TRANSPLAN 21;
Conference and rally for rail
June 14, 15 on Capitol Hill
Washington, D.C.

Conference update:

Downey joins speakers’ list
at Transplan 21 June confab

The National Corridors Initiative’s National Conference and Rally for Rail – at Union Station and on Capitol Hill in Washington on June 14-15, has added more speakers, including former USDOT Deputy Secretary Mort Downey, who is now PB Consulting chairman; famed industrial designer Cesar Vergara of Jacobs Engineering; and former Amtrak Reform Council member attorney James Coston.

The keynote speakers are former House Transportation and Infrastructure chairman Jack Quinn (R-N.Y.), who is now the president of Cassidy & Associates, and Former Amtrak chair and Presidential nominee Michael S. Dukakis (D-Mass.).

Leaders from rail industry, labor unions, economic development professionals, city and town planners, designers, preservationists, environmental activists, transportation builders, operators & advocates, government leaders, and financiers will also attend.

Join with us June 14-15 in Washington to launch the national debate on TransPlan21.

A Transportation Plan for the 21st Century is a new American way to plan, fund, develop and build a balanced national transportation system.


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Vol. 6 No. 14
April 4, 2005

Copyright © 2005
NCI Inc., All Rights Reserved

Destination:Freedom
The E-Zine of the National Corridors Initiative, Inc.
President and CEO - Jim RePass
Publisher - Jim RePass      Editor - Leo King
Webmaster - Dennis Kirkpatrick

A weekly North American rail and transit update

For railroad professionals
Political leaders at all levels of government
Journalists from all media

* Now in our Sixth Year *

This page is best viewed at 800 X 600 screen resolution

 

IN THIS EDITION...  In this edition...

  News Items 
NCI Conference update: Downey joins speakers’ list
  at Transplan 21 June confab
‘Negative:’ S&P downgrades Amtrak’s outlook
Northeast Corridor goes all-reserved
NTSB publishes its first transportation safety journal
Solon sees freight as Amtrak’s answer
  Builders’ lines… 
Photo Submission
Amtrak 2006 calendar photo contest
  Commuter lines… 
Panel to review Sound Transit plan today
  APTA Highlights… 
Dorn Announces Possible Changes to New Starts Process
Robert L. Banks Dies; Leading Transportation Consultant
Former Rep. Lehman Dies; ‘A Matchless Supporter’ of Transit
USDOT Seeks Research Proposals from Small Businesses
  Freight lines… 
BNSF creates fuel surcharge based on car mileage
Texas rail official admits he erred
1970 law may be key to D.C. trains ban
UP spends big bucks fixing tracks
Breaux Nominated to CSX Board
  Wall Street Lines… 
KCS finally gets TFM
CN refinances some debt
Greenbriar doubles revenues
P&W has profitable 2004
CN, NS fix interchange rules
Alas, no dividends: Bombardier earns a profit
FCA offers IPO; raises $102 million
  Selected Friday closing quotes… 
Freight traffic mixed in holiday week
  Off the main line… 
Ex-SP steam rides the main again
  End Notes 

Daylight Saving Time began Sunday


AEM7 at Union Station, Washington DC

For NCI: Bob and Janice Pickering

This photo could have been taken yesterday or 19 years ago. Amtrak electric engine AEM-7 No. 915 is at the end of its line in the lower level of Washington Union Station in D.C. way back in June 1986. Last week, S&P downgraded Amtrak’s value as “negative,” just two steps above a “junk” rating.

 

‘Negative:’

S&P downgrades Amtrak’s outlook

Standard & Poor’s revised Amtrak’s debt rating outlook to negative from stable on March 29, citing increased uncertainty about the railroad’s future funding, Reuter’s reported last week.

President Bush’s proposed 2006 budget calls for much lower funding for Amtrak, and USDOT Secretary Norman Mineta has said that Amtrak’s funding should be overhauled. It’s not clear how much support the railroad will have as it goes through the Congressional budget appropriations process, S&P said.

A negative outlook indicates that S&P is more likely to cut the company’s debt ratings over the next 24 months. Debt ratings cuts can raise a company’s borrowing costs. S&P rates Amtrak’s corporate credit at “BBB,” or two steps above junk status.

To bring public attention to Amtrak’s potential bankruptcy, Teamsters distributed fliers to Amtrak passengers in Solana Beach, Calif., on March 30. If Amtrak goes under, thousands of union jobs nationwide would be lost and some communities would suffer a severe economic decline.

“Bush’s ‘reform’ plan for Amtrak will leave the nation stranded,” said John Murphy, Director of the Teamster Rail Conference.

“If Amtrak were to go bankrupt, thousands of rail employees across the country would lose their jobs and small communities that rely on rail transport would be cut off from metropolitan areas.”

The fliers asked passengers to contact their Congressional Representative Randy “Duke” Cunningham to request full funding of Amtrak. Duke is a member of the Appropriations Committee in Congress, which will decide Amtrak’s funding level for 2006. Solana Beach is the Amtrak stop in Cunningham’s district.

