Low interest rates help everyone.

A quESTioN oF BAlANCE Many general news media reports, linking the boom in u.S. natural gas production and the falloff in coal use, suggest u.S. freight rail activity (and equipment use) will automatically decline—presuming coal uses railcars; nat gas production does not. Not so fast, Tony Kruglinski has already warned Financial Edge Readers (RA, Aug. 2012, p. 44): “limited pipeline resources exist to carry hydrocarbons from where they are currently being extracted to where they need to go, and a good slug of new tank car building is being driven by the needs of the oil and gas industries. There is also the lift that new sand car building for fracking is giving to the new car industry.”

October 2012 Railway age DB7


THIRTEEN For further details, and shop locations, please call: Wayne Willis Rob Hassen (419) 891.6336 (419) 891.2998 wayne_willis@andersonsinc.com rob_hassen@andersonsinc.com

RETHINK YOUR MOW EQUIPMENT OFFERING.

SEE WHERE PROGRESS CAN TAKE YOU. Want the highest level of customer service, and Maintenance-of-Way equipment that goes the distance? Progress Rail Equipment Leasing – formerly FCM Rail Ltd. – is the largest lessor of MOW equipment in North America, and part of the Caterpillar family. We offer a host of leasing programs tailored to meet your financial needs. Whatever the MOW need, Progress Rail Equipment Leasing knows railroad operations and the equipment involved.

MOW EQUIPMENT | MOTIVE POWER | INTERMODAL LIFTING EQUIPMENT | EARTHMOVING MACHINERY Scan for more information on our inventory.

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800-476-8769 • www.progressrail.com

WHEREVER THERE ARE RAILROADS, WE’RE THERE.


RAILROAD FINANCIAL DESKBOOK 2013

Emerging issues for 2013

calendar quarter of each year, we focus on industry hot spots or trends that appear to be emerging in the next 12 to 18 months. We thought that for this year’s Railroad Financial Desk Book we would share some of the topics that we are considering for our March agenda:

• Tank Cars and Sand Cars: We expect

B

eyond predicting the difficultto-ignore signs of continued good times for our industry in 2013, what is likely to be going on next year that will need the attention of professionals following the rail equipment and rail leasing markets? Each year Railroad Financial Corporation sponsors our Rail Equipment Finance Conference in March in Palm Springs. (See our ad on page DB2.) As part of the agenda process for that meeting in the fourth

Rail Equipment Finance 2013 to provide increased focus on the rail industry’s involvement with the oil and gas industry. Moving crude oil and gas by rail as well as the movement of fracking sand to drilling sites are sure to be areas of focus. What’s going on? How long will the boom last? What impact will the boom have long term on North American railcar fleets and their values? As we have already reported in this issue of the Desk Book, we expect these trends to continue, but the market shift, if and when it comes,

Railonomics

could be swift and we will be keeping an eye on it.

• PTC: On the locomotive side, we will be tackling the advent of Positive Train Control apparatus in the cabs of road locos both from a manufacturing point of view as well as after markets. We’ll explain what PTC is, what it costs and who is being asked to pay for it. We have already heard some rumblings that railroads leasing locomotives for short to medium terms may ask lessors to pay for some of the costs of adding PTC to their units.

• Railcar Building: So far the North

American railcar building industry (OEM’s and component suppliers) have done a superb job of managing the ramp-up to produce the cars that they have chosen to produce. 2013 may be more of the same or a different story. We will be watching it carefully.

TM

[reyl-uh-nom-iks] Definition: Optimized rail solutions from CIT Rail, based on industry-leading leasing and equipment management expertise. CIT Rail has a long-standing commitment to providing leasing solutions to rail shippers and carriers. We leverage deep experience and one of the youngest, most diversified railcar and locomotive fleets in the industry. Our solutions free up capital for your growth priorities, increase efficiencies and reduce out-of-service time.

Visit citrail.com or call 312-906-5701

ATTRACTIVE ASSETS • FLEET MANAGEMENT CAPABILITIES • CAPITAL PRESERVATION

© 2012 CIT Group Inc. CIT and the CIT logo are registered ser vice marks of CIT Group Inc.

October 2012 Railway age DB9


pending accounting changes will impact accounting in our industry and how these changes may have on equipment leasing decisions. We’ll do our best to discuss these questions, the possible answers to them and try and predict the future impacts.

• Locomotives: One of the big stories

overview of 2012 “deals” we expect to explore the recent advent of medium term bank single investor leases. What questions will we be asking? What banks are still “in” this market? What kinds of equipment are they buying to

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lease back to end-users? And, most important, when does it look like their appetite will be satiated?

• Pending Accounting Changes: While it’s not at all clear what the final rules will look like, there are important questions being asked about how

Finally, we’ll make an offer to any of our readers who would like to suggest topics either for our 2013 Railway Age “Financial Edge” columns or our REF2013 agenda to contact this writer at tkruglinski@railfin.com with any ideas or questions on what might be

WILLIAM C. VANTUONO

• Finance: In addition to our usual

in 2012 has been the remanufacturing of older EMD power with newer 710 Series prime movers. Will this trend continue? We will also visit the industry’s movement toward implementing the latest level of EPA emissions requirements and the overall cost and performance of these new units being built by both EMD and GE.


RAILROAD FINANCIAL DESKBOOK 2013

2013 Directory FINANCE COMPANIES

CIT RAIL

30 South Wacker Drive, Suite 3000, Chicago, IL 60606; 312-906-5700. CIT Rail provides financial solutions to the bulk freight transportation marketplace by closely working with freight shippers, receivers, carriers, intermediaries and facility operators across all modes to customize financial solutions to each customer’s individual needs. As a full service lessor and owner of one of the youngest, most diversified fleets of rail assets in North America, CIT Rail brings unparalleled asset management expertise and commitment to the transportation sector. CIT Rail owns and manages a fleet of over 100,000 railcars and more than 500 locomotives.

COMPASS CAPITAL CORPORATION

An international asset finance and management company located in San Francisco and Chicago. The company’s major emphasis is arranging and acquiring lease investments, primarily in transportation equipment. We provide customized leasing services to finance railcars and locomotives, capital and/or operating leases, portfolio acquisition services. Mike O’Gara, Senior Vice President, 940 West Adams Street, Suite 103, Chicago, IL 60607. (312) 421-2701; Fax (312) 421-2742; e-mail mogara@compasscapitalcorp.com.

FCM RAIL, LTD., A PROGRESS RAIL LEASING COMPANY

15173 North Road, Fenton, MI 48430; Denny Gilstad, Chairman CEO; Trent Marshall, President; Danny Brown, Vice President; 810-714-4626; Fax: 810-714-4680; email: trent@ fcmrail.com. FCM Rail, Ltd., the largest lessor of maintenance of way equipment in North America, is a full-service leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 50 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. FCM develops leasing programs to cut equipment costs and provides leasing structures that are tailored to meet the rail industry’s specific and ever-changing needs. Visit us on the web at www.fcmrail.com. ARRANGERS

THE DAVID J. JOSEPH COMPANY

300 Pike Street, Cincinnati, Ohio 45202; (513) 419-6200; fax (513) 419-6221; Trey W. Savage, VP Rail Group; Ken Roseberry, Director Rail Equipment Group; Keith Kelsey, Ken Johnson, and Matt Siemer, Regional Sales Managers; Tom F. Pellington, Sr. Director Transportation Services;

Steven R. Skeels, Chief Mechanical Officer; and Ann Edwards, Mgr. Retired Rail Assets (502) 212-7365. The David J. Joseph Company’s Rail Equipment Group is a fullservice transportation company providing a broad range of services throughout North America. Single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchase and sale of portfolios, and private fleet management. Other services include railroad car dismantling for scrapping and parts reclamation.

RAILROAD FINANCIAL CORPORATION

676 N. Michigan Avenue, Suite 2800, Chicago, IL 60611; 312-222-1383; FAX: 312-222-1470; Anthony D. Kruglinski, President, tkruglinski@railfin.com; David G. Nahass, Senior Vice President, dnahass@railfin.com. RFC represents domestic and international clients in the following areas: debt and lease financing of rolling stock; railcar and locomotive fleet acquisitions and sales; lease brokerage; mergers and acquisitions; equity and debt financing of rail property acquisitions, and lease restructurings. RFC also provides continuing education for the industry. LESSORS

THE ANDERSONS RAIL GROUP

Rail Car Division, 480 West Dussel Dr., Maumee, OH 43537; FAX 419-891-2749; Rasesh Shah, President Rail Group 419-891-2958; Chuck Brown, Sales Manager 419-891-6386, chuck_brown@andersonsinc.com. Formed in 1989, The Andersons Rail Group has enjoyed steady growth in the number of cars leased and managed from Maumee, Ohio. Currently, our portfolio consists of approximately 22,000 cars and 150 locomotives. To better serve our customers, The Andersons Rail Group operates a large fleet of mobile units, 13 repair facilities, and a steel fabrication facility to produce custom rail components. We understand the importance of having extensive knowledge about taxation, government regulations and railroad requirements. As a valued customer of The Andersons Rail Group, you can expect reliable equipment, flexible lease options and superior customer service. Please visit our website at: www.andersonsinc.com.

C.K. INDUSTRIES, INC.

Sales Office: P.O. Box 1029, Lake Zurich, IL 60047-1029; 847-550-1856; Fax: 847-550-1854; e-mail: rmeyers@ckrail. net; Richard E. Meyers, Vice President; Headquarters: P.O. Box 0087, Deland, FL 32721-0087; 386-738-7611; Fax 386-738-7622; Claude Bigot, President. C.K. INDUSTRIES, a privately held Florida corporation, began its U.S. leasing October 2012 Railway age DB11


LESSORS Cont. operations in 1980, and offers its services to shippers, shortline, regional and class 1 railroads in North America. New investment opportunities up to $10MM of both new and used types of freight cars will be considered. Our existing lease fleet offers a wide variety of car types to meet your lease requirements. We offer mid to long terms, either on a full service or triple net basis.

