Destination:Freedom Newsletter
The Newsletter of the National Corridors Initiative, Inc.
Vol. 4 No. 31, August 4, 2003
Copyright © 2003, NCI, Inc.
President and CEO - Jim RePass
Publisher - James Furlong
Editor - Leo King

A weekly North American rail and transit update


Crossing Hells Gate Bridge, NYC

NCI: Leo King

Old catenary is a continuing major problem, says Amtrak’s CEO David Gunn, as are two elderly movable bridges in Connecticut. The story is below.


Bush Amtrak plan ‘DOA’ in Senate

By Wes Vernon
Washington Bureau Chief

The Bush administration last week submitted to Congress its long awaited legislation to split Amtrak into three parts in a way that the USDOT said would “reform” the current intercity passenger service, but which critics said would in fact end passenger trains in America.

“Bonds and other indebtedness incurred under the authority of this subsection shall under no circumstances be backed by the full faith and credit of the United States.” Two days later, four Republican senators defiantly introduced legislation to fund Amtrak under CEO David Gunn’s model to get the railroad back into shape after years of deferred maintenance. Sen. Trent Lott (R-Miss.) called the Bush plan a “non-starter,” and he was joined by Sens. Kay Bailey Hutchison (R-Tex.), Conrad Burns (R-Mont.) and Olympia Snowe (R-Me.) with alternative legislation that would go in the exact opposite direction from that proscribed by the White House.
In a letter to the Amtrak Board of Directors, Gunn said in effect that the DOT plan is hopelessly convoluted and unworkable. He likened it to the “privatization” plan in Britain that came to a crashing halt in recent years.

In essence, he told the Board members, “you will be responsible for the operation, safety, and reliability of a company whose assets are deteriorating, and whose organization is in turmoil.” He pointedly noted that neither he nor anyone else at Amtrak had been briefed or consulted regarding the formation of the plan.

Most of the news media reports on the administration plan appeared to accept as established fact that the “money-losing long distance trains” are the main cause of Amtrak’s woes, even though Amtrak supporters have again and again presented thoroughly documented evidence to the contrary. All the passenger trains are unprofitable, and the long-distance runs eat up no more than 15 to 20 percent of the railroad’s budget.

“The successor corporations are not a department, agency, or instrumentality of the United States Government nor are they Government corporations (as defined in section 103 of Title 5).” The first of the three new entities envisioned by DOT would be a private rail passenger company operating trains under contract to states and multi-state compacts–just as the current Amtrak operates trains under contract to commuter agencies.

There would be also a private company to maintain and operate infrastructure on the Northeast Corridor under a contract to a multi-state NEC Compact. The feds would hold title to the tracks and stations and lease them to the compact.

The National Passenger Rail Corp. would continue with the Amtrak brand name and retain Amtrak’s current right to use the tracks of the freight railroads outside the NEC, as it does now, except that under the new arrangement “Amtrak” would have the right to contract out the use of the property to other entities, be they state controlled or privately operated.

The idea of keeping the “Amtrak” name may be an attempt to finese obections of the Class 1 carriers which have steadfastly opposed getting involved with multiple new entities operating intercity passenger trains on their property. The Association of American Railroads (AAR), the voice of the freight carriers, issued a general statement vowing to work with all concerned to maintain good freight and passenger service. Ed Hamberger, AAR President, was out of town on vacation. Some observers believe a paper “Amtrak” is unlikely to satisfy the Class I railroads as long as many other entities would still in fact be allowed to use their property.

“The purposes of this Act are to preserve an intercity passenger rail service system in the United States that is driven by sound economics; provide a transition from the existing structure for providing such service to a structure that is more aligned with existing and emerging transportation needs; develop a system that provides high quality passenger rail service at a reasonable cost; establish a long-term partnership among the states and the federal government to support intercity passenger rail service; and create an effective public-private partnership, after a reasonable transition, to manage the capital assets of the Northeast Corridor.” The alternative bill put into the hopper by the four GOP senators would provide Amtrak with $12 billion in operating expenses over 6 years, establish a national passenger rail system from Amtrak’s current routes, and create an independent non-profit Rail Infrastructure Finance Corp. (RIFCO) to underwrite $48 billion in government-backed tax credit bonds and administer a trust fund to pay the bonds over twenty years.

The senators would also create a rail office at DOT that would be responsible for recommending capital projects by RIFCO.

Lastly, but obviously not least, the GOP Senate bill would provide a framework for a settlement between freights and Amtrak with the condition that freights accepting federal funds for improvements must “allow Amtrak to meet its schedule.” I.E., no putting Amtrak trains on a siding for an inordinate amount of time to give freights priority.
That latter provision could conceivably reignite the debate within the Class I board rooms over whether to accept federal government money at all. One faction is willing to make some allowance for it, but another faction firmly believes that federal mandates follow federal money. Forcing the freights to “allow Amtrak to meet its schedule” could bolster the arguments of the skeptics within the industry. Freight traffic is their bread and butter, after all.

USDOT Secretary Norman Mineta pointed to successful compacts for intercity train operations in California, Illinois, and Oregon-Washington., and suggested this was not that much different from what he was proposing – but those are short to medium distance lines. Trying to force such a compact on the long distance schedules would be impossible, argues the National Association of Railroad Passengers (NARP).

Norman Mineta

“Operation of Amtrak’s long-distance trains is a federal responsibility which financially beleaguered states are not going to pick up and which – if they tried – would be the subject of endless debates over proper scheduling and cost-sharing,” says NARP’s Ross Capon.

To illustrate: The Chicago-Seattle Empire Builder runs through Illinois, Wisconsin, Minnesota, North Dakota, Montana, Idaho, and Washington. Try to imagine the legislatures of those seven states coming to an agreement as to who pays for what and how much. A train that runs for three days stops in some towns and cities during convenient hours Some of the stops along the way have to tolerate the 3:00 a.m. arrivals and departures. The political battles, as Capon said, would be endless.”

A similar situation exists with Illinois, Iowa, Nebraska, Colorado, Utah, Nevada, and California trying to reach a consensus on scheduling and paying for the California Zephyr.

“Board of Directors – The Transition Board of Directors of Amtrak shall consist of 11 voting members, including the Secretary of Transportation, or an officer… designated by the Secretary; and 10 other members appointed by the President, by and with the advice and consent of the Senate. The President of Amtrak shall serve as an ex officio, nonvoting member of the Board of Directors.” That is a prime example of what has prompted such diverse voices as rail labor’s Sonny Hall and Senator Hutchison to say the Administration bill is, for all intents and purposes, a blueprint for the death of intercity rail passenger service in the United States.

Lott pronounced the DOT bill “DOA.” Forget it, it’s not real world, he believes.

As an example of such impracticality, Amtrak’s David Gunn told his board of directors, “It is not clear who would advocate for the ongoing funds necessary to run service and the costs for the creation of all these new entities. All of this occurs with $50,000 voluntary severance available to existing Amtrak employees.”

Perhaps with the Lott-Hutchison-Burns-Snowe bill in mind, the Amtrak boss noted that “This is only one of what will be several legislative proposals concerning the future of Amtrak and rail passenger service.”

There is a political dimension to all this that few – aside from D:F – have mentioned. Many of the small towns served by the much-reviled long distance trains are in the “red states” on the 2000 election night map. Those are the precincts of Middle America that made George W. Bush President of the United States. How will they react to having their (in many cases) one and only train taken away from them?

Burns said the Empire Builder is part of Montana’s history and economy, “and something we need to work to keep in top shape, and this [the GOP senators’] bill will help do just that.” And the Montanan added he would “continue to work to make sure the rail option is maintained and improved for use all over the country.”

“All over the country” is Burns-speak for what Lott has often said in more blunt language: “No national system, no Northeast Corridor.”

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Niantic River Bridge - NAN

NCI: Leo King

Niantic River Movable Bridge (called “Nan” on Amtrak), at milepost 116.7 and Thames River Draw at MP 124.2, both between New Haven, Conn., and Boston, are in danger of failing and cannot be repaired any more, says Amtrak CEO David Gunn. The King Bridge Co. of Cleveland built the bridge in 1907. In pre-electrification days, F-40PHs hauled the high-steppers between the two cities.