Last Wednesday, USDOT Secretary Norman Mineta took his nationwide campaign promoting President Bush’s Amtrak reorganization plan to California’s Bay Area, delivering his message aboard a Caltrain “Baby Bullet.”

He rode the specially scheduled train from Millbrae to San Francisco and back with a crowd of Amtrak officials, reporters and photographers, using the media opportunity to fire back at Sen. Barbara Boxer, who earlier in the day called for his resignation, reported the San Francisco Chronicle.

Boxer, during a San Francisco press conference hours before Mineta’s, criticized the transportation secretary for his support of the Bush administration’s reorganization plan that calls for eliminating federal funding for Amtrak.

“I do wish Norm would consider resigning,” she said. “I don’t understand why someone who has been an advocate for transportation for so many years can do this.”

Boxer promised to help beat back the effort to cut the federal money, arguing that subsidized passenger rail service is a boon to the economy, travelers and the environment.

“To see Norm Mineta change his colors like this is rather sad,” said Boxer, who served with him in Congress.

When reporters informed Mineta of Boxer’s remarks at his press conference at the Caltrain station in San Francisco, he responded: “Oh, good. Does she have any other requests of me?

“I haven’t reversed my position at all. If I wanted to kill Amtrak, I’d do nothing.”

The San Mateo County Times noted Mineta lauded Caltrain’s “baby bullet” express service as a model for the rest of the nation, and his proof that Amtrak reforms will improve rail service.

Mineta made the comments after stepping off a baby bullet train in San Francisco. He made the trip to the Bay Area expressly to ride the train and to continue touting the Bush Administration’s controversial plans for Amtrak.

“We want to have a national intercity rail service that will run with sustainability,” Mineta said. “We want a system that makes good financial sense and good transportation sense.”


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Northeast Corridor goes all-reserved

Amtrak says beginning April 25, it will expand all-reserved service to every regional train on the Northeast Corridor between Boston, New York City, Washington, D.C. and Newport News, Va.

“The new all-reserved service implies that every passenger theoretically ought to have a seat every time they board a regional train,” said marketing boss Barbara Richardson.

While reservations are required, “customers will still be able to purchase tickets for same day travel, as long as the train has not sold out beforehand,” she said.

“With all-reserved service, Amtrak is better able to monitor passenger demand and adjust train capacity accordingly,” the carrier stated in a press release. Since November 2004, weekend regional trains have operated as all-reserved trains.

Customers will still be able to purchase tickets for same day travel, as long as the train has not sold out beforehand.

Richardson, who is Amtrak’s vice-president of marketing and sales, said “The positive customer feedback we’ve received from our weekend passengers since November made the decision to implement the all-reserved status seven-days-a-week a natural next step”

Customers who are currently holding unreserved tickets for weekday regional train travel after April 24 may exchange those tickets for reserved tickets of the same class and fare (peak/off-peak) at no additional charge, Amtrak stated.

A grace period of 15 days, until May 9, will allow passengers holding unreserved regional tickets to travel without a ticket exchange. After May 9, passengers holding unreserved regional tickets must exchange them for reserved tickets.

The change does not affect Keystone or Clocker service trains operating between New York and Philadelphia, Empire Corridor service trains operating between New York and Niagara Falls, N.Y., nor Springfield, Mass.-New Haven, Conn., shuttles.


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NTSB publishes its first
transportation safety journal

The National Transportation Safety Board has published its first issue of the Journal of Accident Investigation.

“It is a biannual publication to promote transportation safety through science, and is affiliated with the NTSB Academy in Ashburn, Va.,” the agency stated in a press release.

The Safety Board’s objective for the journal is to provide the public an exchange of ideas and information developed through NTSB’s accident investigations in all modes of transportation. It will contain published research and technical articles on accident investigations that may be of interest to professionals in safety, accident investigation, engineering and the behavioral sciences.

The Journal will also include short reports of major developments, news, events, research efforts, and announcements of upcoming courses, forums, symposiums and public hearings conducted by NTSB.

In the first issue, the featured articles include “Impact Resistance of Steel from Derailed Tank Cars in Minot, North Dakota” by Frank Zakar of the NTSB.

Other non-rail related articles include “Combating Hardcore Drunk Driving” by Susan Molinari, Chairman of the Century Council and former FRA chair; “Fighting Fatigue” by U.S. Rep. James L. Oberstar (D-Minn.) he is the Ranking Minority member in the House Committee on Transportation and Infrastructure.

Rep. Don Young of Alaska, Chairman, House Committee on Transportation and Infrastructure, wrote an article, “Safety and Security.

Copies of the journal are online at the NTSB’s website. http://www.ntsb.gov/publictn/2005/JRN0501.htm.

Elsewhere at the NTSB, the federal agency said last week its website now provides French language information about the safety board as well as information about the agency’s products and services.

French language information currently on the website includes the history and mission of the board, details about its investigative processes and its family assistance plan for aviation disasters and other details.


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Solon sees freight as Amtrak’s answer

U.S. Rep. Jerry Weller said Amtrak could break from some dependence on federal funds by adding freight cars or operating high-speed lines from Chicago to St. Louis.

