Destination:Freedom Newsletter
Destination:Freedom
The Newsletter of the National Corridors Initiative, Inc.
Vol. 2 No. 46, November 19, 2001
Copyright © 2001, NCI, Inc.
James P. RePass, President
Leo King, Editor

A weekly North American Railroad update

Happy Thanksgiving!

Destination: Freedom will be taking a break so its staff can spend the holidays with their loved ones. Our last issue for 2001 will be on December 17, and our first issue for 2002 will be published on January 7. We wish all our readers the merriest of Christmases, a joyous Hanukkah, a terrific new year - and we look forward to seeing you next year!


Coupling cars...

NCI: Leo King

RAIN OR SHINE - Railway conductors perform a variety of tasks, and they don't always wear shiny uniforms. Whether they toil in a freight yard for a freight carrier, or in a passenger car yard, they help to make the moves to and from the stations to the yards. The United Transportation Union leadership has taken a dim view of Amtrak's leadership, which Wes Vernon's story details below.
Amtrak 'liquidation' unlikely;
restructuring could happen
By Wes Vernon
Washington Correspondent

As D:F stressed last week, the talk of Amtrak "liquidating" is overblown. A major rail labor union, meanwhile is joining criticism of Amtrak management, and demanding that heads roll in the company's executive suite.

The prediction that Amtrak will not likely literally go out of business comes from a top official of the Amtrak Reform Council (ARC). That watchdog agency voted Nov. 9 to approve a finding that Amtrak won't reach operational self-sufficiency by late 2002.

On paper, that triggers a legal requirement that Amtrak, within the next 90 days, draw up a plan for "liquidation," but ARC executive director Tom Till says chances of a forced liquidation are small.

"Nobody here seriously believes Amtrak is going to be liquidated, and that's not the intent of our finding," Till said at a Thursday media briefing. "There will be proposals on the table to debate and discuss, and that's what we want."

Amtrak was saying last week that the ARC finding was "the wrong decision at the wrong time." While acknowledging that the timing may or may not be propitious, ARC says it was merely following the law, as laid down by Congress in 1997.

The council's resolution attributes the passenger railroad's failure to perform well to "fundamental institutional flaws, not to Amtrak's directors, managers, or employees."

However, ARC's critique includes wording that goes right to the heart of managerial responsibility. For example, "If Amtrak had been on top of its business plans earlier, it could have implemented contingency plans of corrective actions to offset the delay in the introduction of the Acela Express. It also could have undertaken cost-cutting measures, particularly overhead cost reduction measures. Amtrak has not made an effective attempt to achieve self-sufficiency."

ARC stated, "The events of September 11 are not the reason Amtrak will fail to achieve self-sufficiency. Amtrak will fail to pass the test because it will not have used the past five years to get its house in order by better managing its revenues, expenses and productivity. September 11 demonstrated, however, that rail passenger service can provide an important complement to other modes of transportation. It has become even more important to reform Amtrak, or replace it if necessary, to achieve efficient, productive and service-conscious rail service in the United States."

Of course, it is the Amtrak Reform Council's statutory job to be skeptical and avoid being a cheerleader for everything Amtrak does, but criticism of Amtrak management also came this past week from an unexpected source ‚ a major force in the halls of organized rail labor.

Byron A. Boyd, Jr., President of the 135,000-member United Transportation Union, declared in a written statement, "The Amtrak Reform Council has arrived at the front door of Amtrak with serious accountability issues. While there can be debate over a number of issues the ARC raises, there can be no debate over the mismanagement of Amtrak."

That comes as something of a surprise given that in its early days, the Amtrak Reform Council was at the wrong end of a PR campaign by rail labor to discredit the new agency.

"Only after the Amtrak Reform Council voted that Amtrak draw up a liquidation plan did Mr. (Amtrak President George) Warrington and his team reach out to rail labor for support in a classic case of reactive aloof management driven by a sudden fear of losing their own jobs. And still Amtrak does not understand its own role," Boyd charged.

Amtrak, needless to say, disagrees.

"Amtrak's management has worked effectively with a broad coalition," spokesman Bill Schulz told D:F. He insisted Amtrak has coordinated efforts among "labor organizations, business leaders, community groups and congressional, state and local elected officials to articulate a strong vision for the nation's passenger rail system, as well as secure $521 million in federal operating and capital support this year and pursue safety and security improvements of nearly $1.8 billion."