Gunn says fix wires, bridges, first

Amtrak President David L. Gunn was not happy with how the Bush Administration’s plans for Amtrak came about. Nobody asked Amtrak officials for their ideas.

He told reporters on July 28, “Amtrak wasn’t asked to work on developing the plan and hasn’t been consulted or briefed on it. Consequently, we’ll withhold commenting until such time as we are briefed.”

Thames River Bridge

NCI: Leo King

Amtrak’s Thames River Bridge, at right, is more than one-quarter mile long over the approaches, and spans the river between New London and Groton, on the far shore. It was installed ca. 1914. At left is the Interstate 95 bridge.


Gunn added, “That said, we expect the administration to continue a responsible course of action supporting Amtrak’s present operations, capital projects and improved efficiency and service. At the same time, Amtrak will continue its critical mission and responsibility to serve our passengers and run the railroad.”

He said the railroad will need every dollar it has asked for to make improvements.

“While federal policymakers and others debate the structure and funding of passenger rail service, Amtrak will continue to do its job. That’s why we will continue to put every effort into securing the $1.8 billion in federal support needed next year to fund the capital projects that are needed right now to run safely and reliably.”

Among his top priorities is catenary between Washington and New Rochelle, N.Y., where Amtrak tracks join Metro-North for about 56 miles to New Haven, Conn.

“The importance of spending money on capital projects immediately cannot be overstated. Two weeks ago, aging catenary wires fell apart in New York. This one incident resulted in a 24-hour service disruption between New York and Boston.”

Bridge Plate

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He also stated two electric engines were recently destroyed.

“Years of deferred maintenance also resulted in the loss of two AEM-7 electric engines. While we are aggressively rebuilding our AEM-7s, they are failing almost as fast as they can be rebuilt.”

There are five movable bridges between New Haven and Mystic, Conn., two of which are nearly beyond repair.

“Two movable bridges in Connecticut dating from the early 1900s – the Thames River and the Niantic River bridges – are in danger of failing, and if they do, it will stop service between New Haven and Boston until they are fixed or replaced.”

Gunn said fixing the railroad should be the No. 1 priority.

“The gravity of this immediate need to maintain Amtrak’s operational reliability vastly overshadows any debate over the plan introduced today. As a practical matter, the Bush administration, which is represented on Amtrak’s board of directors, has averted crisis over the past 12 months, even when this approach has taken us to the 11th hour. Acting in the best interest of millions of rail passengers in the short term while the long-term policy debate evolves is a goal to which all parties – the Administration, Congress and Amtrak – should adhere.”

The smallest double track movable bridge in CT

NCI: Leo King

“Nan” is the smallest of the double-track movable bridges in Connecticut, yet it remains massive in its bulk.

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Northeast CSX trackwork to delay Amtrak

August trackwork affecting Amtrak’s Lake Shore Limited Boston section, trains 448 and 449, operating between Boston and Albany, will be affected by CSX trackwork east of Albany. Their connecting trains, 48 and 49 to and from Chicago will also be indirectly affected.

Nos. 448 from Chicago will terminate in Albany August 4 and 5, 18-21, 25-28 and September 2. Buses will operate from Albany to Boston making all station stops.

No. 449 will be buses Boston-Albany August 4,5, 18-21, 25-28, and September. Passengers will board No. 49 at Albany.

On September 2 only, No. 56, the Vermonter, will operate as a bus from Springfield to Brattleboro and St. Albans. No. 55 will be a bus from St. Albans to Springfield. A train will operate between Springfield and Washington for Nos. 55 and 56.

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Former Amtrak conductors plead guilty

A former Amtrak conductor pleaded guilty Thursday to stealing $41,000 in cash ticket sales from passengers, officials said.

Dennis Hartley, 44, pleaded guilty to one count of theft of more than $5,000 from Amtrak. On Wednesday, two former assistant conductors, Keith Latimer, 39 and Michael Greene, 25, each pleaded guilty to the same charge.

Prosecutors said the trio failed to remit cash receipts obtained from passenger ticket sales and used the money for personal expenses.

Latimer admitted to stealing $16,000 and Greene $13,000.

Passengers are allowed to pay the conductor or assistant conductor cash for their tickets when they board a train. Despite receiving notification of internal audits in 2001 of several employees at the Albany-Rensselaer station, the men failed to pay back the full amount.

Hartley was later fired from his job and Latimer and Greene resigned.

The men will be sentenced in November.

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SAFETY LINES...  Safety lines...

Canadian locomotives:

Install data recorders, board says

The Transportation Safety Board of Canada (TSB) says locomotive data recorders should be required on all engines.

The board issued its final investigation report on July 29 after a Via Rail Canada passed a stop signal on No. 52 on January 19, 1999.

The board has recommended that Canada’s Transport department, in conjunction with the railway industry, “establish comprehensive national standards for locomotive data recorders that include a requirement for an on-board cab voice recording interfaced with on-board communications systems.”

On the day of the incident, at approximately 8:30 a.m. EST No. 52 “passed signal No. 2328S at Mile 232.8 of the Canadian National Kingston Subdivision at the Trenton Junction Station while it was indicating “Stop.” The train subsequently passed through a main track switch and came to a full stop at Mile 232.17.”

The TSB found that the crewmembers “did not react promptly to the stop indication at signal 2328S. Given that the train was operating at close to the maximum allowable speed (100 mph), they could not have stopped even if they had observed and reacted when the signal came into view.”

The board noted that conversations being conducted with a trainee on VIA 52 at that time may have distracted the regular crew members, thus increasing the risk of omission of the check for the indication displayed by signal 2352S.

The federal agency also found that “Signal systems are not upgraded to the same level of safety as those required by the most recently recommended design principles.”

New signal system design principles are not implemented retroactively in Canada unless there is a specific problem or when risks are deemed to be high, the board stated.

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COMMUTER LINES...  Commuter lines...

Romney still mulls Greenbush line

As Massachusetts Gov. Mitt Romney contemplates abandoning the Greenbush commuter rail project, the MBTA’s general manager says the agency has already spent $85 million on the train line – about 20 percent of the total cost.

The largest part of that money, about $27 million, has been paid out to the contractor who has already designed most of the project and broken ground on a bridge, Massachusetts Bay Transportation Authority officials said. Another $23 million went to land acquisitions, and the rest went to preliminary engineering, obtaining permits, insurance, and trains, the officials said.

The financial revelation comes as the Conservation Law Foundation is threatening legal action if Romney scuttles the project, which was part of a broad court settlement that paved the way for the Big Dig in 1990, a pact the foundation brokered, according to the July 24 Boston Globe.

“When it comes to Greenbush, we’ve crossed the Rubicon, so to speak,” said MBTA general manager Michael H. Mulhern. He added that halting Greenbush at this stage would force the state to pay additional legal costs that would drive the project’s bills higher still – all without delivering a rail line.

“I don’t ever remember stopping a large project in its construction phase, and I’ve been here 24 years,” Mulhern said.

On several recent occasions, including a fortnight ago, Romney has said that the state has “no capital” for Greenbush or other potential expansions of the commuter rail network, such as an extension to Fall River and New Bedford.

Douglas I. Foy, Romney’s development and transportation chief, insisted that the governor has yet to make a final decision on the fate of the $470 million rail line, which would stretch 18 miles from Braintree to Scituate. The Romney administration has been reviewing all major transportation project plans, Foy said, and Greenbush is among them.

Unlike many such plans, the Greenbush line was one of several projects the state signed a legal agreement to build, as a way to offset increases in automobile traffic brought on by the new Central Artery.

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Pasadena line jammed on first day

Whether it was the first-day novelty, pent-up anticipation or just the free ride, swarms of people jammed aboard Metro Gold Line trains in Pasadena on July 26 for the grand opening of the Los Angeles-to-Pasadena light-rail line.

By 9:00 a.m., it was standing-room-only aboard the trains, which travel between Sierra Madre Villa Avenue in East Pasadena and Union Station in downtown Los Angeles, wrote the Pasadena Star News. The route is 13.7 miles and on a normal day will take 36 minutes to go from one end to the other.

Saturday wasn’t a normal day.