“Obviously the potential for higher speed rail service offers a lot of opportunity,” Weller told the Bloomington, Ind. Pantagraph’s editorial board last week.

“If you can greatly reduce the travel time between Chicago and St. Louis, all of a sudden it’s going to be more convenient to take a rail than it is to fly.”

The GOP lawmaker said current law prohibits use of Amtrak trains to haul freight cars, however.

“If they were able to freight up to those cars, they could generate a lot of revenue,” Weller said. “Freight carriers don’t like that idea – they’re doing very well right now.”

Weller said the rail service is important for his district. The House deputy majority whip represents a district that spreads across Bureau, Grundy, Kankakee, LaSalle and Will counties and extends south into Livingston, McLean and Woodford counties.

Weller said Congress has previously attempted to make Amtrak self-sustaining, but the passenger-rail service continues to need state and federal funds.

Weller and 20 other House members sent a letter early this month to Budget Committee Chairman Jim Nussle requesting at least $1.5 billion in support for fiscal 2006.


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BUILDERS LINES...  Builders lines...


Bombardier

Bombardier Transportation said last week it received an order from Greater Toronto Transit Authority (GO Transit) for 10 more bi-level commuter coaches. They’ll cost $21 million, the builder said. The order will add to GO Transit’s existing fleet of 385 Bombardier-built commuter cars.


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Amtrak

Enter the “Picture Our Train“ 2006 Wall Calendar Photo Contest by submitting an original color photo of an Amtrak train (sporting current logo and livery) and your image could appear on next year's wall calendar with photo credit. The First Prize winner will also receive an Amtrak travel voucher.

Starting April 4th, go to www.amtrak.com/photocontest for more information and complete contest rules.


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COMMUTER LINES...  Commuter line...

Panel to review Sound Transit plan today

An independent expert review panel, appointed to provide review of Sound Transit’s Phase 2 Planning for the Regional Transit Long-Range Plan, will meet today and tomorrow in Seattle to discuss the options under study for extending high-capacity transit in the region. Sound Transit said last week the panel’s role “is to pose and assess critical questions, review key methodologies and assumptions in the Sound Transit 2 Plan, and ensure that the assumptions are appropriate and reasonable.”

The panel held its first meeting in February.

The agenda includes papers on Potential Tacoma Link Extension, High Capacity Transit System Development Issues in the South Corridor and several other highway-related issues.

The meeting will take place at the Harbor Steps Conference Center, Seattle, from 8:30 a.m. to 5:00 p.m. both days.

The panel members were selected from across the country to provide expertise spanning key technical areas. These include: project cost estimating, capital finance plan review, ridership forecasting, modal analysis, legal and political architecture of Sound Transit’s legislative charter, environmental impact statement preparation, local design and construction ability, and transit operations and maintenance.


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APTA HIGHLIGHTS...  APTA highlights...

Here are some other transit headlines, from the pages of Passenger Transport, the weekly newspaper of the public transportation industry published by the non-profit American Public Transportation Assn. For more news from Passenger Transport and subscription information, visit the APTA web site at http://www.apta.com/news/pt.


Dorn Announces Possible Changes to New Starts Process

Federal Transit Administrator Jennifer L. Dorn released a “Dear Colleague” letter March 9 advising of an important change in the New Starts rating and evaluation process, and seeking comments by April 1.

According to Dorn, the New Starts change would mean that the FTA would only advance projects with a medium or higher cost-effectiveness rating to the Full Funding Grant Agreement stage, notwithstanding other positive factors. Project sponsors, transit stakeholders, and oversight agencies like the Inspector General and Government Accountability Office suggested making modifications to some of the technical aspects of the project rating system.


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Robert L. Banks Dies; Leading Transportation Consultant

Robert L. Banks, the chief executive of R.L. Banks & Associates, Inc. in Washington who has been called “the dean of rail transportation consultants,” died March 15 in Washington at the age of 87.

In 1956, Banks established his own firm of transportation analysts, planners, economists, and engineers, and headed it until his death. His son, Charles Banks, serves as president of the company.

Banks was a transportation policy advisor and technical counselor to many major, regional, and short line freight railroads; commuter agencies; financial institutions; transit operators; airlines; industry; and government. His firm also carried out engagements for several hundred private corporations, public agencies, 32 states, and several Canadian provincial governments.


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Former Rep. Lehman Dies; ‘A Matchless Supporter’ of Transit

Former U.S. Rep. William Lehman (D-Fla.), 91, a supporter of public transportation legislation during his 20 years in the House of Representatives, died March 16 in Miami Beach. He served in the House from 1973 to 1993, representing the Hialeah and Liberty City suburbs of Miami, and received APTA’s National Distinguished Service Award in 1989.

Lehman had been chairman of the House Transportation Appropriations Subcommittee for 10 years when he announced he would not seek re-election in 1992. He had suffered a stroke the year before.

A 1992 editorial in Passenger Transport called Lehman a “matchless supporter year after year, when it came to appropriating funds for the federal transit aid program.”