THE DAVID J. JOSEPH COMPANY

300 Pike Street, Cincinnati, Ohio 45202; (513) 419-6200; Fax (513) 419-6221; Trey W. Savage, VP Rail Group; Tom F. Pellington, Sr. Director Transportation Services; Steve R. Skeels, VP Chief Mechanical Officer; Ann Edwards, Mgr. Retired Rail Assets (502) 212-7365; Ken Roseberry, Director Rail Equipment Group; and Ken Johnson, Keith Kelsey and Evan Terhar, Regional Sales Managers. The David J. Joseph Company’s Rail Equipment Group is a full service transportation company providing a broad range of services throughout North America. Single investor, leverage leases, freight cars, portfolio evaluation, remarketing fleet management, purchase and sale of portfolios, and private fleet management. Other services include railroad car dismantling for scrapping and parts reclamation.

FCM RAIL, LTD., A PROGRESS RAIL LEASING COMPANY

15173 North Road, Fenton, MI 48430; Denny Gilstad, Chairman CEO; Trent Marshall, President; Danny Brown, Vice President; 810-714-4626; Fax: 810-714-4680; email: trent@fcmrail.com. FCM Rail, Ltd., the largest lessor of maintenance of way equipment in North America, is a fullservice leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 50 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. FCM develops leasing programs to cut equipment costs and provides leasing structures that are tailored to meet the rail industry’s specific and ever-changing needs. Visit us on the web at www.fcmrail. com.

FIRST UNION RAIL

One O’Hare Center, 6250 N River Road, Suite 5000, Rosemont, IL 60018; 847-318-7575; Fax: 847-318-7588; Rich Seymour, Vice President Sales and Marketing. First Union Rail, a Wells Fargo company, is one of the largest, most diverse railcar leasing companies in North America. We have a solid industry reputation for providing superior equipment and exceptional service. First Union Rail offers a variety of customized finance and operating lease structures, as well as marketing and transportation management services. Let First Union Rail’s team of professionals help find the right equipment to solve your transportation needs. DB12

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FLAGSHIP RAIL SERVICES, LLC

300 South Riverside Plaza, Suite 1925, Chicago, IL 60606; 1-888-4RAILCAR. Gene Henneberry, President & CEO, (312) 559-4801; Tim Johnson, Senior Vice President Railcar Leasing – Midwest & Southwest, (312) 559-4805; Patrick McGrath, Vice President Railcar Leasing-Southeast, (919) 845-5144; Jeffrey Griffin, Vice President Railcar Leasing -Northwest, (402) 778-4806. Flagship Rail Services is a full service operating lessor, invested in all tank and freight car types, offering a broad selection of equipment leasing and financing products for the North American rail industry. Flagship Rail can structure a solution for all of your rail equipment needs, short and long term, full service or net leases, sale/leaseback, or portfolio acquisition. Visit us at www.flagshiprail.com.

GATX CORPORATION

James Earl, Sr. Vice President and Chief Operating Officer, GATX Corporation, 500 West Monroe, Chicago, IL 60661 Tel: 312-621-6200 Fax: 312-621-6546 GATX is a leader in the rail leasing industry with more than a century of experience, preeminent expertise in specialized railcars, and a growing international presence. GATX meets shipper and railroad needs with one of the largest lease fleets of tank and freight cars and locomotives in the world. We provide our customers with a unique mix of financial (global financing, valuation, structuring, leasebacks, joint ventures, partnerships) and mechanical (regulatory, maintenance, engineering, cleaning, inspection) services in North America. Contact via www.gatx.com or 1-800-428-8161.

GE CAPITAL RAIL SERVICES

161 N. Clark Street, Chicago, IL 60601; Email railinquiries@ge.com; Website www.ge.com/railservices. With roots in the railroad and intermodal sectors that span nearly a century, the building blocks of the industry are in our DNA. We offer an unmatched combination of industry experience, leadership, innovation, and financial strength. Whether you’re looking for smart leasing solutions for five or 5,000 railcars and maintenance and fleet management services, we’re your “go-to” resource.

GREENBRIER LEASING COMPANY

One Centerpointe Drive, Suite 400, Lake Oswego, Oregon 97035; TEL: 800-343-7188; FAX: 503-968-4383; www. GBRX.com. J.T Sharp, President, Larry Stanley, Vice President. Greenbrier Leasing Company provides a full range of operating and financial leases of railroad freight cars to shippers, shor tline, regional, and Class I railroads. In addition to owning a fleet of approximately 10,000 cars, we develop financial structures customized to meet a multitude of customer requirements including; full-service, net, and per diem leasing structures, with both short-term and longterm options, sale-leaseback and like-kind exchanges as well as upgrade and modification programs. Our approach allows


RAILROAD FINANCIAL DESKBOOK 2013

lmartini@infinityfunds.com. Infinity Rail, LLC, is an Operating Lessor with a fleet of over 7,000 freight cars. We offer our customers both financial and operational flexibility. We offer Full Service, Net and Per Diem Leases to Shippers and all Class I, Regional and Short Line Railroads. A broad spectrum of general use and specially modified equipment is represented in the Infinity portfolio. Our fleet is comprised of covered hoppers, boxcars, gondolas, open top hoppers, flatcars and inter modal equipment. Our in-house mechanical expertise allows us to offer you equipment maintenance and modifications that keep your leased railcars working for you.

MACQUARIE RAIL INC.

customers to meet current needs and position their business to capitalize on future opportunities. The Greenbrier Companies, Inc. manufactures a full range of freight cars designed for the carriage or intermodal containers, automotive products and vehicles, grain and agricultural products, forest and steel products, sand and cement, plastics and solid waste. We operate one of the largest repair and refurbishment networks with over 34 facilities strategically located facilities in North America, providing railcar repair, maintenance, refurbishment, wheel and axle services and railcar component parts. Greenbrier is also a leading provider of rail asset management services with a variety of proprietary software productivity tools and one of the most experienced teams in the industry.

HELM FINANCIAL CORPORATION

BRUCE KELLY

505 Sansome Street, Suite 1800, San Francisco, CA 94111; Tel: (415) 398-4510, Fax: (415) 398-4816; Brad Wind, Executive Vice President-Director of Marketing; Ken Miller, President Joint Ventures & Strategic Alliances; Francois Bernard, Senior VP Mechanical Locomotives, Brian Marty, VP Equipment Services; Full service rail equipment leasing company offering railcars and locomotives for lease and/or sale. For more than 30 years, Helm has offered operating leases of freight railcars and locomotives to railroads and shippers throughout North America. In addition, Helm Rail Equipment Services specializes in selling locomotive parts to the railroad industry. Helm’s diverse fleet of railcars and locomotives is available to meet all your rail equipment needs. Please call 415-398-4510 or visit our website at www.hlmx.com for additional information.

INFINITY RAIL, LLC

1355 Peachtree Street, NE, Suite 750, Atlanta, GA 30309; www.infinityrail.com; Larry Smith, VP-Equipment Sales; Tel: 678-296-9709; email: lsmith@infinityfunds.com; Lee Martini, AVP – Sales & Marketing; Tel: 678-904-6315; email

1 North Wacker Drive, 9th Floor, Chicago, IL 60606; Telephone: 312-756-3880; Fax 312-756-3847; Email railinfo@macquarie.com; Website www.macquarierail.com. Macquarie Rail Inc. is a rapidly growing freight car lessor serving the North American marketplace. Through combining an experienced team of rail veterans with the strength and expertise of the Macquarie Group, we are building a diverse portfolio of equipment to serve the varied needs of railroads and rail shippers.

MITSUI RAIL CAPITAL, LLC.

71 South Wacker Drive, Suite 1800, Chicago, IL, 60606 Phone 312-803-8880: John O’Bryan, President; Dan Penovich, Vice President Sales and Marketing; David Kerr, Director of Marketing; Dana Koenig, Director Sales; Dan Linklater, Director Sales; Scott Carroll, Director Sales. A highly experienced management team, a fleet of more than 10,000 modern freight cars, and high-quality service combine to give Mitsui Rail Capital customers an edge when it comes to transportation. In addition to a diverse fleet of the latest rail equipment, Mitsui Rail Capital offers fleet management and maintenance services as well as On-Trax, our proprietary internet-based system for fleet tracking, maintenance, and component wear management. Mitsui Rail Capital, LLC offers both net and full service terms as well as customized, value-added financing options. Our goal is to exceed customer needs in an increasingly dynamic and challenging environment. Mitsui Rail Capital, LLC is an affiliate of Mitsui & Co. Ltd.

PROGRESS RAIL SERVICES

Progress Rail Services, a wholly owned subsidiary of Caterpillar Inc., is a leading supplier of a full range of locomotive, railcar and track products and services. Our service and repair facilities are strategically located around the globe – with a network of more than 130 locations across the United States, Canada, Mexico, Brazil, Italy, Germany, and the United Kingdom – and our mobile crews offer even greater service flexibility. Our extensive inventory of parts and components allows us to reduce down time and return units quickly to service. We also offer recycling and demolition services. Our diversity of products and services October 2012 Railway age DB13


means more value for our customers. Through its acquisition of Electro-Motive Diesel, Progress Rail furthers its commitment our customers, providing industry-leading products and services. Founded in 1922, Electro-Motive Diesel is an original equipment manufacturer of dieselelectric locomotives. Contact Progress Rail Services, P.O. Box 1037, Albertville, AL, 35950, (800) 476-8769. www.progressrail.com.

RELCO LOCOMOTIVES, INC.

P.O. Box 83282, Baton Rouge, LA 70884, 815-467-3030. www.relcolocomotives.com. Relco, as one of North America’s leading locomotive rebuild, remanufacturing and leasing companies, can provide a full range of locomotive leasing and maintenance services. Since 1961, RELCO has developed a reputation for providing the finest motive power and custom maintenance packages to fit any need: • Full line of both switching and road power available. • Specifications ranging from qualified to completely custom remanufactured. • Aftermarket systems upgrades available, including radio remote controls, microprocessor control systems, fuelmanagement systems, etc. • Nationwide full-maintenance programs available. • Net, full-service, financial and sale/leaseback programs.