“Push on in, darlin’. Push on in,’ a Metropolitan Transportation Authority security guard urged a rider boarding a mid-morning train at the Del Mar Station. The brisk passenger loading and unloading times around which the Gold Line schedule is built went by the wayside that first day, as drivers had to linger at each stop much longer because of the crowds.

A few miles east, lines snaked inside the multilevel Sierra Madre Villa parking garage, across the attached pedestrian bridge over a freeway, and onto the station platform in the freeway median.

The wait to get on a southbound train heading back to Los Angeles averaged two hours most of the day, Los Angeles County sheriff’s deputies said. It was a scene repeated at Union Station for those waiting to board a northbound train to Pasadena.

The stops in between weren’t much better, because already-full trains would pull into a station with many wanting to get on, but few willing to get off.

“Starting at 8:30 a.m., we had to force them off the train,’ said Tom Jasmin, an MTA manager in charge of the Sierra Madre Villa Station. In all, MTA officials estimated that 70,000 to 80,000 people rode the trains on Day One.

The long-delayed $859 million project joins a light-rail network that includes the Metro Red Line subway, the Metro Green Line, and Metro Blue Line to Long Beach.

The MTA put 22 of its 26 Gold Line trains into service, said MTA spokesman Ed Scannell.

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Commuter rail idea could derail buses

Milwaukee officials are quietly discussing whether they can use $91.5 million now reserved for a Milwaukee electric bus system to help pay for extending Chicago’s Metra commuter trains to Racine, Milwaukee and the southern suburbs.

The Milwaukee Journal Sentinel reported on July 25 such a move would simultaneously deliver a major boost to the $152 million commuter rail plan and a crippling blow to the $300 million Milwaukee Connector proposal to link Milwaukee’s downtown and nearby neighborhoods with public transit, business leaders and public officials say.

No decisions have been reached, and a summit on the issue has been postponed until fall, said Racine County Executive William McReynolds and aides to Milwaukee Mayor John O. Norquist and Milwaukee County Executive Scott Walker.

Any attempt to shift the money would require agreement between the city and Milwaukee County, and probably the state and federal governments, as well.

Under a plan developed by a Southeastern Wisconsin Regional Planning Commission study committee, the Metra line would extend north from Kenosha to stations at the Town of Somers, Racine, the Town of Caledonia, Oak Creek, South Milwaukee, Cudahy and downtown Milwaukee. Trains would run seven round trips each weekday and three on weekends and holidays.

Because the trip from downtown Milwaukee to downtown Chicago would take almost 2-_ hours, planners say, commuter rail isn’t intended to compete with Amtrak’s Hiawatha line, which covers the same distance in 90 minutes. Instead, the Metra line would be used for city-to-suburb and suburb-to-suburb trips, serving stops that Amtrak zips past.

The behind-the-scenes discussions are troubling enough to Alderman Mike D’Amato that he plans to ask the Milwaukee Common Council to take a stand against the fund shift.

“The future of the city of Milwaukee depends on new and improved mass transit,” said D’Amato, whose east side constituents are seeking relief from their neighborhood’s parking and traffic woes.

However, the $91.5 million pot of federal transportation money has been sitting idle for 12 years, and with no agreement in sight on electric buses, local officials have grown increasingly fearful that Congress might take back the cash, said Steve Jacquart, Norquist’s chief of staff.

“I’m hoping this is a lot of discussion about nothing,” Jacquart said.

Norquist’s first preference is to use the money for the electric bus system, Jacquart said, but Walker is a longtime opponent of light rail and has shown no enthusiasm for the guided electric bus system that has replaced light rail as the connector study’s leading option. As a result, the connector study has been stalled.

Chicagoland has a new 30-year transportation plan, but it’s already drawing heat.

The 2030 Regional Transportation Plan, open to public comment before final adoption this fall, outlines how $61 billion expected through 2030 from federal, state and local sources will be spent.

The Chicago Area Transportation Study, the metropolitan planning agency for northeastern Illinois, presented its plans on July 25, reports the Chicago Tribune.

Naysayers criticized the plans as tilting in favor of fixing and expanding highways and leaving little money for improving mass transit. It also provides a general time frame in which 45 major capital projects will be undertaken.

Major projects include adding lanes to highways and toll roads to improve traffic flow, and expanding the commuter-rail network operated by the Chicago Transit Authority and Metra.

Officials said they could not provide a breakdown of how the $61 billion would be directed to road, transit and other projects, leading critics to say the plan errs on the side of highway funding.

Of the $61 billion, the plan calls for spending $47 billion to maintain the system, which are predominantly roadways. About $9 billion will be available for major capital projects to expand highway and commuter-rail systems, and $5 billion remains for freight, arterial, bus, bicycle and pedestrian facilities.

“This plan does not in any way respond to the public’s resounding demand for more transit and walkable communities,” said Janice Metzger, co-director of transportation issues at the Center for Neighborhood Technology.

“It’s a business-as-usual plan that is much more responsive to paving contractors who make big contributions.”

In addition to CTA, Metra and highway projects, elements of the plan address investment in bus rapid-transit technology and building new travel corridors in Chicago and the suburbs.

Part of the plans would add lanes on Interstate Highways 80 and 94 to the Indiana state line. Transit projects such as the CTA’s Circle Line, a rail circulator that would provide better connections for commuters on “L” lines and Metra trains, could create opportunities to transport hundreds of thousands of commuters during peak travel periods.

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Via Rail plan stalls at station

Via Rail Inc.’s plans for a high-speed train link between Quebec City and Windsor remain stalled in the station after the Canadian cabinet declined to deal with the issue at a meeting last week.

The $3 billion proposal may come back again at the Cabinet’s next meeting in August, but observers say with the government hurtling towards the transition to a new Prime Minister, the time for green-lighting major new projects may be past.

“There’s no money. I would think it’s dead until the Martin transition,” said one senior source.

A combination of SARS, mad cow disease, an economic downturn that has sapped government revenue and Air Canada’s woes have increased the demands on the treasury and decreased the project’s chances of getting approval, sources said.

David Collenette, the Transport Minister, remains confident he could get approval, said Amy Butcher, his spokeswoman.

“Decisions are ongoing. He’s confident a decision will be made,” she said. “Nothing has changed,” she said.

Bombardier’s Jet Train, which it says is capable of running on current train tracks, is a key part of the proposal.

David Slack, spokesman for Bombardier Transportation, said, “We think high-speed is important to the country’s future and we hope the government will continue to consider it.”

The aviation industry has been lobbying against the initiative, saying it would send a stark signal to potential investors in bankrupt Air Canada if the government began subsidizing a competitor on its prime money-making route.

“We’re pleased it at least appears the government has decided not to intervene in the marketplace,” said Cliff Mackay, president of the Air Transport Assn. of Canada.

The project is also likely not to have many fans at the cabinet table. Mr. Collenette is a strong partisan for Jean Chrétien, the outgoing Prime Minister, even though he recently declared he supports Paul Martin as the next leader.

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FREIGHT LINES...  Freight lines...

BSNF passes by

For NCI: Chris Starnes

BNSF is a far-flung system. Far removed from California, a Burlington Northern & Santa Fe train passes through Norfolk Southern's Central Division, Appalachia District, in Baum Hollow, Va. in November 2002.


Ranchers, railroaders find solutions
for big at-grade crossing problems

By Alan Kandel
Special to Destination:Freedom

For more than ten years, California fig grower Chris Abshire has been relentless in his battle to permanently close the one railroad crossing that he must traverse each and every time he enters or leaves his ranch. Compounding the situation is that Abshire’s tenant, Gene Blocker, as well as all of Blocker’s workers, also use the crossing daily. If the state department of transportation, the involved railroad and Abshire can all agree, an on-property private road will be constructed allowing unrestricted access to a crossing with fully automatic signals situated on a paved Madera County, Calif., road.

When completed, the place at which Abshire and the others will cross the tracks will not only be safer for Abshire and his entourage, but safer also for train patrons, on-board staff, and the locomotive crews aboard the 12 Amtrak trains (by 2003) and the approximately 30 freight trains that use those tracks daily.

Busy Stockton Sub

The BNSF Ry. line is the section that runs from Barstow in the Southern California desert to Richmond in the San Francisco Bay Area. Both places mentioned in the article are on the Stockton Subdivision. Under Atchison, Topeka & Santa Fe Ry. control, it was known as their Valley Division.