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USDOT Seeks Research Proposals from Small Businesses

USDOT is making $3.5 million available in funding for innovative research designed to enhance the safety and efficiency of the U.S. transportation system. Proposals from U.S.-owned businesses of no more than 500 employees are due by May 16.

The Small Business Innovation Research program encourages small business to engage in research and development activities with the potential to produce commercially viable applications as well as meet federal research objectives, according to USDOT.

The program is administered by the Volpe National Transportation Systems Center, a part of USDOT’s newly created Research and Innovative Technology Administration.


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FREIGHT LINES...  Freight lines...


For NCI: Eric Daly

Y’all come on by and take a gander. A Norfolk Southern train pauses at Chamblee, Ga. On March 29 in NS’s Piedmont Division, Greenville District, while No. 132 leaves Chamblee – and a Marta commuter train from Atlanta rushes by, at right. The birds are getting an eyeful, too.

 

BNSF creates fuel surcharge
based on car mileage

BNSF Ry. stated last week it is assessing fuel surcharges on a mileage basis effective next January 1.

The railroad stated, “Its mileage-based fuel surcharge will be the first in the railroad industry, and will replace the freight railroad’s current fuel surcharge, which is assessed as a percentage of a customer’s freight transportation bill.”

“In this era of tight transportation capacity, rapidly rising fuel prices and fuel-price volatility, we believe a mileage-based fuel surcharge program is the most direct and accurate method of reflecting the impact of fuel price changes on BNSF and our valued customers,” said John Lanigan, BNSF’s executive vice-president and chief marketing officer.

The mileage-based fuel surcharge will apply to movements that originate and terminate on BNSF, and to the BNSF portion of Rule 11 shipments, a type of interline shipment where each carrier bills the customer separately for their services. The mileage fuel surcharge also will apply to certain movements involving BNSF and one or more short lines.

These movements account for about 75 percent of BNSF’s volume. The remaining 25 percent represent joint-rate interline movements with other Class I railroads and will continue to be covered by BNSF’s existing percentage fuel surcharge due to current interline billing systems and practices.

The change will require significant modifications to BNSF’s computer systems. Some customers will need to make certain systems modifications to verify mileage-based fuel surcharges. The effective date was set to allow customers and BNSF adequate time to implement and test systems changes.

“We will be working through a number of implementation issues in coming months, but we have heard our customers’ concerns and we recognize their preference for a mileage-based system,” said Lanigan. “Our goal is to implement a straightforward fuel surcharge program that can be administered without disrupting existing agreements and relationships. Many of our customers already participate in mileage-based fuel surcharge programs that the trucking industry initiated in the early 1990s.”

Mileage calculations will be based on the Household Goods Carriers’ (HHG) Mileage Guide (published by Rand McNally) and the surcharge tables will reflect the fuel use intensity of four types of rail movements: coal and taconite; carload and agricultural products; intermodal trailers; and intermodal doublestack containers.

The surcharge tables will be based on the On-Highway Retail Diesel Fuel prices published by the Energy Information Administration of the U.S. Department of Energy.

BNSF is online at http://www.bnsf.com.


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Texas rail official admits he erred

Several months ago, the Texas official overseeing grade crossings commented in court proceedings that many in the rail industry “would consider me their friend.” That may not be surprising given what the official, Darin Kosmak, has done to help railroads fight lawsuits brought by accident victims, according to The New York Times of March 27.

At the behest of the rail industry, on about 100 occasions over the last 11 years, Kosmak signed sworn statements about warning signs at railroad crossings, according to court testimony. The affidavits were mostly drafted by the rail industry, which then used them in case after case as a critical defense against claims that unsafe crossings had caused deaths and serious injury, court records show.

Now, the truth of those affidavits is being called into question.

According to his court testimony, Kosmak recently admitted that his sworn statements misrepresented – unintentionally, he said – what he knew about those crossings. He repeated that admission in an interview last week. His statements are beginning to reverberate in court.

Doubts about Kosmak’s affidavits were cited by a federal judge in late December when he refused to dismiss claims against Union Pacific in the deaths of Juan Enriquez and his wife, Aurelia, at a rail crossing in Camp County, Texas. A year ago, the same judge, before learning of Kosmak’s admissions, cited his affidavit as the main reason for dismissing claims from another fatal crash involving Union Pacific.

Carl V. Crow, a lawyer in Houston who represents the Enriquez family, said Kosmak’s admission could have repercussions for similar lawsuits in Texas, where more than 5,000 people have been killed or injured at grade crossings in the last 20 years. Kosmak acknowledged problems with the affidavits under questioning by Mr. Crow in several legal proceedings.

The affidavits, Mr. Crow said, were “devastating” to accident victims.

“People get killed at their crossings, and they had this guy for 11 years who looked like a guy wearing a white hat out of Austin, just doing his civic duty,” Mr. Crow said.

The rest of the lengthy article may be found at the Times’ website, at http://www.nytimes.com/.


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1970 law may be key to D.C. trains ban

The District of Columbia’s bid to ban rail shipments of chlorine and other toxic gases may hinge on whether the federal government is already doing enough to address the terrorist threat against such shipments, a federal judge said March 23, according to the Global Security Newswire and reported in GovExec.com on March 25.