The man who runs the UTU was not impressed.

While noting that Warrington said last spring it was up to Congress to decide whether America should have a viable national passenger rail system, Boyd said the Amtrak boss "failed to mobilize support of opinion leaders and decision makers for financial support." Further, the union chief believes that in the rush to become operationally self-sufficient, "Amtrak managementähas pursued route cuts and reductions in service quality," with employees denied "the tools and support required to provide customer-responsive service."

This would probably be an appropriate time to interject a note related to personal experience here.

During October, this writer rode four long-distance Amtrak trains: the Crescent, the Sunset Limited, the California Zephyr, and the Capitol Limited.

My experiences with the on-board service personnel were generally positive, but Boyd's comments about those employees being denied the tools and support for customer-responsive service ring true.

It's obvious, in some cases, that dining cars lack the number of waiters and waitresses ‚ or "dining car attendants" as they're called ‚ to keep up with the demand that would come with a well-patronized train. Some customers had to wait up to an hour and 15 minutes to be served. At one table seating a family, the woman got her plate a full 10 to 15 minutes after her husband and kids did. The food was good once it arrived, notwithstanding one turkey dinner on the Crescent whose chef was a little heavy-handed with the garlic. But the wait was longer than most well run restaurants would expect their patrons to tolerate.

Another example gets closer to UTU's jurisdiction.

We found the toilet in our sleeping car room worked as long as our very conscientious car attendant was on the job and able to keep "tripping the breaker." But at night, when she was able to grab the little sleep long distance attendants get, the toilet was inoperable. This lends credence to the claims by critics ranging from rail labor to some members of the Amtrak Reform Council that the shoestring mentality that has dominated Amtrak operations since Day 1 has forced on-board employees to fill the gap with makeshift band-aid solutions. This is an obvious maintenance problem.

"The equipment is not being maintained," Boyd said in an interview with D:F on Friday. "Employees are asked to maintain the equipment going on the road when they don't have the adequate tools available to do that. The equipment needs to be maintained better."

Boyd also chastised Amtrak's Warrington for waiting until May of this year to use the bully pulpit of the National Press Club to say government policy-makers should decide whether they view Amtrak as a money-making business or a public service.

"He should have gone to the Amtrak Reform Council," which the union official acknowledges was merely following the law, and simply told its members that operational self-sufficiency by late 2002 was impossible.

In light of the security concerns facing the country, Boyd says at least one Amtrak procedure is an incredible example of "how this management team works."

It deals with a rule forbidding conductors to sell tickets on the train. Any passenger getting on the train without first purchasing a ticket would have to be put off at the next station. But that procedure is to be followed only in certain hours. Other hours of the day on the same line in the same territory, the conductor is allowed to sell tickets on board.

"Maybe Amtrak knows more about the terrorists than the rest of the world and knows what hours they don't work," Boyd remarked, tongue in cheek.

Some years ago, I co-authored an article for the late, lamented Passenger Train Journal rating Amtrak service based on a long trip on different trains at that time. I gave Amtrak an overall score of B-plus.

In updating my rating for the here-and-now, I had to consider the fact that while the quality of onboard personnel has improved, the reliability of equipment had taken a turn for the worse. Also, hard working customer-friendly Amtrak attendants maintain their good sense of humor notwithstanding that many of them are overworked.

Of course, it is in Boyd's interest, as a union president, to keep as many of his members employed as possible. So one would expect him favor hiring more people to staff Amtrak trains. But it is clear to the objective passenger that some important corners are being cut, to the detriment of service quality.

There was also an instance in Washington where an already slightly delayed train was forced to leave a full hour behind schedule simply because of a dopey case of the right hand not knowing what the left hand was doing. Some express cars were coupled onto the passenger consist, with a private car bringing up the rear.

According to employees explaining the incident afterward, it was at that point that the private car owner complained that this arrangement would cut him off from the rest of the train and leave him without adequate power for his car. Whereupon, the express cars were cut and moved aside while the private car was hooked on to the passenger section of the train. Then the express cars were placed at the end.