TRINITY INDUSTRIES LEASING CO.

2525 Stemmons Freeway, Dallas, TX 75207 Roger D. Wynkoop, President. Tel. 214-589-8437 email roger.wynkoop@trin.net; Eric Marchetto, Vice President. Tel. 214-589-8925 email: eric.marchetto@trin.net Thomas C. Jardine, Vice President. Tel. 214/589-8503 email tom. jardine@trin.net. Trinity Industries Leasing Company is a wholly owned subsidiary of Trinity Industries, Inc. (NYSE: TRN), providing full service and net operating leases of railroad tank and freight cars to industrial shippers and railroads throughout North America. Trinity?s diverse portfolio consists of over 41,000 freight and tank cars leased on terms of one through twenty years. Trinity is also a leading provider of railcar management services, with a customer base of railcar owners of over 77,000 railcars. Trinity’s combination of creative financing and asset management expertise provides solutions to your rail fleet challenges. For more information on Trinity’s railcar leasing and management services, visit our webpage at http:// www.gotilc.com. PROFESSIONAL SERVICES

AMERICAN RAILCAR INDUSTRIES, INC.

100 Clark Street, St. Charles, MO 63301-2075. Phone: 636.940.6020. FAX: 636.940.6100. Email: sales@ americanrailcar.com. Website: www.americanrailcar.com. We Build and Service the Whole Car! DB14

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• Design • Manufacturing • Repair • Fleet Management Contact Us to Find Out How ARI Can Best Serve YOU!

RAILROAD APPRAISAL ASSOCIATES

Division of The Occor Company; Management Consultants providing a variety of consulting services to the railroad and urban transportation industries; and the financial institutions and leasing companies which serve them. Railcar and Locomotive Appraisal & Inspection Services for New and Used Equipment, Rail Equipment Portfolio Reviews and Valuation, Market Studies, General Consulting. We have over 20 years of market experience and data. Patrick J. Mazzanti, President; David A. Work, Senior Locomotive and Railcar Inspector. Headquarters: 7709 Blivin, Spring Grove, IL 60081, (815) 675-3300 – Fax: (815) 675-3303 – E-mail: pat@railroadappraisals.com.

RAILSOLUTIONS, INC.

6184 Grovedale Ct., Suite 200, Alexandria, VA 22310; 703-922-3800; FAX: 703-922-8229; www.railsolutionsinc. com; James D. Husband, President; Brett A. Steele, Vice President; RailSolutions provides a broad variety of railroad equipment-related consulting, technical and advisory services to financial institutions, railroads, shippers and fleet operators with a primary focus on equipment valuation and appraisal services. Additional areas of expertise include railcar and locomotive inspections, equipment remarketing, equipment repair and overhaul cost analyses, and portfolio valuations. RailSolutions draws on over 30 years of railroad industry experience in railcar and locomotive equipment valuations supported by both a sound base of market data and advanced analytical techniques. RAILROAD ACQUISITION SPECIALIST

FCM RAIL, LTD., A PROGRESS RAIL LEASING COMPANY

15173 North Road, Fenton, MI 48430; Denny Gilstad, Chairman CEO; Trent Marshall, President; Danny Brown, Vice President; 810-714-4626; Fax: 810-714-4680; email: trent@fcmrail.com. FCM Rail, Ltd., the largest lessor of maintenance of way equipment in North America, is a fullservice leasing firm offering a host of programs and services specifically tailored to meet your exact financial needs. With more than 50 years of specialized experience in the railroad industry, our experts’ dedication and uncompromising focus on quality sets us apart from the competition. FCM develops leasing programs to cut equipment costs and provides leasing structures that are tailored to meet the rail industry’s specific and everchanging needs. Visit us on the web at www.fcmrail.com.


The right equipment. The right terms. The right people. Taking your product to market efficiently and reliably requires the right equipment. First Union Rail has just what you need: modern railcars and experienced professionals who can offer reasonable leasing terms that make sense for your company. Let us help move your business forward with: Railcar financing and leasing • Reliable fleet management services • Modern, high-quality fleet Ready to learn more? Call today at 847-318-7575 • Firstunionrail.com © 2011 Wells Fargo & Company. All rights reserved. First Union Rail Corp. is associated with Wells Fargo & Company, a company that is not regulated in Canada as a financial institution, a bank holding company or an insurance company. MC-2235

We make 20th century railcars work for the 21st century.

U.S Operating Lessor of Railcars & Intermodal Equipment. • Over 50,000 units of transportation equipment consisting of railcars, intermodal chassis, containers and trailers. • In-house mechnical & engineering expertise. • Cars refurbished and upgraded to meet our customers’ specifications. • Exceptional customer service. • Flexible leasing options (Full Service, Net, Per Diem). Larry Smith Vice President Equipment Sales Office: 678-904-6306 Cellular: 678-296-9709 Email: lsmith@infinityfunds.com

Lee Martini Assistant Vice President Sales & Marketing Office: 678-904-6315 Cellular: 404-290-9233 Email: lmartini@infinityfunds.com

Corporate Offices 1355 Peachtree Street NE Suite 750 - South Tower Atlanta, GA 30309 www.infinityfunds.com A venture of Infinity Capital and Perella Weinberg Partners

October 2012 Railway age DB15


innOtRans 2012 ROundup story continued from p. 23

lB foster was one of 51 north american railway suppliers that exhibited at innotrans 2012. left to right: Kostas Papazoglou, vice President, rail technologies; Greg lippard, vice President-rail Products Sales; and Kevin haugh, President, cXt, inc. among lB foster’s emerging markets are russia, china, Southeast asia, and Khazakstan.

emD, bombArDier teAm up iN iNDiA

E

lectro-Motive Diesel (a subsidiary of Progress Rail Services) and Bombardier Transportation announced at InnoTrans 2012 that they have joined forces to assemble diesel-electric locomotives in India for export to Southeast Asia and the Pacific region. The joint venture builds upon a similar collaboration between both companies at Bombardier’s manufacturing site in Ciudad Sahagun, Mexico. Bombardier will manufacture certain components, including underframes and bogies, and assemble the EMD locomotives at its Savli, Gujarat facility in India. EMD will provide all engineering and quality control and will be responsible for product performance. EMD President and CEO Billy Ainsworth (left) noted that EMD has been doing business in India for 50 years. During that time, the company has manufactured about 700 locomotives there, “many of which are still in operation,” he said. “We looked at the Asia-Pacific region, and we determined

that India was the best place to manufacture locomotives for that market. India is an industry-friendly nation, and there’s a growing railway supply industry base there for meeting our needs. There’s a solid labor base. We have an engineering center of excellence in India. And Bombardier understands world-class quality. We know this from the work they have done for us in Sahagun.” None of the locomotives built at the Savli plant will be for the Indian market. EMD operates a separate manufacturing plant in India to serve that market. “Since 2008, we have invested E$30 million in our Savli plant,” said Bombardier Transportation President and Chief Operating Officer André Navarri (right). Bombardier employs about 1,100 people in India at three facilities involved with vehicle and propulsion system manufacturing and signaling and train control software development. “Bombardier and EMD will help transform the rail transportation industry in the region by leveraging both of our companies’ capabilities,” said Navarri. “By further expanding our global relationship with EMD, Bombardier will provide best-in-class products in keeping with our tradition of quality and extend our range of rail vehicle manufacturing in India.” “This announcement furthers our commitment to our global customer base, and we fully intend to build upon our heritage,” said Ainsworth. “In September 2011, we announced the opening of a facility in Patli [in Guragon, India] for locomotive traction control systems. We want to continue to invest in the region with this and other promising projects.” October 2012 Railway age 25


Bob mcintire (second from right), President of the mcintire Group, consults for north american railway suppliers on international business opportunities. louis Panzica (far left), President and ceo of Power drives inc., and Pdi regional vice President Sales, locomotive Products david word (far right) meet with mcintire and voith’s wolfgang fischer.

Knox Kershaw (left), founder of the maintenance-of-way equipment manufacturing company that bears his name, greets innotrans 2012 delegates at the uSa Pavilion. Knox Kershaw inc. was one of six american suppliers that participated in innotrans under the auspices of remSa (railway engineering maintenance Suppliers association).

Global railway supplier Bombardier transportation’s massive exhibit drew many innotrans delegates. Bombardier also had numerous rail vehicles on display in the outdoor exhibit area.

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innOtRans 2012 ROundup

Freight car manufacturer Greenbrier Europe, a subsidiary of The Greenbrier Companies, displayed this tank car built for ERMEWA Group, Geneva, Switzerland, a railcar leasing firm.

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Total Friction Management™ can increase rail life up to 50% and save enough fuel to more than cover the operating costs. Total Friction Management can deliver results! The systematic implementation of friction control, combined with the technology required to monitor and effectively manage friction to minimize costs and maximize benefits is a reality. We have the knowledge, expertise and resources to deliver the tangible financial results from increased rail life, enhanced track structure integrity and significant fuel savings.

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the skF Lubrication Business Unit’s flagship Lincoln wayside gauge face applicator continues its evolution.

friction management

GLIDE PATH TO EFFICIENCY By Mischa Wanek-LiBMan, engineering editor

F

riction modification has morphed from art to science. Suppliers are spending a lot of time in the lab developing and testing products for proper lubricity, and that can withstand the temperatures and pressures of the wheel/rail interface.

Biobased lubricants

Environmental Lubricants Manufacturing, Inc. (ELM) has added microwave-based grease manufacturing

thanks to improved delivery methods, friction modifiers have become highly effective. capabilities, which is expected to reduce the production cost of its petroleum level rail curve grease products. According to ELM, microwave-based grease manufacturing was invented at the University of Northern Iowa, and

licensed to Marion Mixers in Iowa. ELM has been testing a production size unit for the past three years. This year, ELM added two 40,000-pound grease reaction vessels to work with two microwave transmitters at 150 kW total energy input. “Offering better performance and biodegradability for products grown here in the U.S. and matching the cost of petroleum greases is welcome news to the industry,” said Dr. Lou Honary, founding director of UNI/NABL Center October 2012 Railway age 29


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lubrication products. “Our switch plate lubricants are formulated with natural seed oil and proprietary additives to protect switches from wear, rust, and corrosion. Designed to be poured, brushed, wiped, or sprayed, the lubricant prevents against dust and dirt buildup, while resisting washout from rain or melting ice.”