A 1985 division timetable explains the subdivision from Barstow to Mojave as the Mojave Sub. From Mojave to Bakersfield, BNSF trains run on trackage rights over the Union Pacific, which, incidentally, covers the territory over the Tehachapi Mountains.

From Bakersfield to Calwa (just south of Fresno) is the Bakersfield Sub on the BNSF (“First Sub” in Santa Fe days). From Calwa to Richmond is the Stockton Sub on today’s BNSF (Second Sub in Santa Fe days).

BNSF’s mainline from Bakersfield to Richmond is used by BNSF trains, (UP has trackage rights from Stockton to Pittsburg, which is west of Stockton), and Amtrak’s San Joaquin trains destined to and from the Bay Area, run on the BNSF between Bakersfield and Pittsburg-Antioch, and use UP’s Mococo line between there and Oakland.

In Madera and in Stanislaus counties, the places mentioned in the article (both south of Stockton and north of Calwa), Amtrak also uses those line segments as well.

Chris Abshire isn’t alone – he is joined by multitudes nationwide advocating improvements at both farm and non-farm railroad crossings.

Just up the railroad to the north in Stanislaus County, two separate incidents took the lives of two workers at Nate Esformes’ Triple-E Produce. Both were struck and killed by trains where the former crossing and an active rail line cut through the property. As part of a state demonstration project involving the California Department of Transportation (Caltrans), the Burlington Northern & Santa Fe Ry. (BNSF), and Triple-E Produce, an underpass was constructed carrying BNSF trains over the roadway that Triple-E Produce employees use to get from their tomato-sprouting hothouse to the 3,000 acre field where the sprouts are planted.

At $790,000, the brunt of the expense was borne by Caltrans with $100,000 of that figure provided by Triple-E Produce. Through this spirit of cooperation, a project of this magnitude comes to fruition and provides remedies for both parties.

Unlike the Triple-E Produce arrangement, Abshire’s battle was ongoing, but eventually was resolved after a tragedy.

In a tragic twist, Abshire’s father was struck and killed by a passenger train at their Ave. 20_ crossing in Madera County nearly 10 years ago. Thinking back to the days just before that unfortunate incident, Abshire said they tried to improve visibility up and down the railroad right-of-way from the crossing where Abshire’s father perished.

The rural roads that run east-west in Madera County in a lot of cases are numbered, and these numbered avenues (as it were) are preceded by the word “Avenue.” So, “Avenue 20-and-one-half” (20_) falls midway between Avenue 20 and Avenue 21.

“We repeatedly tried to get the railroad to move the [standing] freight cars farther away from the crossing,” he said, but it was to no avail. Abshire recalls that only hours before the accident on the day his father was killed, his father said, “Someone’s going to get killed at that crossing.”

For Abshire, this “unnecessary tragedy,” literally and figuratively hit way too close to home. Had the right parties come together years ago and worked toward a resolution, Abshire is convinced the accident could have been avoided.

The one – and only – access road to and from the Abshire ranch crosses not only what used to be part of the Santa Fe Railway’s mainline, but two other tracks adjacent to it as well. For its part, BNSF, combined in 1995 from a merger of the Burlington Northern and Atchison, Topeka & Santa Fe Railroads, has continually been engaged in an active crossing closure campaign.

With 21,200 public crossings and 12,600 private and pedestrian crossings dotting its 33,500-mile network of tracks covering 28 states and two Canadian provinces, BNSF has its work cut out for itself.

According to the railroad, 635 system-wide highway railroad grade crossings, both public and private, were closed or contracted to close during 2000. Similarly, an ambitious crossing closure goal was set for 2001.

“One of the best ways to minimize the risk is to reduce the number of at-grade crossings,” said Carl Ice, a BNSF corporate executive.

“Our grade crossing safety and public project employees work closely with state agencies, communities and landowners to ensure we identify the best candidates for closure,” according to BNSF Today, an online employee magazine.

According to FRA data and Operation Lifesaver, an international non-profit group for railway safety, each year in the U.S. there are approximately 3,500 motor vehicle vs. train crashes, resulting in approximately 1,200 injuries – many of which are life-threatening – and 400 fatalities. Accordingly, a train and vehicle collide on average once every 110 minutes, or an unlucky 13 times a day. While the trend overall nationally is improving, evidenced by a dramatic decline in the number of incidents at crossings over the last 20 years, this isn’t true in California.

For the third straight year, the Golden State has been ranked tenth highest in terms of the number of train and motor vehicle crashes.

The California Public Utilities Commission (CPUC) figures for 1999, the Golden State experienced 185 vehicle vs. train collisions at its 12,775 public and private railroad crossings. Of those, 29 occurred at private crossings, resulting in five fatalities and eight injuries, while 156 took place at public road and railroad intersections.

That was on a par with the nine-year average from 1991 to 1999 of 182 statewide incidents, 27 of which occurred at private crossings and the remainder occurred at crossings designated “public.”

While the nation overall continues to experience lower numbers of incidents, injuries and fatalities, railroad crossing incidents and casualty statistics in California remain relatively flat, but the casualty figures associated with “miscellaneous crossing accidents,” are the most disturbing. Those figures included collisions between trains and bicycles, farm tractors, or various types of farm equipment. According to the CPUC, the miscellaneous crossing accidents excluded crossing accidents involving trucks, buses or automobiles. The figures indicate that crashes involving bicycles, farm tractors and various types of typical farm equipment are three times more likely to end in a fatality than a collision with trucks, buses or automobiles.

After approximately 10 years of bandied negotiations, an arrangement was finally at hand for Abshire and all of the others concerned with using the crossing on his property. The ultimate plan was to build a lineside road which would tie into a county road, thereby providing Abshire access to a crossing that has the full compliment of warning lights, gates and bells, all in the interest of safety.

“As we look for closure candidates, we want to ensure that communities and landowners have effective routes to cross the tracks, while we also reduce potential exposure to risk,” said Lynn Hartley, BNSF’s director of field engineering and design.

“In the coming years, BNSF employees will continue to work with the state agencies, communities and landowners along our line to find ways to enhance safety.”

The third player in this drama is Caltrans, was a key participant in the demonstration project involving Triple-E Produce and BNSF near Stockton. The proposed closing of Abshire’s crossing at Ave. 20 _, along with the proposed frontage road construction, had an estimated price tag of $80,000, nearly all of which was be borne by the state agency.

For Chris Abshire – who doesn’t want the same thing that happened to his father happening to anyone else – having all parties cooperate and come to unanimous agreement in the process was a godsend.

Reprinted by permission of Grape Grower and Nut Grower magazines.

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What’s the answer in avoiding collisions?

The ultimate answer to avoiding collisions between trains and vehicles at crossings is to eliminate the points of intersection where the different modes of transportation meet.

Realistically, the amount of time, money and mechanized and physical labor needed to eliminate approximately 260,000 crossings nationwide is more than monumental. In spite of these obstacles, nearly 3,000 railroad crossings per year are upgraded. Upgrades consist of road and crossing closures, installing grade-separated structures such as overheads and underpasses, and the incorporation of lights, gates and bells where perhaps only limited signage such as a “crossbuck” or “stop” sign may have existed previously.

Until all of the necessary and needed provisions are put in place to eliminate the possibility of trains and farm equipment from ever colliding, here are some effective interim measures that should be employed to avoid disaster at crossings, especially when driving across railroad tracks:

Always take care to cross crossings cautiously. A tongue-twister no doubt, but an important admonition, nonetheless.

Have a heightened awareness at all times.

Be on the lookout for trains or other rail-borne equipment at any time, day or night, rain or shine.

Be mindful of the fact that a particular train, which may have ordinarily been expected to appear at a designated time, may be running late, causing the train to show up at a moment when it is least expected.

Employ listening as well as using your eyes when crossing railroad tracks. The sound of moving trains may be all that’s available in conditions where fog or other factors, such as vegetation or buildings, may restrict visibility up and down tracks.

Always look out for a second or perhaps third train operating on adjacent tracks. Look for the presence of two or more tracks at any crossing.