That kind of snafu should not have occurred. It inconveniences passengers who would like some reliable predictability that they will arrive at their destinations on time. It also is an example of why the freight railroads that carry Amtrak trains sometimes get rather impatient with the passenger carrier. Their freight business can be adversely affected by those delays.

Thus, balancing things out, notwithstanding the high marks for onboard service personnel, our previous score of B-plus drops to a simple B. There are others with different impressions in the above categories, for the better and for the worst. I can only speak to my own experiences.

Elaborating on its November 9 resolution, the Amtrak Reform Council Thursday issued an 8-page document supporting its finding. The ARC included ten reasons why Amtrak won't make the late 2002 deadline, including the notion that Amtrak's financial performance is worsening, the carrier finished Fiscal Year 2000 more than $100 million behind it own business plan, and for fiscal 2001, Amtrak is projected to report an operating performance $185 million behind its business plan.

Other criticisms were that Amtrak's assets are deteriorating from deferrals of maintenance expenses as evidenced by increases in numbers of hours of delay on the Northeast Corridor, and the railroad has not met its goals for revenue growth and cost containment.

Elsewhere, when it was obvious the Acela Express service would be delayed, Amtrak did not have a fallback plan to reduce costs or increase other revenues. Also, Amtrak's costs have been growing faster than its revenues, and its mail and express service is growing more slowly than expected.

The last two criticisms were that at the outset of the current fiscal year, Amtrak had no board-approved, strategic business plan in place, and it has no standard in place by which to measure the productivity of its work force.

Those are just a few of the highlights, but UTU's Boyd said they answer the wrong question. The ARC is simply following its congressional marching orders, he acknowledges; but that doesn't mean Amtrak has to follow that script in terms of explaining whether the self-sufficiency goal could be met.

"Never once did anyone from Amtrak management stand up and say that question cannot be answered in any other way but in the negative, and here's why," the union official said. The "self-sufficiency" goal was "about as much a fantasy as the original 1971 projection" that Amtrak would be "profitable" within two or three years.

"The issue is not about reaching financial self-sufficiency, but reaching where the passengers are," Boyd said, "The issue is one of commerce, mobility and the future."

Boyd thinks most Amtrak managers should be fired. Many of them at the top levels came from commuter agencies where they were used to dealing with a public that had little or choice but to ride the trains. An inter-city service is different, he argues, because it gets stiff competition from the airlines and the automobile.

Warrington has a commuter rail background with New Jersey Transit.

At the other end of the spectrum, National Corridors Initiative President and CEO James P. RePass praised Warrington. He stated flatly, "In my view, George Warrington has achieved a remarkable success with Amtrak in the face of absolutely overwhelming odds. Given essentially no federal money for capital purposes, and very little for operations, Warrington has managed to introduce an important new service, Acela, and continue the critical long distance service that is the only source of transport for many Americans who live in the West and South. While it is certainly possible to criticize Amtrak, you have to remember that they have been able to produce a national rail service from the slimmest of resources, and with a tiny fraction of the fiscal support other national rail systems are given."

RePass added, "We should note that many former critics would give Warrington high marks for rising above his commuter-only background in attempting to bring consistent service standards into line on long-distance trains. Maintenance levels are weak largely because Amtrak has no money to spare."

So, for all the criticism of what supposedly has been done wrong, what should an ideal national passenger rail system look like?

Paul Weyrich, Vice Chairman of the Amtrak Reform Council who took the lead in securing a 6 to 5 vote for the Nov. 9 finding, favors a bidding process that could break Amtrak's passenger monopoly.

The president of the Free Congress Foundation tells D:F that overall, "a new system would be built around the high speed corridors designated by DOT. The states should be encouraged to manage these corridors, to bid them out for service. Then a new corporation could be formed to connect these corridors."

Weyrich makes a significant point, given all the talk about "making a profit" that has hounded Amtrak from its inception.

"It would be understood that this corporation will not make money," he said, "but will be a service to those 500 plus communities which Amtrak serves and which are not served by other means of transportation. In some instances, some of these routes might be bid out as land cruise lines, although there would be coaches for those who need regular transportation. As you know, sleeping cars and coaches were run separately years ago." (Remember the 20th Century Limited and its coach counterpart, the Pacemaker on the old New York Central?)