Continued product evolution

LB Foster has been broadening the application and usage of next-generation friction modifier materials.

and chairman and president of ELM. Honary says that biobased greases not only provide superior metal-metal separation at the point of contact in rolling stock, but they also tend to remediate soil contaminated with nonrenewable greases. The soil bacterial activity due to the presence of biobased materials creates an environment that helps in breaking down contaminants. Alan Burgess, ELM operations manager, said “Our products are now being offered through a major nationwide distributor, making it easier for railroads to get biobased grease. Plews & Edelmann Company has the UltraLube brand of grease and other lubricants available in all retail stores, as well as having distribution sites for pails, drums, and totes of rail curve grease in various parts of the country.” ELM has tested its products in the field and has worked with TTCI to test products. This year, ELM’s products are part of a comparative test of rail curve 30

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greases in a DOT sponsored project at the University of Northern Iowa. “We work with biobased oil suppliers to use vegetable oils most suited for industrial lubricants. This brings the resources of seed companies and companies that chemically modify renewable oils for use in our products,” said Mike Jensen, ELM product manager. UltraLube Rail Curve Greases and Switch Plate Lubricants, which has exclusive rights to ELM’s soy compound, says its products provide increased lubricity to reduce wheel and track wear and improve fuel efficiency. “Rail curve greases also contain advanced extreme pressure additives to guard against wheel and rail wear and are available with added molybdenum disulphide, which offers enhanced effects for greater protection. The greases are formulated to resist port plugging in wiping bars and provide longer carry down track from the lubricator. They offer better gauge face coefficient of friction and less migration to the top of the rail than petroleum-based grease,” said Dave Babics, senior product manager for

The engineering teams at L.B. Foster Friction Management have invested significant resources in further improving the company’s equipment in the areas of performance, efficiency, and reliability. “This includes the refinement of our PROTECTOR® trackside system’s real-time electronic controls to provide a precise, guaranteed volumetric output of friction control media (lubricants at the gauge face and KELTRACK® at the top rail) over a wide range of operational, physical and environmental conditions. Attention to the finest details has led to improvements in the internal design of our applicator bars, resulting in further improvements with respect to robustness, simplicity and maintainability,” said Kevin Oldknow, vice president, technology and business development. Oldknow notes that the digital world’s evolution has created an expectation among customers to have remote information available in order to make intelligent decisions in the management and deployment of constrained maintenance resources. “With this in mind, we have made further investments in the core communication technologies used to transmit remote performance monitoring (RPM) data and in the web-based applications used to leverage this data for insights in decision-making. We now have systems deployed on several continents in both the northern and southern hemispheres that are working seamlessly with the local telecommunications networks and protocols to transmit data back to a central server where our customers can conveniently


monitor the health and performance of their systems and establish active alerts to notify them whenever conditions change,” said Oldknow. The company has been further broadening the application and usage of next-generation friction modifier materials, such as KELTRACK ER (Enhanced Retentivity) to deliver top of rail friction control benefits at dramatically reduced application settings (i.e., material usage rates). L.B. Foster says it has also brought a new and more technologically sophisticated material to the domain of traction enhancement with the commercial release of Alleviate™ traction gel, which acts to combat low adhesion conditions caused by, for example, organic pastes occurring at the wheel/ rail interface during the fall leaf season. “Our focus remains on providing our customers with products and services that add value. Friction at the wheel/

rail interface manifests itself in a surprisingly diverse range of phenomena that are meaningful to the railway operator,” said Oldknow. “Correspondingly, management of friction at this interface provides a diverse range of benefits to the operator in optimizing productivity. As an example, the extension in rail life that is provided by an effective friction management program improves both the economics and utilization of the infrastructure. Economic improvements come from a straightforward reduction in rail replacement rate, while utilization is improved when fewer time slots are occupied by rail change out activities. The same arguments apply to track maintenance activities in general, such as fastener replacement and re-gauging.” Oldknow notes fuel savings also play a major role in delivering verifiable benefits to the industry. He says that over the past several years it has been

demonstrated that a territory-wide approach to friction management (including Kelsan™ AutoPilot™ train mounted top of rail friction control) can provide measurable reductions in locomotive diesel usage in both highly curved, and shallow curved/tangent track territories. Robolube Industries now has its new Linear Wayside Lubrication System installed on a Class I main line track.

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fRictiOn management

“The theoretical work to understand this through wheel rail contact analysis and simulations is just now catching up to the point where these widespread savings can be rigorously understood and explained. The net result is a substantial improvement in fuel efficiency over broad territories,” said Oldknow. The company also points to

mitigation of rolling contact fatigue (RCF) through effective friction management as another area in which operational efficiencies can be improved. Noting, when the growth rate of RCF (and wear) is slowed, rail surface and profile conditions can be managed with less effort and metal removal via grinding. In addition to the

further extension in rail life that this provides, there is an additional impact in which grinding resources become more effective (for example the same number of grinders can cover a wider portion of the network under resource constrained conditions). “As we continue our efforts toward maximizing the effectiveness of our products, we have a long history of working very closely with the customer base, as well as third-party research institutes (for example, the AAR-TTCI and NRC-CSTT) and consultants, to ensure that our products and technologies meet and exceed the expectations of the industry in providing reliable, quantitative benefits. A significant body of research, for example, has been carried out over many years to quantify the benefits of KELTRACK for friction control at the top of rail/wheel tread interface. This research has included exhaustive work to verify the safety of KELTRACK (vs. lubricants) from the standpoints of locomotive adhesion and braking effort, as well as verifying the compatibility of this material with signaling systems, sanding, and ultrasonic testing,” said Oldknow.

Developing a system

Loram Maintenance of Way, Inc., is currently working on a new and improved friction modification delivery system. The new system is flexible enough to work with a variety of friction modifiers of different viscosities and at a large temperature range, which gives the customer more options on unit placement. “This system will allow us to vary quantity of friction modifier based on the needs of the customer,” explains Jon Behrens, integration manager at Loram. “This variability allows us to skip more or less axles and reduce waste base on train traffic.” The company also offers YardGlide for use in hump yards to reduce the rolling resistance of the cars after they come through the retarders. This reduction in rolling resistance allows the cars to reach their final destination at a slower speed, reducing the impact loading during 32

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coupling and preventing the cars from stopping short. Loram has integrated the YardGlide system in with the hump yard controller, which allows the yard controller to increase or decrease the amount of friction modifier based on destination in the yard. The yard controller can also shut the unit off when running a switcher locomotive through. TracGlide is Loram’s locomotive mounted system for friction management. The system works to reduce the friction of the wheels on the trailing cars. The friction modifier is fully consumed by the end of the consist, which increases the train fuel efficiency and helps increase the speed of the train traveling up grades. “Loram continues to invest in research and development,” said Behrens. “We have a scale test model of a wheel and rail to provide research into new friction modifier and the benefits. Once the lab has provided samples, we then partner with a railroad to perform real-world testing.”

Expanded footprint

The SKF Lubrication Business Unit’s flagship Lincoln wayside gauge face applicator continues its evolution based on customer needs. “The applicator has the same Lincoln Pump-To-Port™ technology and now can be installed quickly by only one person. Applicators that are easy to remove and reinstall during rail maintenance are beneficial when dealing with tight track maintenance windows,” said Eric Nieman, rail lubrication product manager, SKF Lubrication Business Unit. “Another new product is the Lincoln SLID top-of-rail applicator, which squirts (not sprays) friction modifier in predetermined quantities to an exact position on the rail. Friction modifiers now can be measured and placed precisely, thus dampening noise from the stick-slip effect, reducing waste of expensive material and reducing environmental contamination.” Nieman notes there have been advances in the SKF EasyRail on board systems, which are mounted on board the locomotive or rail vehicle and spray greases or 34

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friction modifiers onto the wheel flanges or the top of rail. The smart controllers optimize the sprayed quantity by triggering lubrication based on curve, distance, time, and direction inputs. “From a tribology point of view, wheel/rail contact is no different than a roller bearing. Track and wheel wear rates and noise emissions can be reduced by applying lubricant to the wheel/rail interface to reduce friction. By applying the precise amount of lubricant at the proper time, our customers realize reduced track and wheel maintenance, while minimizing costs associated with friction modifiers and greases,” said Nieman. Since the acquisition of Lincoln by the SKF Group in 2010, the two brands have combined their extensive research and development efforts to ensure continued innovation in the global market. “Customers benefit from the SKF Life Cycle Management approach to reduce total cost of ownership and maximize productivity through every stage, from specification and design to operation and maintenance,” said Nieman.

Linear lubrication

Robolube Industries, Inc., has completed in-house testing of its new Linear Wayside Lubrication System and is now in the final testing stage with the system, which has been installed on Class I main line track. “The Robolube Linear System uses only one ounce of grease per train, utilizing the ‘Field Proven’ Robolube technology in providing a hirail application of lubricant to the gauge face in a wayside lubrication configuration,” said Bob Pieper, president of Robolube. Pieper says the minimal amount of grease used means less maintenance, optimal grease displacement/consumption, reduction or elimination of hazardous mats, and minimal waste. “Since there is absolutely no contact with trains, the unit can be mounted at the ideal location; which is in the apex of the curve. Here, lubricant is best applied for carry down the rail and there is virtually no cast

from centrifugal forces of the wheels, eliminating waste and environmental issues. The design also allows for quick removal and installation for track maintenance and servicing,” said Pieper.