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CP dispatchers remain on strike

A six-week strike by some 220 Canadian rail traffic controllers (RTCs) – dispatchers – continued after the Rail Canada Traffic Controllers (RCTC) union members rejected a tentative agreement in a ratification vote on July 22.

CP said it operated “normal train service” since the labor dispute began on June 18 and “will continue to do so as long as the strike continues.”

Management RTCs took over the duties of striking workers

Management said its last contract offer would have provided wage and benefit improvements to RTCs, but no talks are currently scheduled.

The striking employees are based in Calgary, Winnipeg and Montreal. U.S. employees are not affected by the strike.

No word from union officers.

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CP Boxcar in bright red color

Canadian Pacific Ry., two photos: Rick Robinson

There is no mistaking Canadian Pacific’s bright red newsprint boxcars. The 68-foot, 3-inch high-cube critters are 17 feet high and 10 feet, 8-inches wide. The inside length is 62 feet and 9-feet, 7-inches wide. The side doors are 10-feet, 6-inches wide and 12-feet, 9-inches high. Their inside height measures 13-feet, 1 inch.


Newspaper pressrooms like new boxcars

Canadian Pacific Ry.’s new fleet of 625 high-capacity boxcars for paper rolls is setting new performance standards in the industry. Newsprint makers and printers alike say they are impressed with the car’s capacity to deliver large volumes of paper in damage-free condition, establishing a direct link between the railcar and pressroom quality and production.

The cars, with 25 per cent more capacity, were built to meet tough new performance specifications developed by CP after extensive consultation with shippers and receivers, the carrier stated in a press release.

They are the first boxcars designed specifically to handle newsprint and other rolled paper, and are the first modern-day paper cars built with damage-free handling and high load capacity as the main objectives.

With their higher capacity, CP has been able to eliminate 800 older paper-carrying boxcars from its fleet and replace them with the 625 new cars, a net reduction of 175, without losing any capacity.

“We have built a car that has the features shippers and receivers said are most important to them,” Jim Buggs, CPR’s General Manager, Car Management, said.

CP High and wide doors on boxcars

The high and wide doorways are essential for “towmotors” to load newsprint into CP newest newsprint boxcars.


The new boxcars have a payload capacity in excess of 200,000 pounds. While other railcars have similar capacity, their design characteristics limit the number of rolls they can carry. They are full before reaching their weight limit and usually carry no more than about 165,000 lbs. CP’s new car eliminates that wasted capacity and is the only car on the market that can load 50-inch newsprint rolls to the car’s full payload capacity.

Reliable service and damage-free delivery are among the biggest issues in the paper industry. Damaged rolls can upset inventory balance and delay press production.

Rex Potts, Newsprint Manager for The Washington Post Co., said he needs 195,000 tons of newsprint a year to print The Washington Post. It’s printed on eight presses, each 166 feet long and more than five stories high.

“We’re getting 82 50-inch rolls per car,” Potts said, adding, “The more usable rolls we get per car, the fewer shipments we need.”

He said paper breaks on their presses are at an all-time low, demonstrating a direct link between the rail equipment and pressroom productivity.

“What we’re seeing in paper roll quality off the new cars is unsurpassed and what we’re seeing on the press is proof of it. There’s no mistake when we’re seeing the same results from paper supplied by three different mills operated by three different companies and shipped in CP’s new cars.”

The Cleveland Plain Dealer’s presses run at 62,000 copies per hour using the 50-inch rolls. A newsprint roll that has even a small flat spot or is out of round by as little as one-eighth of an inch can cause press problems.

Carl Orzech, the Plain Dealer’s Manager Newsprint Receiving, said, “Our presses are fast. If we have to pull a roll off, it means lost press time. We have not had a rail-related pressroom problem since making the switch to CP’s big boxcars, nor have we seen a load shift.”

Bowater’s Thunder Bay mill provided valuable shipper advice during the car’s development and participated in inspections as the first cars were being built. The mill, which supplies the Cleveland Plain Dealer and the Minneapolis Star-Tribune with 50-inch newsprint rolls, loaded the first prototype car more than a year ago. Bowater’s Thunder Bay mill experimented with loading and unloading patterns to help hone the car’s features and develop best practices and procedures for moving product in and out of the cars quickly and safely. The mill was also actively involved in trial shipments.

Darrell Watts, Superintendent for finishing, shipping and warehousing, said, “We were involved from start to end. Today, I’m getting 100 tons (of 50-inch rolls) in a car now versus 60 tons before.”

CP’s new boxcars have more than two feet of additional inside height and more than one foot of additional inside length than standard paper boxcars. Their low center of gravity allows for the extra height without sacrificing ride stability. With the extra space, loaders can triple-stack 50-inch paper rolls, which have emerged as the printing industry standard, and add another row.

Among the car’s damage-prevention features is longer end-of-car cushioning – a deeper shock absorber located behind the couplers. Improved wheel assembly design minimizes lateral and vertical forces during transit to prevent damage. Skylights provide greater visibility for safer loading and unloading.

CP also worked with airbag manufacturers to design a superior bag that, as it is inflated, moves the rolls into a secure position and keeps them stable during transit. The bag was built to restrain the heaviest of paper rolls.

Since introducing the cars, CP’s Buggs said the railroad has seen a reduction in lading damage claims. Their bigger load capacity, combined with the improved car speeds CP is achieving between rail terminals through scheduled operations, is making a contribution to improved asset utilization.

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Rail freight traffic off slightly

Total freight traffic on the nation’s railroads was down slightly during the week ended July 26 in comparison with the corresponding week last year, the Association of American Railroads (AAR) reported Thursday.

Total volume was estimated at 28.8 billion ton-miles, down 1.4 percent from last year. Carload freight totaled 328,910 units, down 2.6 percent from last year, with loadings up 0.3 percent in the East but down 4.9 percent in the West. Intermodal volume, which is not included in the carload data, totaled 197,145 trailers or containers, up 3.3 percent from the comparable week last year.

Twelve out of 19 commodity groups reported declines in carload volume compared to last year, with motor vehicles and equipment dropping 13.5 percent; metallic ores falling 13.1 percent; and coal off 3.7 percent. Among commodities showing increases from last year were coke, up 43.1 percent, and stone, clay and glass products, which rose 4.2 percent.

The AAR also reported the following cumulative totals for U.S. railroads during the first 30 weeks of 2003: 9,616,825 carloads, down 0.1 percent from last year; intermodal volume of 5,574,943 trailers or containers, up 6.1 percent; and total volume of an estimated 847.8 billion ton-miles, up 0.7 percent from last year’s first 30 weeks.

Railroads reporting to 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. Railroads provide more than 40 percent of the nation’s intercity freight transportation, more than any other mode, and rail traffic figures are regarded as an important economic indicator.

Both intermodal and carload freight were up on Canadian railroads during the week ended July 26. Intermodal traffic totaled 43,433 trailers and containers, up 9.5 percent from last year. Carload volume of 61,202 cars, was up 4.1 percent from the comparable week last year.

Cumulative originations for the first 30 weeks of 2003 on the Canadian railroads totaled 1,835,661 carloads, down 1.2 percent from last year, and 1,236,180 trailers and containers, up 9.3 percent from last year.

Combined cumulative volume for the first 30 weeks of 2003 on 15 reporting U.S. and Canadian railroads totaled 11,452,486 carloads, down 0.2 percent from last year and 6,811,123 trailers and containers, up 6.7 percent from last year.

The AAR also reported that originated carload freight on the Mexican railroad Transportacion Ferroviaria Mexicana (TFM) during the week ended July 26 totaled 8,324 cars, up 1.4 percent from last year. TFM reported intermodal volume of 3,289 originated trailers or containers, down 7.9 percent from the 30th week of 2002. For the first 30 weeks of 2003, TFM reported cumulative originated volume of 256,735 cars, up 1.7 percent from last year, and 105,994 trailers or containers, up 28.5 percent.

AAR is online at

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QUARTERLY AND ANNUAL REPORTS...  Quarterly and annual reports...


Canadian Pacific Ry. Ltd. (TSX/NYSE: CP) reported that net income declined to $29 million (Canadian), or $0.18 a diluted share, in the second quarter, ended June 30, from $169 million, or $1.06 a share, in the like year-earlier period.