"Sleeping cars, if run properly, can be profitable," said Weyrich. "Coaches may never be profitable."

The ARC vice-chairman's input is one of several that are being considered by the council members as they set about to come up with a consensus on required restructuring plan.

Boyd's overall suggestion is first to decide if the country wants a national passenger rail system, and if so, we should be "looking at service levels, frequency of service, on-board service, what's needed to make that service viableäreach out to the employees out there on the ground and on the trains, both in operating and on-board service." He also calls for market studies and a responsive management team.

What about the "No excuses" guarantee program. This idea, launched months ago, gives Amtrak passengers vouchers for free future trips if their experiences on Amtrak trains were not satisfactory.

There are persistent reports that Amtrak has had to send out more free tickets to passengers than originally projected. That says something about the standard of on-board service at least before the voucher program was inaugurated.

Boyd calls this guarantee idea a "stupid gimmick" because it "predisposes that you're not going to get (good service) to start with."

It is understandable that employees would not be enthusiastic about this system. If customers get free tickets because of a complaint that a given employee failed to remedy, that puts the employee under the gun, fairly or unfairly, depending on your point of view.

As a longtime Amtrak rider, I can only say that if my October experiences are any indication, on-board service has improved. Even though they are carrying a big load, most of these employees go out of their way to act as if they're glad to have you there. In the past, it hasn't always been that way, even though unsatisfactory on-board staffers always were in a small minority. But this time, there was not a single surly or incompetent employee. Who can say whether the "No excuses" voucher program had anything to do with this? If it did, then that can be marked down as a significant accomplishment of the Warrington regime.

A footnote: The Amtrak Reform Council apparently has had some problems getting the cooperation from Amtrak that at least the spirit of the 1997 law anticipated.

Weyrich said, "From Day One, Amtrak has refused to provide us with relevant data. We still do not have data on the express service initialed. We do not have adequate data on mail contracts. They would adopt business plans, but would not share the plans with us."


S&P puts Amtrak on 'CreditWatch'
Standard & Poor's reported on November 13 it placed its "CreditWatch" rating on Amtrak. S&P's action was based on the Amtrak Reform Council (ARC) decision to trigger a requirement for ARC to submit a plan to Congress to restructure and rationalize Amtrak, and for Amtrak to submit a plan for its liquidation to Congress.

The 6-5 ARC decision, with the USDOT voting in the minority, "was based upon the majority's determination that Amtrak will require an operating grant after fiscal 2002," S&P stated.

The plans are due to Congress within 90 days of the ARC's November 9 finding, which is February 7, 2002. S&P stated, "The company's near-term liquidity appears adequate."

S&P said the immediate result of the ARC action "is likely to involve Congressional discussion and possibly legislative action on the need for a late 2002 self-sufficiency deadline, a debate that was already under way prior to ARC's finding. An ARC finding had been a concern since 1997, but September 11 attacks appeared to have broadened public and political support" for Amtrak.

"If Congress implements legislation that improves and ensures Amtrak's long-term operating and capital funding, and eliminates the existing self-sufficiency requirement, then ratings could be raised or affirmed," S&P said, but also added, "Ratings could be lowered if the unfolding ARC and legislative processes reduce Amtrak's ability to meet its financial obligations."

S&P noted, "The issuer credit rating of Amtrak reflects its important public service role, operating improvements over the past few years and continued, although substantially changed, assistance from the federal government. These factors offset a weak financial profile. Potential restructuring, system rationalization, or liquidation of Amtrak could occur under existing legislation due to ARC's finding that that Amtrak will require an operating grant after late 2002."

The financial report observed, " Substantial evidence of political support is taken into consideration and reflected in the current rating, since without such support, Amtrak would not cover its cash operating expenses from operating revenues."

Amtrak was created by Congress to function as a corporation, not a department, agency, or instrumentality of the U.S. government.


Maine tickets go on sale
Amtrak started selling tickets to ride the Downeaster between Portland, Maine and Boston on Thursday. Scheduled service begins December 15. The passenger railroad said space is available for booking either by calling Amtrak at 1-800-USA-RAIL or through its web site (http://amtrak.com).

Two new station identifiers are in the timetable - POR for Portland, and BON for North Station, Boston.