Learning from different markets

Whitmore has completed the acquisition of QHi Rail Ltd., a U.K.-based wayside lubricator equipment company. According to Bruce Wise, Director of Railroad Sales for Whitmore Rail, the acquisition will allow Whitmore Rail to offer customers a complete lubrication system. The company is busy adapting existing QHi equipment to the North and South American rail markets.“The North America freight environment is much more rugged and the equipment needs to stand up to that,” said Wise. “Our system has the ability to adjust for changes temperature. The output of our unit is much more consistent across a range of temperatures.” Whitmore Rail has also developed two new lubricants, RailArmor, for rail curves and SwitchArmor. Both were developed based on Whitmore’s experience in other industries. “Because we are in other market segments outside of railroads, such as mining, we’ve been able to use technology from our mining lubricants and apply it toward our rail curve grease. It’s performed well,” said Wise. Wise also mentioned that the company worked closely with Class I railroads in RailArmor’s development in “tough” field locations. Partnering with the railroads is key to Whitmore Rail’s research and development efforts and the company recognizes that it is a two-way street. While the railroads allow fieldtesting of lubricants on their property, Whitmore Rail allows the railroads access to its lab facilities. Whitmore Rail currently has a major freight railroad using its climatecontrolled test chamber, which can simulate cold weather conditions in a controlled environment, for comparative testing of both lubricants and equipment. RA


hIGheR-speed RaIl

IllInoIs sets the MIdwest pace By Douglas John Bowen, Managing eDitor

California and the Northeast may grab more high speed rail attention, but Illinois, Union Pacific, and Amtrak are pursuing an alternate approach to improving U.S. passenger rail speeds.

Rich Harnish, MHSRA

F

or Midwest rail passengers, “Meet Me in St. Louis” may soon get a whole lot more convenient. As fall begins, Amtrak has begun testing 110-mph passenger train speeds on a 14-mile portion of Union Pacific right-of-way between Dwight and Pontiac, Ill., a precursor to improved speeds between Chicago and St. Louis by 2015. Plans call for trip times of 3½ hours between the endpoints, compared with 5½ hours or more at present. (RA, February 2010, p. 9.) Arduous travel times notwithstanding, Chicago remains a Midwest hub for numerous passenger rail routes, and one of them, Amtrak’s Chicago-Detroit service, already has established top speeds of 110 mph—higher-speed rail (HrSR) territory. What, then, makes the Chicago-St. Louis route a key indicator of the U.S. passenger rail future? “The plans were in place,” says Rick Harnish, executive

director of the Midwest High-Speed Rail Association (MHSRA), giving credit to Illinois’ Department of Transportation for the latter’s aggressive pro-rail stance. “That’s the most important lesson.” The Illinois Commerce Commission (ICC) also has played an active role.

Illinois sets the Midwest pace

Indeed, Illinois’ preparation gave the state an edge in competing for the $8 billion HSR package announced by President Obama in April 2009. In late January 2010, it landed $1.1 billion (of $8 billion in total HSR/HrSR funding) more easily than some other states—a triumph roundly criticized at the time by House Rep. John Mica (R-Fla.). Consider also that virtually the entire route (St. Louis excepted) lies within one state, and, Harnish says, Chicago-St. Louis will soon become the shining star of Amtrak’s Chicago October 2012 Railway age 35


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higheR-speed Rail

hub. “The fact that the UP route is in a single state is very important,” allowing Illinois to move aggressively without objections from neighboring states. “And the access into Chicago [from St. Louis] is easier to deal with than the access to Chicago from Detroit,” he says, indirectly referencing the Chicago Region Environmental and Transportation Efficiency Program (CREATE) involving both freight and passenger rail. (RA, February, p. 19) Unspoken by anyone publicly is the health of the endpoints involved. St. Louis has weathered significant economic stress, and has lost population in the past decade, according to U.S. Census figures, but it has fared better than Detroit. And while Amtrak’s ridership on both lines has increased in the past decade, Detroit for now remains a terminus. St. Louis, by contrast, is connected not just to Chicago but is served by existing (if sparing) Amtrak service linking it with points west (including Kansas City) and south (Dallas/Fort Worth).

Illinois DOT; Rich Harnish, MHSRA

two years of preparation

This summer a Harsco Track Renewal Train (TRT-909) continued work on a second main track on the segment, following up on similar work begun in 2010. Other related work included four-quadrant gates at grade crossings, new signaling, and other ancillary items such as fencing for the right-of-way. A sticking point, says Harnish, involved signaling, due in large part to the congressional mandate for Positive Train Control (PTC) to be placed on all major rail routes shared by freight and passenger trains. “We [in Illinois] had pushed really hard to get cab signals installed between Dwight and Springfield. The state was ready. Then the Chatsworth, Calif., incident occurred. Union Pacific, in response, said it wasn’t going to commit to cab signaling because it would have to install PTC anyway”—an understandable response, Harnish notes. “There’s still a significant amount of work to do to get the entire corridor ready,” said Michael Stead, rail safety program administrator for the ICC. “It’s about improving safety, whether it’s a highway user or a pedestrian.” ICC, IDOT, UP, Amtrak, and the Federal Railroad Administration have agreed on a warning time of about 80 seconds for trains approaching grade crossings at 110 mph, comparable to the time allotted crossings on Amtrak’s Keystone Corridor in Pennsylvania and Empire Corridor in New York. Warning time will be correspondingly less for grade crossings on right-of-way cleared for lesser speeds, Stead said. Stead said the actual waiting time for vehicular traffic at grade crossings along the route will change very little (a concern raised by some residents and municipalities along the route). “All the delay will be on the front end of the 80-second warning,” said Stead. “We’re talking a matter of seconds” because the trains will clear the crossing more quickly.

Above left, opposite page: A Harsco Track renewal train similar to this one worked on installing a new second main track. Above: The project, well under way, is being constructed in phases. Completion is slated for 2015. Below: Concrete ties, high-speed turnouts, and new signals are among the corridor’s many capital improvements.

October 2012 Railway age 37


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The U.S. Department of Transportation last year found roughly 70 grade crossings along the route that required safety upgrades, with quadrant gates the most likely option for most of the locations. Pedestrian crossing gates also are included.

Rich Harnish, MHSRA

Modest, momentum as a model

Measured against the ambitious plans of the California HighSpeed Rail Authority for 220 mph service, or even against Amtrak’s new long-term vision for its Northeast Corridor, the Illinois/Amtrak/UP effort may appear insignificant in the high speed rail arena. Looks deceive politically, however; success on this route—one whose physical constraints have plagued Amtrak for decades—could showcase what benefit HrSR offers to numerous routes, and the cities along them, throughout the U.S. in the not-too-distant future. Not that MHSRA advocates are fully satisfied. “I would call this upgrade the minimum that Amtrak should be,” says Harnish, choosing his words carefully. “I’m reluctant to even call it higher-speed rail.” Harnish says the danger lies in low expectations—“‘We can’t do much so let’s not try to do much’—it’s a flawed and dangerous argument.” And yet, Harnish allows, “It’s far better than what we had back in 2003; we were clearly very stuck in place.” Lessons learned include “starting to understand better how to run

The new rail station at Normal. Ill., was in the planning stages for a long time, according to Rick Harnish. The federal TIGER program provided the money to finally build it.

high-quality service in cooperation with freight railroads. Harnish says that he’s not surprised by UP’s ability to cooperate, since “they do a decent job running Metra trains.” The core issue, Harnish says, is the “incremental cost formula; we have to come to terms with the right way to compensate the freight railroads in any public-private partnership arrangement.” The current state-by-state patchwork approach to a federal intercity rail system also needs to be resolved, Harnish notes. Illinois Gov. Pat Quinn recently teased MHSRA by asking why it wasn’t more concerned with the commitments (or lack of same) from other nearby states. Harnish says the governor and Illinois have earned bragging rights simply by utilizing federal funds to advance longstalled projects. “Normal, Ill,, now has a new station; the project had been on the books for a long time, but suddenly with the TIGER program, there was money to do it. And Illinois was ready. That’s huge,” he says. “It’s great to see new track in place, widened and cleaned-up right of way, and it’s clear that the state is making an investment. We need to keep that pace up.” Ra October 2012 Railway age 39


People

Meetings

HigH Profile Railworks Corp. has promoted ed Kennedy to president of Railworks Track Services, inc. Kennedy has served since 2007 as vice president and general manager of Railworks Track Services, the company’s track construction and maintenance subsidiary serving the Midwest and Northeast markets. He is responsible for directing all aspects of operations through Railworks Track Services’ six regional and local offices. Kennedy has worked in the railroad construction industry for 20 years, beginning as a track Kennedy laborer. “ed has provided leadership throughout the Railworks Railworks Corp. organization since its founding in 1998 and has been instrumental in not only the company’s growth, but also its exceptional performance in safety, quality, and operational efficiency,” said John august, the corporation’s executive vice president. “ed exemplifies the type of leadership we believe is essential to guide our organization to future success.” Railworks also appointed Daniel (“Danny”) Brown as corporate equipment manager, overseeing the corporation’s vehicle and equipment fleet.

November 7-9 Association of Car Accounting and Car Service Officers (ACACSO) Fall Meeting

KANSAS CITY SOUTHERN—Carlos J. Velez appointed Vice President Business Solutions and Marketing, reporting to KCS executive Vice President Sales and Marketing Patrick. J. Ottensmeyer. METROLINK—Michael P. DePallo named CeO. MTA NEW YORK CITY TRANSIT— Herbert E. Lambert appointed Chief Transportation Officer, Rapid Transit Operations. SOUND TRANSIT—Michael Harbour named Deputy CeO.

SUPPLIERS Colo Railroad Builders appointed Wade Hoffmann Vice President of Business Development. Gannett Fleming said William W. Fryer, P.E., and James P. O’Keefe have joined gannett Fleming Transit & Rail Systems. Operation Lifesaver Inc. announced Helen M. Sramek, who has served as Oli president since 2007, will retire Nov. 1. Railway Supply Group named Marc Trani Vice President of Sales for Unity Railway Supply Co. inc. and ireco llC. 40

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October 2012

R. J. Corman Railroad Group promoted Nathan Henderson to Vice President of Strategic Sales and Marketing. Watco Transportation Services named Phillip Allen Chief engineer of Structures, responsible for the company’s bridge management program. Keith Barksdale named assistant Vice President of Transportation Safety.