The railroad said the decline reflected in part a $150 million charge, announced in June, related to a program to eliminate 820 jobs by end-2005, as well as write-downs to fair market value of under-performing assets, and restructuring of the company’s northeastern U.S. network.

CPR’s board declared a quarterly dividend of $0.1275 a common share, unchanged from the preceding quarter, payable on October 27 to shareholders of record as of September 26.

Revenues from freight rose to $875 million in the second quarter from $873 million a year earlier.

CPR said second quarter operating income, excluding the special charge, was $191 million, down from $219 million a year earlier. The decline reflected in part higher fuel prices and the net result of a higher Canadian dollar, which reduced U.S. dollar-denominated expenses by $31 million but also cut U.S. dollar-denominated revenues by $40 million.

Operating expenses, excluding the special charge, totaled $723 million in the second quarter, up from $704 million in the second quarter of 2002. Fuel, depreciation and materials costs rose, while equipment rents declined and compensation and benefits expenses remained flat.

Analyzing freight revenues, the company said intermodal freight rose $24 million, or 11 percent, mainly because of new business with major ocean container shipping companies through the Port of Vancouver. Domestic container volumes also rose.

Sulphur and fertilizer revenues were up $6 million, or 6 percent, reflecting an increase in CPR’s market share of export potash and a stronger sulphur market.

A decline in the automotive, forest product and industrial product businesses mostly stemmed from the foreign exchange impact on revenues earned in U.S. dollars.

For the first half of 2003, net income declined to $131 million, or $0.82 a share, from $305 million, or $1.91 a share, in the year-earlier half.

Looking ahead, the company stated, “The anticipated gains in productivity, combined with the Canadian grain industry forecast for the crop to be harvested this year, are expected to mitigate the majority of the effects of sustained high fuel prices and the higher Canadian dollar. Assuming these factors remain relatively stable for the balance of the year, the company’s results should be in line with those of the second half of 2002.”

The Canadian freight carrier added, “CP plans to reduce its workforce by 370 jobs in 2003, by 330 in 2004, and by 120 in 2005.”

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Grupo TFM

Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. and its subsidiaries (TFM) reported its financial results for the second quarter and first six months of 2003 last week, which included an $18.3 million loss.

Consolidated net revenues for the quarter ended June 30 were $176.6 million compared to revenues of $186.3 million for the same period of 2002, which represented a decrease of $9.7 million or 5.2 percent.

Revenues were negatively impacted by lower volume in the automotive segment due to an industry downturn, depreciation of the peso, shorter average length of haul, and fluctuations in the mix of freight.

Those negative effects were partially offset by TFM’s continuing efforts in truck to rail conversion and by the recovery of the Mexican steel industry.

Volume during second quarter 2003 was 3.1 percent higher than in the same period of 2002. Growth was concentrated in cement, metals and minerals and chemical segments.

Its consolidated operating profit for the second quarter of 2003, including $0.5 million from Mexrail operations, was $36.1 million, representing a decrease of $10.7 million from the prior year period.

The operating ratio (operating expenses as a percentage of revenues) for the second quarter of 2003 was 79.6 percent including Mexrail and 77.0 percent without Mexrail.

Consolidated net revenues for the six months ended June 30 were $345.1 million, a decrease of $12.0 million or 3.4 percent from the six months ended June 30, 2002. During the first half of 2003, revenues were impacted approximately $49.1 million by automotive segment revenues more than $20.0 million lower than the same period of 2002, depreciation of the peso by approximately $16.8 million, shorter average length of haul and freight mix with lower rates.

The negative effects were partially offset by improved truck to rail conversion and recovery of the steel industry, the carrier stated, together generating increased volume of 8.9 percent (in segments other than automotive) over the same period of 2002.

Growth was concentrated in cement, metals and minerals and intermodal segments.

Operating profit for the six months ended June 30 was $63.9 million, resulting in an operating ratio of 81.5 percent. The consolidated operating ratio without Mexrail was 79.0 percent.

Operating results were impacted by lower revenues, fuel price variability due to the U.S.-Iraq War (impacting $9.0 million or 3 percent over revenue) and higher insurance and casualty related costs when compared with the same period of 2002, which included an insurance premium recovery.

Net financial expenses incurred in the six months ended June 30 were $55.6 million, including $14.9 million related to a $180.0 million bond issue due 2012. TFM recognized a $2.9 million foreign exchange loss resulting from the depreciation of the Mexican peso relative to the U.S. dollar.

Net loss for the six months ended June 30, 2003, was $18.3 million, including a deferred income tax expense of $18.9 million as a result of the reduction in tax credit values due to the depreciation of the peso and lower future Mexican corporate tax rates.

EBITDA for the first six months of 2003 was $107.4 million.

The firm stated “The non-GAAP or IAS measure is not a measure of operating results, but rather of the company’s ability to service debt. It should not be construed as an alternative to either (i) operating income or (ii) cash flows from operating activities. It is defined as operating income plus depreciation and amortization and is the result of combining TFM’s and Mexrail’s results).”

As of June 30, TFM’s accounts receivable balance had decreased by 4.2 percent to $195.8 million from $204.5 million at December 31, 2002, as a result of the recovery of tax receivables. Accounts payable and accrued expenses were $121.2 million, a decrease of $7.6 million or 5.9 percent from December 31, 2002.

TFM made capital expenditures of $25.3 million during the second quarter of 2003. Gross capital expenditures for the first six months of 2003 were $34.0 million, and as of June 30, had an outstanding debt balance of $966.3 million, $56.8 million lower than as of December 31, 2002.

Debt includes outstanding U.S. commercial paper of $65.0 million, a term loan of $128 million and Senior Notes of $773.5 million.

During the second quarter of 2003, as part of the implementation of NAFTA Rail, TFM sold 5,100 shares, or 51 percent of the total capital stock, of Mexrail to Kansas City Southern Ry. for $32.7 million.

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Grupo TMM

Grupo TMM, S.A. (NYSE: TMM, BMV) owner of the controlling interest in Mexico’s TFM Ry., reported revenues from consolidated operations of $224.6 million for the second quarter of 2003, compared to $239.3 million for the same period of 2002.

The company reported net income of $37.0 million, or approximately 65 cents per share in its second quarter.

TMM president Javier Segovia said, “Sluggish economic activity and peso depreciation of 14.4 percent, compounded by an overall decline of 9.3 percent in automobile sector activity, produced general negative growth in the first six months of 2003 in all product areas, with the exception of TMM Ports and Tex-Mex. Reductions in SG&A continued, and we intend to meet our goal of a $23 million running rate in SG&A. Reduced revenues were reported across all divisions, except Tex-Mex, due to continued unfavorable economic conditions. Devaluation in the peso of 10.7 percent quarter-to-quarter and a significant downturn in the Mexican automobile industry of 11.2 percent in unit production produced the most significant impact on revenues.

Consolidated EBITDA was $62.9 million for the second quarter of 2003, compared to $74.5 million in the second quarter of 2002, impacted by restructuring and personnel reduction costs of $2.2 million.

This non-generally accepted accounting principles measure is not a measure of operating results, but rather of the company’s ability to service debt, the railroad stated, but added, “It should not be construed as an alternative to either operating income or cash flows from operating activities.” It is defined as operating income plus depreciation and amortization, the carrier stated.

Revenues from consolidated operations for the first six months of 2003 were $440.1 million, compared to $463.7 million for the same period of 2002. Consolidated EBITDA was $116.8 million for the first six months of 2003, compared to $137.2 million in the same period of 2002.

The company reported net income of $37.0 million, or approximately 65 cents per share in the second quarter, which includes $60.8 million from the sale of its 51 percent interest in TMM Ports and Terminals to SSA Mexico, net of expenses and taxes.

Year-to-date net income was $9.1 million, exceeding the prior year’s period by approximately $1.1 million, or two cents per share.

In the company’s Specialized Maritime division, offshore business segment revenues decreased in the second quarter due mainly to a reduction of chartered vessels in the spot market. In July, the division added four vessels. In the second quarter, car carrier volumes decreased dramatically in the Caribbean and Pacific services.