A round-trip ticket will cost $42. Train service will also include bicycle transport, Amtrak said. Ten bike spaces will be offered per trip at $5 per bike.

Four daily trains in each direction will make intermediate stops at Old Orchard Beach (in the summer), Saco, and Wells, Maine; Dover, Durham, and Exeter, N.H.; and Haverhill, Mass.

Portland to Boston schedule
Depart PORArrive BON
No. 680 - 6:05 a.m. 8:50 a.m.
No. 682 - 8:45 a.m.11:30 a.m.
No. 684 - 2:00 p.m. 4:45 p.m.
No. 686 - 4:20 p.m. 7:05 p.m.


Boston to Portland schedule
Depart BONArrive POR
No. 681 - 9:45 a.m.12:30 p.m.
No. 683 - 12:00 p.m. 2:45 p.m.
No. 685 - 6:15 p.m. 9:00 p.m.
No. 687 - 11:00 p.m. 1:45 a.m.

Turkey week gets more trains
Preparing for what may be its busiest Thanksgiving holiday week ever, Amtrak reports it is adding 75,000 seats to trains across its national network - and especially encouraging travelers to purchase their tickets early.

The carrier stated in a press release "The addition of available seats for the November 20-26 Thanksgiving week is a 15 percent increase over Amtrak's usual capacity."

In the busy Northeast Corridor between Washington and Boston, "Amtrak will operate all-reserved trains in order to help assure each guest has a seat." Those reserved trains "will be available for all Northeast Corridor services with the exception of the Keystone and Clocker services."

Thanksgiving is traditionally Amtrak's busiest week of the year with ridership normally increasing by approximately 30 percent as compared to other weeks in November (the day before the holiday normally experiences an 80 percent increase over a usual Wednesday).

"While Amtrak does expect a great number of Americans to choose to travel by rail this holiday season, the U.S. travel market is facing an even greater uncertainty this year than in years past," Amtrak spokeswoman Karina Van Veen wrote in a press release, but, she added, "Amtrak has experienced daily, sellout conditions on its Metroliner and Acela Express services, as well as some of its long distance sleeper cars."

She said as of November 16, seats were still available for the railroad's premiere Acela Express and Metroliner all-reserved services in the Northeast, and its sleepers.

She also noted, "Since September 11, Amtrak has been operating on its highest state of security alert, and has taken measures such as increasing police presence in stations and on board trains, stepping up inspections of all Amtrak-owned properties, and conducting security reviews of ticketed passenger manifests."

She said passengers must have photo identification to purchase tickets. All passengers who are 18 years and older "must present a valid driver's license, passport, or other similar form of identification in order to purchase a ticket from station ticket agents, as well as when checking baggage."

She also said passengers boarding at any station between Washington and Boston are required to have purchased a ticket prior to boarding the train, as part of Amtrak's new security measures. On the day of travel, Amtrak "recommends that guests arrive at the station a minimum of one hour before departure, especially on the peak travel days of Wednesday and Sunday."

Amtrak operates in more than 500 communities in 45 states throughout a 22,000-mile route system.


Alstom, SNCF win engineering award
Alstom and its long-time customer, the French National Railroad (SNCF), have jointly received the prestigious Elmer A. Sperry Award for their collaborative role in creating one of the greatest engineering marvels in transportation history - the TGV (Train a Grande Vitesse or High-Speed Train) in France.

The award recognizes distinguished engineering contributions which, when implemented in actual service, advance the art of transportation whether by land, sea or air.

It was presented to the SociÈtÈ Nationale des Chemins de fer FranÁais (SNCF), or French National Railways, and to Alstom, which is an NCI member firm, on November 14 at the American Society of Mechanical Engineer's (ASME) 2001 International Mechanical Engineering Congress and Exposition in New York City.

"We at Alstom are delighted to have received the Sperry Award along with our valued customer, the French National Railroad," said Michel Moreau, President of Alstom's Transport Sector.

"There is simply no greater honor in the realm of transportation engineering. This award also recognizes the revolutionary nature of the TGV, whose success has inspired other nations, including America, to launch their own high-speed rail systems and thereby provide passengers with a fast, safe and cost-effective alternative to air and automotive travel."

Alstom builds high-speed trains and urban transit systems, including most recently Amtrak's Acela Express, America's first high-speed train. Alstom's partner, Bombardier, is suing Amtrak for $200 million blaming the railroad for cost overruns and delays.