100 YEARS AGO in

(OCTOBER 1912) MAINTENANCE-Of-WAY One of the things which usually impresses a foreign railway engineer traveling in this country is the extensive use of concrete and the wide variety of its uses. We have become so accustomed to its widespread use in this country that it is difficult for us to realize how extensive is its adoption and how rapid its development has been. The importance of this material is railway construction is illustrated by the reports presented at the Bridge and Building Association convention. Concrete is rapidly coming to be the universal material for permanent construction work, and it is still probably in the early stages of development.

San Diego, Calif. website: www.acacso.org.

November 11-13 2012 IANA Intermodal Expo anaheim Convention Center, anaheim, Calif. Tel.: 866-438-3976; email: iana. exp@intermodal.org; website: www.intermodal.org/expo.

January 9-12, 2013 NRC 35th Annual Conference & Exhibition loews Miami Beach Hotel, Miami, Fla. ashley Bosch, Tel.: 202-7151247; email: abosch@nrcma.org; website: www.nrcma.org/go/ conference.

January 23-24, 2013 Midwest Association of Rail Shippers (MARS) 2013 Winter Meeting Oak Brook Hill Marriott Resort, Oak Brook, ill. Bill Schauer, email: wrschauer@ sbcglobal.net; website: www. railshippers.com/regional/ midwest.

January 24-25, 2013 9th Annual Southwestern Rail Conference Bernie Rodriguez, Tel.: 469-5679728; email: bernie@ texasrailadvocates.org; website: www.texasrailadvocates.org.

February 4-5, 2013 Railway Age/Parsons International Conference on Communications-Based Train Control washington Marriott, washington, D.C. Jane Poterala, Tel.: 212-620-7209; email: jpoterala@sbpub.com; website: www.railwayage.com.


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:

FRA Part #

Last Update Effective:

40 . . . . . . . . .7-3-12 209 . . . . . . . .6-25-12 210 . . . . . . . .8-14-89 211 . . . . . . . .7-20-09 213 A-F . . . . .6-25-12 213 G . . . . . .6-25-12 214 . . . . . . . .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

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12

232 233 234 235 236 237 238 239 240 242

. . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .8-13-12 . . . . . . . .6-25-12 . . . . . . . .7-13-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .6-25-12 . . . . . . . .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. 50 or Item FRA Code Part # Each more

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) 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

BKTM

BKPSS

232

Brake System Safety Standards

NEW!

26.40

8.95 8.55 8.55 6.25 8.55

8.25 7.85 7.85 5.85 7.35

4.15 3.50

3.80 2.75

12.25

10.95

5.25 9.40 10.00 19.95 8.35 5.25 11.75

4.75

10.00

9.00 7.85 4.75 11.00

Each

13.75

12.50 Each

46.00

Passenger Safety Standards 20.80 Part 238, 239 - Order 25 or more and pay only $18.95 each

BKSTC

Signal and Train Control Systems Under Revision Part 233, 234, 235, 236 Coming Soon!

BKMPIE

Motive Power & Equipment Inspection Under Revision Defect codes for 215, 218, 223, 229, 231, 232 Coming Soon!

BKCAD

Drug and Alcohol Regulations in the Workplace Part 40 & 219

The Railway Educational Bureau 1809 Capitol Ave, Omaha, NE 68102

Fax: (402)346-1783 • Email: orders@transalert.com

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 229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

Mech. Dept. Regs.

BKMFR

$26.95

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.

BKLER

Qual. and Certif. of Loco. Engineers

$11.75

Order 50 or more and pay only $11.00 each

9.00

25 or more

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

There are no new proposals or final rules to report for this issue. Be sure to check back next month to see if there are any changes to FRA regulations.

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.

BKCONDC

17.50

35.00

Conductor Certification

$10.00

Order 50 or more and pay only $9.00 each

Order Now!

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

www.transalert.com

Add Shipping & Handling if your merchandise subtotal is: UP TO $10.00 10.01 - 25.00

Add $4.10 Add 7.20

25.01 - 50.00 50.01 - 75.00

Add 9.80 Add 10.90

Orders over $75, call for shipping

*Prices subject to change. Revision dates subject to change in accordance with laws published by the FRA. 10/12


Products Snap-On Industrial railroad track impact sockets The railroad impact sockets are manufactured with a special alloy steel, black oxide finish and come with the flank drive design for added strength and durability.

Snap-On industrial has launched seven new railroad track impact sockets, used for the installation and removal of square head screw spikes, washer head lag screws, track nuts and bolts.

among the features: • Single square nose turned socket 7/8-inch (Part Number iM728NT) is used for 3/4-inch washer head lag screws; • Single square tapered nose socket 1 1/8-inch (Part Number iM736NT) has a tapered nose to fit when clearance is an issue; • Drive deep frog bolt socket 2 3/16inch (Part Number N8741) is used for installation and removal of frog bolt nuts

• Double square tapered nose socket 1 7/16-inch (Part Number SiM746NT) is used on 7/8-inch track bolts; • Double square socket 1 5/8-inch (Part Number N8842) is used on 1-inch track bolts; • Double square tapered nose socket 1 11/16” (Part Number N8834) is used on 1 1/8-inch track bolts; • Double square tapered nose socket 1 13/16” (Part Number N8835) is used on 1 1/8-inch track bolts. For more information about the seven new railroad track impact sockets, call Snap-On at 877-740.1900, or visit www.snapon.com/industrial.

2013 Annual Conference as part of Railway Interchange 2013

September 29 - October 2, 2013 Indianapolis, IN

CALL FOR PAPERS AREMA invites all interested parties to submit papers on subjects of interest to the railway engineering community to be considered for publication and/ or presentation at the AREMA 2013 Annual Conference. Subjects of interest include: • • • • • •

Communications & Signals Engineering Services Maintenance Passenger & Transit Structures Track

Submission Deadline: Dec. 14 Please visit www.arema.org for more information on submitting a paper and important deadlines and dates!

+1.301.459.3200 42

Railway age

October 2012

Norgren actuator system for curved restroom doors littleton, Colo.-based Norgren offers a new curved actuator system allowing maximum opening of curved restroom doors for disabled access. The system makes it simpler for railcar builders to design ADA-compliant suites and toilet cubicles in limited spaces while offering their end users lower life cycle costs and easier maintenance. Norgren has developed an extruded curved guide and integrated it with a toothed belt, actuators, motor, and controller into a space-saving package. Roller tracks inside and outside the extrusion improve stability and make door action smoother. a quieter drive mechanism makes the actuator ideal

for doors on sleeping cars. Doors can open to a maximum width of 43 inches, more than wide enough to meet ADA requirements for wheelchair access. Opening time is controllable up to 60 seconds. Maximum force is also controllable, down to 13.5 pounds, well within aPTa guidelines. The system can be used with double or single leaf door layouts. Using an extruded guide rather than pressed or formed metal tracks allows Norgren to customize size and radius. Plastic-faced wheels reduce resistance. Contact Norgren, Tel.:303-618=7604; email: enquiry@usa.norgren.com; website: www.norgren.com/us/rail.


Washington Marriott Hotel February 4-5, 2013 ConferenCe ToPICs

Railway Age/Parsons

10th International Conference on

COMMUNICATIONSBASED TRAIN CONTROL

Efficiency Productivity Safety Please register me for Tenth International Conference on Communications-Based Train Control taking place February 4-5, 2013 in Washington, D.C. Registration fee is $925 per participant. All fees payable in advance.

Name ________________________________________________________ Title ________________________________________________________ _ Company _____________________________________________________ _ Address _______________________________________________________ City __________________________ State __________ Zip_____________

• Innovation, sustainability, and the future • International railroad and Transit Project Updates • CBTC/PTC User roundtable • Business operations and Applications • CBTC Upgrades to Mature systems • CBTC/PTC supplier roundtable • rf solutions for CommunicationsBased signaling ConferenCe Communications-based train control (CBTC) is revolutionizing all modes of railway transportation, passenger and freight, by adding capacity, increasing train throughput, enhancing safety, and reducing equipment life-cycle costs. The ninth International Conference on CommunicationsBased Train Control, presented by railway Age and Parsons, will provide status reports on exciting, state-of-theprojects and share information on initiatives to standardize this technology and insure interoperability. MArKeTInG oPPorTUnITIes: event sponsorships are available. Contact Jane Poterala at 212-620-7209 or email jpoterala@sbpub.com For program updates visit: www.railwayage.com/conferences 37.002.1830

Email ______________________________________________ ___________ [ ] Check Enclosed (payable to Railway Age) [ ] Invoice Me (invoice will be sent via e-mail) Charge My

[ ] MasterCard [ ] Visa [ ] Amex

Account Number _______________________________________________ _ Expiration Date ________ / __________ Security Code ________________ Name of Card Holder ____________________________________________

Phone _________________________ Fax __________________________

Billing Address ________________________________________________ _

Registration: Please send this completed form, or a photocopy, with your payment to: Jane Poterala, Conference Director, Railway Age; 345 Hudson St., 12th Fl., New York, NY 10014; Tel.: (212) 620-7209; Fax: (212) 633-1165; E-mail: jpoterala@sbpub.com. Conference Fee: The registration fee for CBTC 2013 includes admission to all conference sessions, conference documentation containing all available presentations, and social events. Registration confirmation and invoice will be e-mailed. Hotel: The Washington Marriott Hotel has set aside a block of rooms at $219 single/double for

conference attendees. These will be held until 30 days prior to the conference; those reserving after that date will depend upon room availability. We suggest that you contact the hotel directly at (202) 872-1500 for room reservations. Specify “Railway Age.” You will receive room confirmation directly from the Washington Marriott Hotel. Cancellation Policy: Confirmed registrants who cancel after January 23, 2013 are subject to a $250 service charge. Registrants who fail to attend are liable for the entire fee unless they notify Railway Age in writing prior to the event.