The company decided to withdraw from those operations at the end of second quarter, focusing instead on integrated land services in Mexico.

TMM’s Logistics division revenues decreased in the second quarter compared to the same period of 2002, due to peso devaluation and a slowdown of the automobile industry in Mexico. However, operating profit and operating margin increased due to reduction in equipment leasing and maintenance costs, improvement in the cargo freight balance at Nuevo Laredo Cargo from 50 percent in the second quarter of 2002 to 96 percent in the same quarter of 2003, and higher volumes in the RoadRailer® division. This division added 150 RoadRailer units in June and is currently operating 350 units.

Volume for this product category increased by 43.4 percent quarter-over-quarter.

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Genesee & Wyoming Inc. (GWI, GWR) reported July 29 that net income in the second quarter of 2003 was $7.7 million compared with net income of $7.4 million in the second quarter of 2002.

GWI’s diluted earnings per share in the second quarter of 2003 increased 2.1 percent to $0.43 with 17.8 million shares outstanding compared with diluted earnings per share in the second quarter of 2002 of $0.42 with 17.6 million shares outstanding.

Mortimer B. Fuller III, GWI’s chairman and CEO, said, “Our second quarter results were as expected. In North America, our coal shipments in Illinois were strong despite maintenance work at a major customer, our Utah acquisition continues to perform well, and traffic levels in Mexico were much improved. In Australia, our management team is performing well in a difficult year for grain shipments and the Australian Railroad Group’s safety record has improved significantly.”

In the second quarter of 2003, GWI’s North American revenue increased 20.9 percent to $62.9 million compared with $52.1 million in the second quarter of 2002. Of this $10.9 million increase in revenue, $5.5 million was from the acquisition of Utah Ry. and $1.0 million was from the start-up of a new rail line in Oregon.

Same railroad revenue in the second quarter of 2003 increased $4.4 million, or 8.3 percent, of which approximately $1.0 million was due to the strengthening of the Canadian dollar versus the U.S. dollar. North American operating income increased 29.9 percent to $10.9 million in the second quarter of 2003 compared with $8.4 million in the second quarter of 2002.

GWI’s North American operating ratio improved to 82.7 percent in the second quarter of 2003 compared with 83.9 percent in the second quarter of 2002.

In Australia, second quarter 2003 revenue for GWI’s 50 percent-owned subsidiary, Australian Railroad Group (ARG), increased 8.1 percent to US$59.9 million compared with US$55.4 million in the second quarter of 2002. In comparing the second quarter of 2003 with the second quarter of 2002, it is notable that the Australian dollar appreciated 16.1 percent.

ARG’s operating income in the second quarter of 2003 was US$13.3 million compared with operating income of US$14.3 million in the second quarter of 2002. ARG’s operating ratio in the second quarter of 2003 was 77.7 percent, compared with 74.1 percent in the second quarter of 2002.

Equity income from ARG in the second quarter of 2003 was US$2.1 million compared with US$2.7 million in the second quarter of 2002. Equity income from GWI’s 22.9 percent indirect ownership of a Bolivian railroad, Empresa Ferroviaria Oriental, S.A., was US$0.2 million in the second quarter of 2003 compared with US$0.3 million in the second quarter of 2002.

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Kansas City Southern (NYSE: KSU) reported a net loss of $0.5 million on July 30 for the second quarter of 2003 compared to net income of $14.5 million ($0.23 per diluted share) for the second quarter of 2002.

Results for the second quarter of 2003 were negatively affected by lower earnings from Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM), which reported to KCS, under the equity method, a loss of $2.3 million for the quarter. Grupo TFM’s net income was impacted by deferred tax expense (as calculated under U.S. GAAP) primarily tied to the strengthened Mexican peso versus the U.S. dollar and the impact of lower future Mexican corporate tax rates on Grupo TFM’s deferred tax assets.

(See Grupo TFM report elsewhere in this edition of D:F).

Grupo TFM reported a deferred tax provision of $8.9 million for second quarter 2003 compared with a $33.6 million deferred tax benefit for the comparable 2002 period.

KCS consolidated second-quarter revenues were $146.3 million, a 5 percent increase over second quarter 2002. KCS earnings per share for the quarter ended June 30, 2003, were impacted by the accumulated dividends for the 4.25 percent Redeemable Cumulative Convertible Perpetual Preferred Stock issued last April 29. These preferred dividends reduced earnings per share by two cents.

For the six months ended June 30, consolidated net income was $13.1 million ($0.19 per diluted share) compared with $26.2 million ($0.42 per diluted share) for the six months ended June 30, 2002. This $13.1 million decrease was the result of a $12.1 million decline in equity in net earnings of unconsolidated affiliates, a $10.3 million increase in costs and expenses, and a $6.0 million decline in other income. Partially offsetting these charges was a one-time $8.9 million benefit (net of tax) booked in first quarter 2003 relating to the cumulative effect of a required change in accounting for removal costs of certain track structure assets.

The first six months of 2002 included a $4.4 million gain from the sale of Mexrail, Inc. (Mexrail) to TFM and debt retirement costs of $4.3 million.

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Providence & Worcester Railroad Co. (AMEX: PWX) board members declared a dividend of $.04 per share on its outstanding common stock payable August 21 to shareholders of record on August 7. The board took the action at its at its regular quarterly meeting on July 30.

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RailAmerica, Inc. (NYSE:RRA) reported a net loss of $.33 per diluted share in the second quarter of 2002.

RailAmerica reported its second quarter 2003 net income of $.15 per diluted share on July 31. Increased revenue and improved operating income at the company’s North American operations were offset by a $.07 per share negative impact from lower grain shipments in drought-stricken Australia, which was approximately $.03 per share more than the company had anticipated.

“We are particularly pleased with the performance of our North American rail operations this quarter despite the continuing challenges of higher fuel costs and a tough economy,” said Gary O. Marino, RailAmerica’s chairman, president and CEO.

“In Australia, where agricultural products historically account for approximately 50 percent of our business, we continue to be substantially impacted by reduced grain shipments due to the drought.”

Marino explained, “To partially offset Freight Australia’s concentration in Victorian grain, over the past year we have been successful in diversifying into new geographic regions and commodities with the award of a number of new long-term transportation agreements valued at over $65 million. Additionally, we have taken steps to reduce costs, where feasible, but due to the high fixed cost nature of our rail network, a certain level of expenditure is required to provide continuous service to our customers. The outlook for a grain recovery in 2004 is quite positive as there has recently been much needed rain in the agricultural region served by Freight Australia.”

Marino added, “We believe that the acquisition market in North America is improving significantly and should offer numerous opportunities for RailAmerica over the next few years. Our rail line purchases last month from Class I carriers BNSF and UP illustrate this point. Accretive acquisitions, coupled with an improving business climate, should enable RailAmerica to further improve upon the strong results achieved by our core rail operations.”

During the quarter, the short line conglomerate acquired 288 miles of contiguous rail line in and around Mobile, Ala., from the Burlington Northern & Santa Fe. The second was 154 miles in southeast Colorado from Union Pacific. That transaction resulted in RailAmerica’s 50th railroad.

Consolidated revenue for the second quarter ended June 30 increased slightly to $110.2 million, from $109.8 million in 2002. Operating income for the second quarter of 2003 was $17.0 million, compared to $20.5 million in 2002.

Net income for the 2003 quarter was $4.7 million, or $.15 per diluted share, versus a net loss of $10.7 million, or $.33 per diluted share, including an $18.3 million after-tax charge incurred primarily in connection with the company’s debt refinancing in 2002.

Higher fuel prices resulted in an increased expense of $.03 per share in the quarter, compared to 2002, net of hedge impact.

In North America, strong coal and petroleum carloads, an improved traffic mix and a stronger Canadian dollar led to a $4 million, or 5 percent, increase in revenue and a 2 percent increase in the average rate per car in the second quarter of 2003, versus the same period in 2002. Second quarter 2003 “same railroad” carloads rose 2 percent.

Senior vice-president and CFO Michael J. Howe, noted, “Our long-term focus remains on continuing to improve our debt ratios and enhance our overall capital structure. Driven by the recovery of the Australian and Canadian currencies, shareholders’ equity rose to $337 million at June 30, 2003, from $279 million at year-end 2002, and our book value at June 30 increased to $10.55 per share.”