Presiding over a U.S. District Court hearing on CSX’s request for a preliminary injunction to block implementing the city ordinance, Judge Emmet Sullivan focused on provisions of the 1970 Federal Rail Safety Act that could be construed to allow legislation like Washington’s in cases where the federal government has not addressed the threat in question.

“What drove the city council to this point, I assume, because I’m hearing it again and again, is the perceived inaction of the federal government,” said Sullivan, who said he would deliver a decision on the injunction request by April 8.

The judge opened the hearing by citing January 26 Congressional testimony in which former top presidential antiterrorism adviser Richard Falkenrath said, “toxic-by-inhalation industrial chemicals” are “acutely vulnerable and almost uniquely dangerous.”

“The federal government has made no material reduction in the inherent vulnerability of hazardous chemicals targets inside the U.S.,” Falkenrath said at the hearing. He said the “poorly secured chemicals... in some cases are identical to the chemical weapons used in World War I…” and “present a mass casualty terrorist potential rivaled only by improvised nuclear devices, certain acts of bioterrorism and the collapse of large, occupied buildings.”

Sullivan returned often Wednesday to Falkenrath’s testimony, challenging attorneys for CSX to contradict the analysis by providing evidence of federal protections that could render the city ban invalid. CSX and federal government attorneys described in general terms a confidential security plan developed cooperatively by railroads and the United States, but Sullivan repeatedly proclaimed himself unsatisfied by what he called a “secret” plan that no one in the courtroom appeared to have seen.

“I’m astounded that I’m not getting an answer to what this plan does to address that very dramatic hypothetical situation” of an attack on a hazardous materials tanker in central Washington, Sullivan said. Lawyers for the United States, which is supporting CSX’s request to have the ban overturned, said the plan could be made available to Sullivan but not necessarily to lawyers for the city.

The tank cars at issue pass within blocks of the U.S. Capitol, the National Mall and other key federal sites, and a rupture could result in a toxic cloud that a U.S. Naval Research Laboratory scientist has estimated could claim thousands of lives within minutes. Press reports indicated early this month that a confidential Homeland Security Department report mistakenly posted for a brief time on a Hawaii state Web site makes reference to a chlorine tank explosion as a potential terrorist attack scenario.

Sullivan asked CSX attorney Irvin Nathan why the railroad has not “just made a policy decision that D.C. is uniquely situated and that no hazardous materials are going to be transported through the city.” Nathan replied, “This is not a unique situation. Every major city believes that its citizens are important, and they are.”

Nathan added, “It cannot be up to every city council across the country to make its determination as to whether the federal government is doing enough, and especially enough for it.” Similar laws “have been proposed” in Pittsburgh, Philadelphia and Baltimore, he said, “and their eyes are on this court.”


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UP spends big bucks fixing tracks

Union Pacific railroad said last week it is spending $1.3 billion this year on track improvements across its 33,000-mile system.

Track gangs are removing and installing 4.4 million ties, of which 3.7 million are wood; 355,000 concrete; and 215,000 composite. They will also be spreading 6.8 million tons of ballast to ensure a stable roadbed, replacing 1,055 miles of rail, and surfacing 7,800 miles.

“We continue to invest in our physical plant to assist with providing a safe infrastructure while at the same time enhancing velocity of our train operations,” said Dennis Duffy, executive vice president for operations.

UP said it would also spend another $295 million to increase capacity on its Sunset Route –Where Amtrak’s Sunset Limited operates along with UP freight trains – in Arizona, and in the North Platte, Neb. area. The spending also includes construction of eight new sidings – two each in Texas and Utah and one each in Okla., California, Iowa, and Arizona.

UP is also spending $220 million this year on commercial facilities including yard tracks for a new Toyota plant in San Antonio, intermodal yards in Wilner, Texas and Salt Lake City, and yard tracks at ethanol plants in Iowa and Minnesota.

“Supporting our customers with modern and efficient facilities assists with the fluid operation of the railroad and has always been a strategic element of our capital program,” said Jack Koraleski, executive vice president for marketing and sales.

The investments are part of UP’s total capital budget for 2005, the railroad stated, which includes more than $2 billion in cash capital expenditures that will be used to maintain or enhance its physical plant. In addition, the company plans to acquire 315 new locomotives and over 4,000 freight cars through short or long-term leases.


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Breaux Nominated to CSX Board

Former U.S. Sen. John Breaux of Louisiana has been nominated for election to CSX’s board of directors.

CSX Corp. said on March 30 board members will vote on the nomination at the transportation company’s 2005 annual shareholders meeting on May 4.

Breaux, whose Washington career spans more than 30 years, “is recognized as a bipartisan leader on national issues,” CSX wrote in a press release. First elected to the House in 1972, Breaux served 14 years there, then 18 years in the Senate. Breaux did not stand for re- election in 2004, and retired last January.

Breaux served on the Senate Committee on Commerce, Science and Transportation and on the Finance Committee, and was chairman of the Commerce Committee’s Surface Transportation and Merchant Marine Subcommittee, which has jurisdiction over matters affecting the railroad and merchant marine and navigation industries.