Training • Books • DVDs • Wall Charts • Maps • Cyclopedias NEW 2012 ! Emergency Response Guidebook

Railway Operation and Control – Second Edition

Safe, efficient, and reliable railway operation depends upon fundamental concepts of signaling, traffic control, scheduling, and capacity. These principles are universal to rail transportation, but their application varies among railways throughout the world. Railway Operation and Control discusses signaling and traffic control practices from the English, German, and North American perspective as well as the more universally applicable concepts of scheduling and capacity research. Chapters on train dynamics and basic terms used in railway operation provide necessary background information for those who do not have a railway operation background. 267 pages. Soft cover

BKROC

Railway Operation and Control

A guide to aid first responders in quickly identifying the specific or generic hazards of the material(s) involved in the incident, and protecting themselves and the general public during the initial response phase of the incident. Sections are color coded providing a ready reference for hazardous incidents to allow for identifying the hazard; public safety measurements to take; and, emergency response actions and first aid. 392 pages. Soft cover.

BKERG

Emergency Respons Guide

$8.95

$39.95

Urban Mass Transit - The Life Story of a Technology by Robert C. Post The history of mass transit vividly illustrates the technological and social struggles that have accompanied urbanization and the need for an efficient and cost-effective means of transportation in cities. Urban mass transit as a technology - rather, as a technological system - that provided an essential complement to industrialization, urbanization, and, ultimately, to the rise of consumer culture. It begins as a narrative with the omnibus and horsecar in the 1830s and takes it to the renaissance of urban mass transit at the turn of the 21st century. Urban Mass Transit focuses on innovations in the United States as well as worldwide developments. 198 pages. Softcover.

BKUMT

Urban Mass Transit

$27.00

Freight Car FRA Regulations Track Safety Standards, Subparts A-F • BKTSSAF • $8.95

Coal Trains: The History of Railroading and Coal in the United States • BKCOAL • $37.00 Guide to Freight Car Air Brakes • BKFCAB • $68.75

Dictionaries Dictionary of Railway Track Terms • by Chris Schulte • BKRTT • $29.50

Guide to Freight Car Trucks • BKFCT • $82.50

Railway Age’s Comprehensive Railroad Dictionary • BKRD • $29.95

Mechanical Department Regulations • (Parts 210, 215, 216, 217, 218, 221, 223, 225, 229, 231, & 232) • BKMFR • $26.95

Guide to Couplers and Draft Systems • BKCDG • $59.75

Transit

Locomotive

Urban Transit: Systems & Technology • BKUTST • $145.00

General

Guide to Locomotive Mechanical Maintenance - SD & GP Locomotives • BKGLMM • $31.25

Urban Transit: Operations, Planning & Technology • BKUTOPE • $150.00

Canadian Rail Atlas • MPCANAT• $76.95

The Modern Locomotive Handbook • by J. C. Kissinger • BKMLH07 • $19.75

Public Transportation: On the Move • by Marc Wortman, PhD • BKPTRANS • $60.00

Safety on the Rails - The Union Switch & Signal Story • by Joanne L. Harris • BKSOTR • $39.99

Maps Railroads of Canada Wall Map (laminated) • MPRRCAN • $99.00

Emergency Responder’s Guide to Railroad Incidents • by Greg A. Rhoads • BKERGRAIL • $30.00

Railroads of Mexico Wall Map (laminated) • MPRRMEX • $99.00

Conductor Certification • BKCONDC • $10.00

The Railroad—What it is, What it does • BKRRNN • $42.95

1997 Car and Locomotive Cyclopedia • BKCLC97 • $99.00 Dispatching Elements of Train Dispatching, Vol. I • by Thomas White • BKETD1 • $44.95 Elements of Train Dispatching, Vol. II • by Thomas White • BKETD2 • $41.95 Introduction to North American Railway Signaling • BKINARS • $50.00

Railroads of the Continental United States Wall Map (laminated) • MPWML07 • $39.95 Training Videos (DVD) Daily Locomotive Inspection (DVD format) • DVLOCO • $225.00 Blue Signal Protection (DVD format) • DVBLUE • $195.00 Railroad Hearing Conservation Training (DVD format) • DVHEAR • $149.00

Shipping Rates: Add the following shipping and handling if your merchandise subtotal is: UP TO $10.00 10.01 - 25.00 25.01 - 50.00 50.01 - 75.00 75.01 -100.00 100.01 - 150.00 150.01 - 200.00

Add Add Add Add Add Add Add

$4.10 7.20 9.80 10.90 13.00 14.80 17.30

200.01 - 300.00 Add 21.00 300.01 - 400.00 Add 24.70 400.01 - 500.00 Add 28.50 500.01 - 600.00 Add 32.50 600.01 - 700.00 Add 36.50 700.01 & up (Appropriate charges applied)

To order, call

1-800-228-9670 or visit

www.transalert.com Simmons-Boardman Books, Inc. The Railway Educational Bureau 1809 Capitol Ave. Omaha, NE 68102 Fax: (402)346-1783 email: orders@transalert.com


Ad Index Company

Phone #

a&K Railroad Materials 800-453-8812 andersons inc., The 419-891-6386 aReMa 301-459-3200 atlas Copoco 803-817-7479 auto Truck 816-412-2131 CiT 212-461-5713 CK industries 847-550-1856 Collins engineers, inc. 312-236-5817 Danella Rental Systems, inc. 610-828-6200 David J. Joseph Co., The 513-419-6200 electro-Motive 800-255-5355 ellwood Crankshaft & Machine 724-347-0250 First Union leasing Corp. 847-384-5392 Flagship Rail SVCS, llC 312-559-4801 FreightCar america 312-928-0850 Helm Financial Corp. 415-398-4510 ext 1610 Herzog Railroad Services, inc. 816-233-9002 Holland Co. 708-672-2300 ext.382 HyTROC 201-512-9500 infinity Rail llC 678-904-6306 l.B. Foster Co - Friction 412-928-3506 lORaM 763-478-6014 lTK engineering Services 215-641-8826 Miller Felpax 612-865-9382 New york air Brake 607-257-7000 Progress Rail Services (FCM) 256-505-6485 R&w Machine Division 708-458-4200 Rail Solutions 703-922-3800 RailComm, inc. 585-377-3360 Railquip, inc. 770-458-4157 Railroad Financial Corp. 312-222-1383 Rails Co. 973-763-4320 Railworks 866-905-7245 Railway educational Bureau, The 402-346-4300 Sealeze Unit Of Jason 804-275-1675 ext.235 Siemens industry, inc. 800-SieMeNS STV, inc. 212-777-4400 VgT Rail 618-343-0600

Fax

Email address

801-972-2041 419-891-2749 301-459-8077 803-817-7440 816-412-2191 212-461-5694 847-550-1854 312-704-9320 610-828-2260 513-419-6221 708-387-6626 724-347-0254 847-318-7588 312-559-4842 312-928-0890 415-398-4816 816-233-7757 708-672-0119 201-512-9615 908-904-4908 412-928-3512 763-478-2221 215-542-7676 507-452-2463 607-257-2389 256-840-2651 708-458-3299 703-922-8229 585-377-3341 770-458-5365 312-222-1470 973-763-2585 952-469-1926 402-346-1783

cescobedo@akrailroad.com chuck_brown@andersonsinc.com marketing@arema.org paul.humphreys@us.atlas.copco.com eschoenfeld@autotruck.com abby.cohn@cit.com rmeyers@ckrail.net eboehien@collinsengr.com pbarents@danella.com txs@djj.com genuineparts@emdiesels.com ecgsales@elwd.com richard.seymour@wachovia.com kelli.kaul@flagshiprail.com ewhalen@freightcar.net bwind@hlmx.com tfrancis@hrsi.com gpodgorski@hollandco.com btapp@hytorc.com lsmith@infinityfunds.com glippard@lbfosterco.com sales@loram.com tfurmaniak@ltk.com davefisher@millerfelpax.com paula@onlinesms.com bcox@progressrail.com jwarner@rwmachine.com railsol@aol.com sales@railcomm.com sales@railquip.com tkruglinski@railfin.com rails@railsco.com jrhansen@railworks.com bbrundige@sb-reb.com smaclaughlin@sealeze.com www.usa.siemens.com.transportation info@stvinc.com jwhite@sircrail.com

212-529-5237 618-343-9015

Page # 5 DB8 42 24 16 DB9 38 36 36 DB16 C3 13 DB15 DB10 7 DB15 31 15 15 DB15 28 9 16 13 3 DB8 33 DB6 C2 27 DB2 11 32 41,44 11 C4 18,19 38

The advertisers index is an editorial feature maintained for the convenience of readers. it is not part of the advertiser contract and Railway age assumes no responsibility for the correctness.