He said, “Our net debt to capital ratio was reduced to 61 percent this quarter, versus 64 percent at year-end 2002. This ratio is down significantly from a high of 81 percent three years ago and we are on plan to reach our year-end 2004 goal of 50 percent through our previously announced asset rationalization plan. Interest expense decreased $.04 per share in the quarter as a result of our May 2002 refinancing and prevailing lower interest rates.” The North American operating ratio was virtually unchanged at 77.8 percent in the quarter, compared to 77.5 percent in 2002, despite the higher fuel costs. North American fuel prices averaged $1.01 per gallon in the quarter versus $.86 in 2002, net of hedge impact.

In Australia, revenue for the second quarter of 2003 decreased 13 percent, despite the 16 percent increase in the Australian dollar during the 2003 quarter, while carloads were 29 percent lower versus 2002.

The drought in Australia, which has resulted in dramatically reduced grain tonnage, coupled with higher fuel costs, continued to affect Freight Australia’s operating results.

In the second quarter of 2003, Freight Australia had an operating loss of $1.8 million, versus operating income of $4.7 million in 2002. Freight Australia moved just 456,000 tons of grain in the second quarter of 2003, 59 percent less than the 1,124,000 tons moved during the same period in 2002.

The prospects for the 2003-2004 grain harvest are positive as Australian agricultural forecasts project a harvest in the 22 million ton range for the continent, vs. only 9 million tons harvested in drought-impacted 2002-2003. Historically, Freight Australia moves approximately 25 percent of the continent’s grain harvest pursuant to its existing transportation agreements with its customers.

Due to the company’s plan to sell its interest in its Chilean railroad, results of Ferronor are included in discontinued operations. Ferronor’s revenue for the second quarter of 2003 increased 15 percent to $6.4 million, from $5.6 million in 2002, primarily due to its new copper ore and natural gas contracts. The Chilean sales process is continuing as planned and RailAmerica expects to consummate a transaction by year-end.

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STOCKS...  Selected Friday closing quotes...


  Friday One Week
Burlington Northern & Santa Fe(BNI)27.52027.940
Canadian National(CNI)52.10052.020
Canadian Pacific(CP)24.47024.080
Florida East Coast(FLA)28.16028.320
Genessee & Wyoming(GWI)23.390[New Listing]
Kansas City Southern(KSU)12.05012.210
Norfolk Southern(NSC)18.93018.950
Union Pacific(UNP)60.71061.220

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ACROSS THE POND...  Across the pond...

Eurostar offers lower fares

Rail Europe has lower Eurostar prices between London, Paris and Brussels. Rail Europe is the North American distributor of the high-speed Chunnel train.

Taking a cue from airlines, the new Eurostar fares, which went on sale July 29, offer the low fares on a limited number of seats to people who book early and those who travel off-peak Mondays-Thursdays, as well as steeper discounts than offered previously for seniors (60 and over), youth (under 26), children (4-11) and railpass holders.

The lowest fare in standard class is now $90 (U.S.) for a roundtrip Mondays-Thursdays (off-peak).

Once the lowest price seats are sold, the passenger receives the next lowest price; there are multiple tiers, depending on class of service and type of ticket.

For the first time, passengers may exchange tickets bought in North America once they are in Europe.

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OPINION...  Opinion...

Preventing tragedies at crossings

The writer is a former Union Pacific signalman, and was previously a Level II Trainer with the Operation Lifesaver program, and Central Region Co-chair of California Operation Lifesaver, Inc. He is currently working as a freelance writer in Fresno.

By Alan Kandel

In regard to the article “Illinois tops nation in gate failures” (D:F June 23) a question: are signal system activation failures a cause for alarm?

By design, grade crossing warning and control appliances must work reliably each time the equipment is called upon to do so, otherwise, crossing warning devices may lose the respect of the public. In the event of a broken wire or rail, poor track or relay connection, short circuit or component failure, the circuit responds by activating the warning equipment.

Should a train be approaching the crossing, the crossing would continue to be (and I use this term with reservation) “protected.” Such failures can confuse or annoy the public.

These types of failures are known as “false activations.”

On the other hand, there are far more serious types of signal system failures. These are known as “activation failures.” In an activation failure, the warning equipment fails to activate when called upon to do so, and leads one to believe that it is safe to cross the tracks at an active warning device-equipped crossing, when in fact, the opposite is true.

These types of failures are rare, contributing to fewer than one-half-of-one-percent of all collisions at crossings (according to two major signal suppliers in testimony before the Federal Railroad Administration in 1989). Meanwhile in Illinois, Burlington & Northern Santa Fe Ry. has more than 800 active warning device-equipped crossings that dot its lines. BNSF railroad spokesman Steve Forsberg said that “Internal records show that false activations at the crossings averaged 140 per month last year, adding the rate is less than 0.1 percent,” and activation failures, while much less common, at BNSF Illinois crossings averaged one every two months, he said.

Nevertheless, in 2002 there were 94 activation failures in Illinois, Texas had 37 and California 25. Still, senior railroad safety specialist John Blair, at the Illinois Commerce Commission (ICC) said, “the number of activation failures, while relatively few, is disturbing, and we are finding out about it because of the new reporting requirements.”

Meanwhile, investigators said most accidents related to signal-activation failures are caused by human error.

With an apparent rise in reported activation failures as reported in D:F, is there cause for alarm? Not according to Tim Depaepe, research director for the Brotherhood of Railroad Signalmen, the union representing signal workers who said, “As much as I would like to say we are perfect, we are not.”

Depaepe said mistakes are rare and there is no cause for alarm.

“The FRA has definitely put in a lot of effort to try to correct what they see as a trend of activation failures,” Depaepe said, “but I don’t think there is a major trend.”

Thank goodness for remote crossing “health monitoring” or interrogating systems, which have the capability to notify railroad personnel about such malfunctions.

The remote-monitoring devices, which were first installed in Illinois in late 2001, send an electronic message to the railroads when they detect activation failures or problems that can lead to such failures. Perhaps as a result of the number of reported crossing activation failures, this may dictate that more of these remote crossing health monitoring or interrogating systems be installed.

Regardless of failure type, whether they have to be reported to the Federal Railroad Administration or not (activation failures do, false activations do not), corrective measures need to be taken. Regularly maintained and properly functioning automatic warning signal device-equipped crossings are undoubtedly not only safer environments for the motorist, bicyclist and pedestrian who have to cross tracks at these sometimes contentious intersections, but become safer too for train and maintenance-of-way crews operating trains and maintenance-of-way equipment at these locations.

After all, preventing tragedies at crossings, isn’t that really what it’s all about?

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LETTERS...  We get letters...

Dear Editor:

I feel compelled to make this one comment. In your editorial (D:F, August 28), Mr. RePass writes, “Amtrak’s own greatest asset are its long-suffering and dedicated employees, but Smith-recruited David Gunn, and John Robert himself, as well as outgoing Amtrak Vice Chair Michael Dukakis “

Funny, thanks to Mr. Smith we have not had a raise in the five years that he was chairman of the board.

Plus, In October, Amtrak was granted its request for the $1.2 billion-plus – which it received.

I am in contact with union personnel who are directly involved with negotiations, and from what I’m told Amtrak (Mr. Smith) brought a $1,000 signing bonus to the table, of which we have to give $750 back for healthcare.

I guess this is what Mr. Smith considers a good job over the past four years.

As they say at Amtrak, “I should be lucky to have a job”

Keith Kovaleski
Monroe, N.J.

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THE WAY WE WERE...  The way we were...

Test Train  Test Train

NCI: Leo King

In early 1995, Amtrak began running test trains up and down the Northeast Corridor between New Haven, Conn., and Boston as the civil and mechanical engineers started figuring out how well-suited the track was for the coming electrification. This test train, drawn by F-40PH 414, passed over Niantic River Movable Bridge (“Nan,” on the railroad) on its way to New Haven in January of that year. The Corridor Clipper, loaded with instrumentation, brought up the rear. The engineers were checking track levels, curvature, superelevation and a host of other mathematic projects. Catenary is nowhere in sight, yet, and F-40s still ruled the roost.

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End Notes...

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