“We believe that John Breaux will be a tremendous asset to CSX and its board of directors. We are excited and honored that he has accepted the nomination to become part of the leadership of our company,” said Michael J. Ward, CSX chairman and CEO.

Breaux is currently senior counsel at Patton Boggs LLP, a prominent Washington, D.C. law firm. He is also senior managing director of the Clinton Group and managing director of Riverstone Holdings.


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WALL STREET LINES...  Wall Street Lines...

KCS finally gets TFM

Transportacion Ferroviaria Mexicana, or TFM, is now Kansas City Southern property. KCS said Tuesday its shareholders okayed the deal to buy the Mexican rail line.

KCS is paying Grupo TMM, TFM’s former owner, $660 million in cash and stock for its 51 percent share. The takeover was completed on April 1.

The vote ends a long series of legal and financial wrangling for TFM, the largest railroad company in Mexico, which KCS plans to fold into its existing system under the new name Nafta Rail.

Shareholders on March 29 approved issuing 18 million shares of common stock in conjunction with the acquisition.


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CN refinances some debt

Canadian National Ry. said on March 29 it refinanced, through an amendment, its U.S. $1 billion revolving credit facility for five-years with an international banking syndicate led by BMO Nesbitt Burns Inc.

The credit facility is available for working capital and general corporate purposes at CN, including backstopping the company’s commercial paper program.

“It contains customary terms and conditions and extends to March 2010 the current credit facility, which was scheduled to expire in December 2005,” according to CN.


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Greenbriar doubles revenues

Freight car builder Greenbrier Cos. (GBX) said on March 30 it increased its orders backlog and doubled revenues in the second quarter – and pushed income to twice the level of a year ago.

The Lake Oswego, Ore.-based railroad industry supplier said second-quarter net income more than doubled to $4.8 million, or 31 cents per share, from $2.2 million, or 15 cents per share, in the second quarter of 2004.

Revenues grew to $255 million from $167 million.

The average analyst estimate from Thomson First Call was for earnings of 29 cents per share and sales of $233.6 million.

Greenbrier delivered 3,100 railcars, up from 2,300 one year earlier. The company also acquired two railcar repair plants from General Electric Co. (GE: news, chart, profile) in the quarter, with GE agreeing to supply a base of work for Greenbrier for 10 years as part of the deal.

The manufacturing backlog in North America and Europe was 12,300 units, with a value of $720 million, compared with 10,000 units valued at $560 million at the end of February 2004.

“We remain on pace to deliver nearly 13,000 railcars in fiscal 2005,” said Treasurer Mark Rittenbaum.

Greenbrier’s tax rate was higher than normal and would have made earnings 34 cents per share, according to Wachovia Securities analyst Wendy Caplan.

“In our view, Greenbrier is a clear winner in the rail supply-end market,” Caplan wrote in a note to clients on March 30, rating the shares to “outperform.”


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P&W has profitable 2004

Providence and Worcester Railroad Co. (PWX) reported on March 28 its net income for 2004 increased to $1.0 million from $668,000 in 2003, and its “diluted income per share increased to $.23 in 2004 from $.15 in 2003,” the New England freight carrier reported.

Other income in 2004 included a gain of $948,000 after the company “disposed of a portion of an inactive branch line acquired by the Commonwealth of Massachusetts by eminent domain.” Included in operating expenses for the year was $95,000 of profit-sharing expense “directly related to this gain.”

Operating revenues for 2004 were $24.9 million, an increase of $982,000 (4.1 percent) from $24.0 million in 2004.

“This increase is attributable to an increase in conventional freight traffic partially offset by a small decrease in container freight traffic,” P&W stated in a press release.

The increase in conventional freight traffic was spread throughout the mix of commodities handled by the railroad with no particular commodity experiencing a disproportionate increase or decrease in volume, the firm stated. Nothing specific was reported regarding its gains in coal movements from the Port of Providence to a power plant in Bow, N.H.

Operating expenses for 2004 included a $425,000 provision for casualty losses, $208,000 of which was to settle a lawsuit judgment against the carrier, P&W reported.


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CN, NS fix interchange rules

Canadian National Ry. and Norfolk Southern Ry. are sprucing up how they interchange traffic.

Both railways described the moves as “A structured routing protocol to streamline their exchange of rail traffic at major gateways.”

The major interchange points for traffic moving between both roads are Rouses Point and Buffalo, N.Y., Detroit, Toledo, Ohio, Chicago, Memphis, New Orleans, and Mobile, Ala.

The routing changes will see traffic between the Louisiana gulf and the Northeast U.S. interchanged directly at New Orleans or Memphis, resulting from “a more direct route and fewer intermediate handlings.”

Also, Western Canada traffic to and from the south-central U.S. will be interchanged at Memphis, avoiding the congestion and additional handling in Chicago. They will expand using a new Rouses Point gateway agreement reported in November 2004 “to further handle traffic between Eastern Canada and the Southeastern U.S.”