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 345 Hudson St., 12th Floor New york, Ny 10014 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com

AL, AR, IN, KY, LA, MI, MS, OH, OK, TN, TX emily Kalmus 20 South Clark Street, Suite 2450 Chicago, il 60603 (312) 683-5021 ekalmus@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, WV, CANADA – QuEbEC AND EAST, ONTARIO Mark Connolly 345 Hudson St., 12th Floor New york, Ny 10014 (212) 620-7260 Fax: (212) 633-1863 mconnolly@sbpub.com

AK, AZ, CA, CO, IA, ID, IL, KS, MN, MO, MT, NE, NM, ND, NV, OR, SD, uT, WA, WI, WY, CANADA – Ab, bC, Mb, SK Heather Disabato 20 South Clark Street, Suite 2450 Chicago, il 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com

GLObAL ADVERTISEMENT SALES, EXCEPT ITALY, ITALIAN-SPEAKING SWITZERLAND, JAPAN, AND NORTH AMERICA Donna edwards advertisement Manager Suite K5 & K6 The Priory, Syresham gardens Haywards Heath, RH16 3lB United Kingdom +44-1444-416368 Fax: +44-1444-458185 de@railjournal.com.uk

AuSTRALIA, CZECH REPubLIC, HONG KONG, INDIA, KOREA, MIDDLE EAST, NETHERLANDS, NEW ZEALAND, RuSSIA, SCANDINAVIA, SOuTH AFRICA, SOuTH AMERICA, SPAIN, WORLDWIDE RECRuITMENT Steve Barnes international area Sales Manager Suite K5 & K6 The Priory, Syresham gardens Haywards Heath, RH16 3lB, UK +44-1444-416368 Fax: +44-1444-458185 sales@railjournal.co.uk 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 info@mediapointsrl.it

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 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Craig wilson 345 Hudson St., 12th Floor New york, Ny 10014 (212) 620-7211 Fax: (212) 633-1325 cwilson@sbpub.com

October 2012 Railway age 45


pRoducts & seRvices Reidler Decal Corporation St. Clair, PA 17970 Fax: 570-429-1528 marketing@reidlerdecal.com The Federal Railroad Administration's proposed new delineator configuration

Reidler can help you comply with the FRA ruling by offering prismatic reflective yellow delineators that meet their specifications. • 4" x 150 fl Rolls (kiss-cut available) • 400 candlepower retroreflection • Application instructions provided

pRoFessioNal diRectoRY

Give us a call at 800-628-7770 for more information The Leader in Railroad Markings since 1926

Rail-seRved Real estate

HOUSTON AREA LAND FOR SALE

Kansas City (913) 661-2424

www.rrtemps.com

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

Railroad Arbitration

Joseph Anthofer 30+ Years Railroad Legal Experience American Arbitration Association Roster of Neutral Arbitrators jdanthofer@aol.com 402.572.8368

For advertising information call Classified Sales Representative

Craig Wilson •

phone

(212) 620-7211

• fax (212) 633-1325 e-mail 46 Railway age

cwilson@sbpub.com

October 2012

(ROSENBERG, TEXAS) • 216 ACRES, KANSAS CITY SOUTHERN & HWY 59 FRONTAGE • 214 ACRES, UNION PACIFIC & HWY 90A FRONTAGE Call for Other Rail-served Properties Contact FRANKLIN DENSON, Broker, at 713-334-1114 fmdenson@yahoo.com F.M. DENSON & Co

RecRuitMeNt

EDNA A. RICE, EXECUTIVE RECRUITER, INC (713) 667-0406 FAX (713) 667-1651 Web address: www.ednarice.com Email: resume@ednarice.com

EDNA A. RICE, President 6750 West Loop South Suite 735 Bellaire, Texas 77401-4111

tRaiNiNG

Part 243 Training & Certification Part 242 Conductor Training Part 240 Engineer Training and re-certification -------------------------------------------------------Modoc Railroad Academy 916-965-5515 info@modocrail.com


equipMeNt sale/leasiNG

Available For Lease

◆ 4,200 cu. ft. Gondolas - Interior bracing removed and tub bottoms reinforced for C&D, coke, scrap, aggregates, etc. ◆ 3,600 cu. ft. Open Top Hoppers. 45 degree slopes for aggregate or coke service, etc. ◆ 3,915 cu. ft. Pressure Differential (PD) Covered Hopper Cars. For additional information and pricing, please contact John Goodwin phone (605) 582-8318 fax (605) 582-8304 www.carmathinc.com e-mail jgoodwin@mwrail.com

ATTENTION CONTRACTORS, ENGINEERS, AND AGENTS Wanted to buy – all railroad scrap you have. Wanted: car bodies for 150- and 300-ton railroad cranes. Also heavy lifting and hauling of large loads over the road. 24 hrs emergency repound unit. Environmental clean up train wrecks, construction-demolition-HAZMAT chemical cleanup. Railroad car cut-up. Also, engines cut too. Bridges torn down and replaced with new structures. No job too big or small. USA Kentock Group Ltd, contact Jerry Stanton for quote or email jerrystanton95@gmail.com. Fax or call: phone 215-285-2930, 267-997-8133, fax 215-864-9665. Contact us for all your railroad needs. eMploYMeNt

Manager, Parts Sales Opportunity A leading manufacturer of freight rail equipment, has an immediate opening for the position of Parts Sales Manager in its sales department located in Chicago, Il. The primary function of this position is to lead, plan, and execute direct marketing and sales activities for the railcar parts business in agreement with the approved business plan. The Parts Sales Manager will also be responsible for monitoring market activity, maintaining existing and developing new customer relationships, and completing annual sales plans and long-term forecasts accordingly. Effective written and oral communication skills as well as the ability to develop realistic, appropriate solutions to problems are a must. The ideal candidate should possess a bachelor’s degree or an equivalent of five or more years of sales experience in the rail industry or similar manufacturing industry. Extensive overnight travel and willingness to work outside of normal business hours as necessary is required. Please submit resume to railgroup@sbpub.com. Plant Manager

Notices

Legal Notice The Connecticut Department of Transportation anticipates the need for consultant services to perform various transportation related activities during the 2013 calendar year. Consulting firms having a desire to provide such services must be prequalified by the Department. A listing of categories of services for prequalification and the format for submittals can be obtained by visiting the Department’s internet web site: http://www.ct.gov/dot/cwp/view.asp?a=1527&q=500732 through the Annual Consultant Prequalification link or by contacting the Consultant Selection Office at (860) 594-3017. Submittals must be sent in by the November 15, 2012 due date or postmarked by the due date and received within 14 days. Connecticut Department of Transportation An EO/AA/ADA Employer

Greenbrier Rail Services (GRS) has an opening for a Plant Manager at our Wheel Shop in Hershey, NE. The Plant Manager is responsible for leading a team of supervisors and monitoring, directing and coordinating operations at the wheel shop to ensure optimum efficiency and economy of operation. Responsibilities include, but are not limited to: • Managing and overseeing overall plant operations including pro duction, materials and QA • Overseeing and ensuring work meets FRA and AAR regulation requirements and quality standards • Responsible for procurement and inventory control of materials. • Ensure safety practices of the employees and the environment of the facility are followed • Plan, assign and direct work, appraise performance and leadership of GRS operation at the location • Supervise staff at the location in accordance with the organization’s policies and applicable laws Qualified candidates will have a minimum of a Bachelor’s degree in Business or related field, 10+ years minimum experience in operations and manufacturing preferred and 5+ years successful management experience with well-developed interpersonal and communication skills. GRS offers a comprehensive benefits package. Please send resume and cover letter including wage requirements to darci.spence@gbrx.com. No phone calls please. EOE. October 2012 Railway age 47


Perspective Stephen hOlt

Why high speed rail is an absolute bargain

H

igh speed rail is a hot topic at the moment, and a range of factors means it has never been more relevant to the U.S. The whole world seems to have switched on to the tremendous benefits of HSR, as we saw at the UIC High Speed conference in Philadelphia this July. But why now, almost half a century after the Shinkansen launched a revolution in scheduled passenger services? This is something we at Invensys Rail wanted to understand, so we commissioned an independent study to see what the global trends were. The results make fascinating reading, particularly in the U.S., where aviation enjoys a nearmonopoly on long-distance travel in many areas. For almost all journeys between 100 and 500 miles, HSR or HrSR (higherspeed rail) will offer a faster journey time than road, conventional rail, or air. If you’re closer to the railroad station than the airport you can stretch the upper distance further. Speed is obviously the headline benefit, but once you’ve cut journey times for passengers a galaxy of benefits follow. First, as air travelers shift to rail, shorthaul flights can be discontinued, freeing valuable runway slots at airports for very-long-distance flights, for which air remains a faster option. Second, busy highways become less congested, cutting road accidents and emissions. Third, because travel between cities is made faster and easier, trade between and beyond them becomes more efficient, benefiting economies along the route. Small businesses become more competitive; larger ones more efficient. Bear in mind that these aren’t theoretical benefits. All have been seen on HSR networks before. As the factors behind them are understood better, we’re

48

Railway age

October 2012

increasingly seeing routes planned to optimize them. The stars do seem to be aligning. Road congestion is making that mode increasingly unattractive, while long check-in times and security queues at airports are rapidly eroding the speed benefits of aircraft. Add to that the tremendous environmental benefits HSR offers over road and air and the fact that electricity can be generated using indigenous energy sources and reduce our dependence on imported fuel, and you have a prospect that is very difficult to argue against.

The tracks will be standard gauge; the trains will be electric. But the possibilities are so varied that there simply isn’t a onesize-fits-all solution. Technical factors have made high speed rail a much more attractive proposition than before. Positive Train Control has its critics, but it offers all the capability a modern signaling system will require for HSR needs, especially HrSR. It’s going to become increasingly prevalent on railroads across North America. While the Japanese and Europeans had to invest fortunes in creating a signaling system that could cope with the very high speeds of their new trains, in the U.S., that development cost is being shared across a broad spectrum of rail transportation,

with the goal of providing interoperability on conventional railroads. There are, inevitably, caveats to this virtuous circle. First is the question of funding. With so many of HSR’s benefits accruing off the right-of-way, should taxpayers on a route part-fund it? In Japan, the preference is for private funding; in Europe for state funding—yet our research suggests that, for the most financially sustainable high speed railroads, the costs and benefits have been shared between the state and the private sector. Is there the will to pull that off such private-public cooperation in the U.S.? There is also the issue of planning. A high speed railroad cannot exist in isolation. Questions of modal links, urban zoning to maximize regeneration, and access to city centers all need answering early on in order to avoid ithe sort of convoluted planning processes that have blighted so many rail projects all over the world. None of these are easy to get right. About the only certain things are that the tracks will be standard gauge and that the trains will be electric. The options and possibilities are so varied that there simply isn’t a one-size-fits-all solution. Even so, our research confirms that, while 40 years ago a high speed railroad was considered an expensive luxury with limited competitive potential against air, things have changed markedly. One thing we can all agree on now is that intercity rail travel hasn’t been more relevant to the world since the before air travel. It may seem expensive to some, but by comparison with the alternatives of expanded road and aviation capacity, well planned high speed rail looks like an absolute bargain. Stephen Holt is Global Marketing Director at Invensys Rail.


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Oct 2012 Railway Age Magazine  

Oct 2012 Railway Age Magazine

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