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Alas, no dividends:

Bombardier earns a profit

Bombardier earned $800 million less that it did a year ago in its fourth quarter, but came out ahead for the year with a $300 million gain. The transportation builder stated on Thursday, “Consolidated revenues totaled $4.8 billion for the three-month period ended Jan. 31, 2005, compared to $4.9 billion for the same period last year.”

For the year, it earned $15.8 billion compared to $15.5 billion the previous year. The firm said, “These results mainly reflect higher revenues in the transportation segment and lower revenues in the aerospace segment.”

Bombardier stated its “Consolidated earnings (loss) before income taxes (EBT), before special items, were $93 million for the fourth quarter of fiscal year 2005, compared to negative $38 million for the same period last fiscal year. The improvement of $131 million is mainly due to better results in the transportation segment.”

EBT before special items for fiscal year 2005 was $71 million, compared to $311 million last year.

The manufacturing segments’ free cash flow for the fourth quarter of fiscal year 2005 was $704 million, an improvement of $60 million over the corresponding period last year. For fiscal year 2005, free cash flow was $388 million for a $1.1 billion improvement, compared to last fiscal year. The Corporation’s cash position as at January 31, 2005 was $2.4 billion.

Board of Directors agreed there would be no dividend payment on common shares (Class A and Class B shares) for fiscal 2006.

“Despite a very challenging environment, our cash position is solid and we had a good free cash flow performance this year,” said board chairman Laurent Beaudoin, who is also CEO.

Beaudoin added, “The corporation’s foundations are robust: highly skilled employees and great product portfolios. All our efforts will be concentrated on our two main businesses to ensure that they can achieve their full profit potential.”

Bombardier Transportation’s results “continued to improve as the ongoing restructuring initiative progresses on schedule,” he said.

Site closures “are proceeding as planned with three plant closures” in fiscal 2005.

He noted, “Two important product milestones were achieved in the last fiscal year. The first Bombardier TRAXX MS multi-system freight locomotive was delivered to the Swiss Federal Rys., and the first AGC high-capacity regional trainset was delivered to the French National Railways ahead of schedule.” The European Union, Middle East and Asia will see an emphasis on the fast-growing signaling and services segments, the corporation stated in a press release.

The corporation changed its reporting currency to the U.S. dollar on January 1.


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FCA offers IPO; raises $102 million

FreightCar America, Inc. plans to raise $102 million in the only initial public offering on deck this week. Underwriters UBS Securities, Inc. and Jefferies & Co., Inc. are expected to announce the price tomorrow night for its debut on Wednesday, according to IPO tracking firm Dealogic.

Assuming that schedule, the stock would likely begin trading on Wednesday on the Nasdaq under the ticker symbol “RAIL.”

From 1923 to 1991, FreightCar was a unit of Bethlehem Steel Corp. before being sold to Transportation Technologies Industries, Inc.

In 1999, an investor group led by its management bought the company and in December 2004, the firm changed its name from JAC Holdings International, Inc. to FreightCar America.

In 2004, Chicago-based FreightCar America reported revenue of $482 million as a manufacturer of aluminum-bodied railroad cars used to transport coal and other freight, but the company also lost $24.9 million that year. It paid $9.2 million to settle a labor dispute at its Johnstown, Pa., plant, as well as $8.9 million in stock-option compensation expense.

The proceeds of the IPO will go to shareholders Caravelle Investment Fund, John Hancock, FreightCar Chairman Camillo Santomero and Trimaran Investments.


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STOCKS...  Selected Friday closing quotes...

Source: CBSMarketWatch.com

  Friday One Week
Earlier
Burlington Northern & Santa Fe(BNI)53.2855.69
Canadian National (CNI)62.4962.45
Canadian Pacific (CP) 35.8535.41
CSX (CSX)41.8142.73
Florida East Coast (FLA)41.7543.40
Genessee & Wyoming (GWR)25.7226.52
Kansas City Southern (KSU)19.9619.29
Norfolk Southern (NSC)36.7838.02
Providence & Worcester (PWX)13.2715.30
Union Pacific (UNP)68.6668.97


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Freight traffic mixed in holiday week

Carload freight traffic on U.S. railroads was down slightly, while intermodal traffic was up slightly, during the week ended March 26 (Week 12) in comparison with the corresponding week a year ago, the AAR reported Thursday.

Good Friday, which is a holiday on many U.S. freight railroads, is included in the week ended March 26 this year but not in the corresponding week a year ago.

U.S. carload freight totaled 342,187 units in Week 12, down 0.2 percent (630 carloads) from a year ago, with loadings up 0.6 percent in the West and down 1.1 percent in the East.

Intermodal volume for the week totaled 211,228 trailers and containers, up 1.2 percent (2,418 units) from a year ago, with containers up 2.8 percent and trailers down 3.1 percent.

Total volume for the week was estimated at 31.9 billion ton-miles, up 0.6 percent (0.2 billion ton-miles) from 2004.

In the carload segment, coal was up 2.7 percent (3,655 carloads) to 139,629 carloads for the week; coke was up 25.0 percent (1,449 carloads) to 7,254 carloads; and grain was up 5.3 percent (1,205 carloads) to 23,923 carloads. Commodities seeing carload declines for the week included motor vehicles and equipment (down 13.9 percent, or 3,700 carloads, to 22,840 carloads), waste and scrap materials (down 16.5 percent, or 1,893 carloads, to 9,592 carloads), and chemicals (down 3.7 percent, or 1,152 carloads, to 29,808). All told, 10 of the 19-carload commodity groups tracked by the AAR rose for the week.

Cumulative freight volume for the first 12 weeks of 2005 on U.S. railroads totaled 4,052,550 carloads, up 2.6 percent (101,668 carloads) from 2004; 2,576,994 trailers and containers, up 8.5 percent (202,390 units); and total volume of an estimated 376.4 billion ton-miles, up 3.4 percent (12.5 billion ton-miles) from last year.

On Canadian railroads, carload traffic during the week ended March 26 totaled 65,851 cars, down 7.4 percent (5,268 carloads) from last year, while intermodal volume totaled 42,082 trailers and containers, down 1.7 percent (734 units) from last year.

Cumulative originations for the first 12 weeks of 2005 on Canadian railroads totaled 795,200 carloads, up 1.6 percent (12,744 carloads) from last year, and 496,743 trailers and containers, up 6.0 percent (28,025 units) from last year.

Combined cumulative volume for the first 12 weeks of 2005 on 15 reporting U.S. and Canadian railroads totaled 4,847,750 carloads, up 2.4 percent (114,412 carloads) from last year, and 3,073,737 trailers and containers, up 8.1 percent (230,415 units) from last year.

The AAR also reported that originated carload freight on the Mexican railroad Transportación Ferroviaria Mexicana (TFM) during the week ended March 26 totaled 7,101 cars, down 20.4 percent from last year. TFM reported intermodal volume of 2,262 originated trailers and containers, down 39.8 percent from the corresponding week of 2004. For the first 12 weeks of 2005, TFM reported cumulative originated volume of 102,270 cars, up 3.6 percent (3,548 carloads) from last year, and 44,422 trailers and containers, up 6.6 percent (2,749 units).

Railroads reporting to the AAR account for 88 percent of U.S. carload freight and 95 percent of rail intermodal volume. When the U.S. operations of Canadian railroads are included, the figures increase to 95 percent and 100 percent. The Canadian railroads reporting to the AAR account for 90 percent of Canadian rail traffic. Railroads provide more than 40 percent of U.S. intercity freight transportation, more than any other mode, and rail traffic figures are regarded as an important economic indicator.

The AAR is online at www.aar.org.


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OFF THE MAIN LINE...  Off the main line...

Ex So Pac Mikado 745 at KC

For NCI: Gordon Payne

Spectators gather around ex-Southern Pacific Mikado No. 745 shortly after its arrival at the Kansas City Southern yard in Metairie, La. last December 11. Red New Orleans Public Belt 151 had just uncoupled from the Louisiana Steam Train Assn. caboose.

 

Ex-SP steam rides the main again

Recently restored Southern Pacific 2-8-2 steam engine No. 745 returned to home rails this weekend when it began a 900-mile tour around Louisiana and Mississippi. Michael M. Palmieri of The Louisiana Rail Site said, “The first few days will be on the Sunset Route between New Orleans and Lake Charles, La., but most of trip will be on Kansas City Southern.”

The Mikado was recently restored by the Louisiana Steam Train Assn. (LASTA), “and is pulling a four-car train with exhibits on the history of Louisiana,” he added. The train left LASTA’s yard on March 29 for a two-day visit to New Orleans Union Passenger Terminal. It then moved to KCS’s New Orleans yard Friday for final preparations, and the tour began Saturday morning with a trip across the Huey Long Bridge.

The schedule is “made complete” at http://www.lasta.org


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End Notes...

We try to be accurate in the stories we write, but even seasoned pros err occasionally. If you read something you know to be amiss, or if you have a question about a topic, we’d like to hear from you. Please e-mail the crew at leoking@nationalcorridors.org. Please include your name, and the community and state from which you write.

Destination: Freedom is partially funded by the Surdna Foundation, and other contributors.

Journalists and others who wish to receive high quality NCI-originated images that appear in Destination:Freedom may do so at a nominal fee of $10.00 per image. “True color” Joint Photographic Experts Group (JPEG or JPG) images average 1.7MB each. Print publishers can order images in process color (CMYK) or tagged image file format (.tif), and are nearly 6mb each. They will be snail-mailed to your address, or uploaded via file transfer protocol (FTP) to your site. All are 300 dots-per-inch.

In an effort to expand the on-line experience at the National Corridors Initiative web site, we have added a page featuring links to other rail travel sites. We hope to provide links to those cities or states that are working on rail transportation initiatives – state DOTs, legislators, governor’s offices, and transportation professionals – as well as some links for travelers, enthusiasts, and hobbyists.

If you have a favorite rail link, please send the uniform resource locator address (URL) to the webmaster in care of this web site. An e-mail link appears at the bottom of the NCI web site pages to get in touch with D. M. Kirkpatrick, NCI’s webmaster in Boston.


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