Between 1965 and 1981, the French National Railway conceived the initial system, while Alstom built the initial TGV trains as well as the even more advanced subsequent versions.

The TGVs not only set speed records for transporting passengers, but the network was also able to run profitable trains, Alstom said, through France's existing electrified railway system, enabling France to avoid the enormous cost and environmental impact of building new tracks and stations. The first TGV was placed in service between Paris and southeastern France in September 1981.

It proved to be an enormous business, economic and technical success, reaching 10 million passengers in its first 10 months alone. Later-generation TGVs increased revenue speed from 168 mph to 186 mph) while increasing passenger comfort.

The Sperry Award is unique, in that it is the only transportation engineering honor selected jointly by six professional engineering societies. In addition to the ASME, they include the Institute of Electrical and Electronics Engineers; the Society of Automotive Engineers; the Society of Naval Architects and Marine Engineers; the American Institute of Aeronautics and Astronautics; and the American Society of Civil Engineers.


Corridor lines...

Caltrain cuts weekend service for two years

Caltrain is ending weekend commuter service for two years, starting next April.

The transit company, whose trains run from San Francisco to San Jose, is cutting service to accommodate construction on new express train lines. Thousands of people will be forced to find other ways to get between San Francisco and the peninsula.

A Caltrain spokeswoman said weekend traffic isn't nearly as heavy as passenger numbers on weekdays. Caltrain serves 2,000 travelers on Saturday and 6,000 on Sunday, as compared to about 34,000 on a typical weekday.

The express trains, tentatively called Baby Bullets, are part of a long-range Caltrain project to shorten travel time between San Jose and San Francisco. The $100 million project will add several express trains that promise to cut the 96-minute commute from San Jose to San Francisco in half.

The spokeswoman said Caltrain made the decision to cut weekend service because it's safer for passengers and construction workers on the railroad lines.


'Amfreight express' carries apples east
A truck shortage in the Pacific Northwest has been a plus for Amtrak.

A new crop Washington State apples and pears left Wenatchee on November 13, and by now are on East Coast tables for the holidays.

During the holiday season trucks carry Christmas trees, leaving little room for fruit. Washington Fruit Express rail service, initiated in mid-September 2001, is helping to alleviate the shortage with refrigerated ExpressTrak rail cars coupled to the Empire Builder.


Freight lines...
PW frieght

NCI: Leo King

P&W shareholders earned a dime a share following the railroad's latest financial results. The New England regional freight operator said operating revenues for the third quarter of 2001 were $6 million.
P&W profits off a tad
The Providence & Worcester Railroad Co. reported on November 9 that its "diluted income per share for the third quarter of 2001 was $.10 on net income of $448,000 compared with $.11 per share on net income of $502,000 in the third quarter of 2000." The results were for the third quarter and nine months ended September 30.

P&W stated operating revenues for the third quarter of 2001 were $6.0 million, a decrease of $142,000, or 2.3 percent, from $6.1 million in 2000.

"This decrease is primarily the result of declines in the volume of conventional and container freight traffic. The decrease in conventional carloadings is attributable to delays or losses of freight resulting from the terrorist acts of September 11, 2001," the carrier stated in a press release.

During October, the company's conventional freight carloadings "returned to their pre-September 11 levels. The decrease in container freight traffic results from the loss of a customer and weaker economic conditions."

P&W stated diluted income per share for the nine months ended September 30, 2001 was $.13 on net income of $558,000 compared with $.35 per share on net income of $1.5 million for the same period in 2000. The decrease in earnings is largely the result of a decrease in other income, principally gains from the sale of permanent easements of $1.1 million in 2000.

"The company has received significant income of this nature from time to time, but the amount can vary significantly from period-to-period," according to the press release.


STB sees its CN-IC decision as okay
The Surface Transportation Board (STB) has taken several actions in the last two weeks that affect many railroads, including the board finding "no competitive or other problems as part of the agency's second annual round of general (formal) oversight in the 'CN-IC' railroad-merger proceeding."

Chair Linda Morgan stated, "In view of its finding, the board seeks public comment on whether its general oversight of the merger should continue."

She added that in a decision issued in May 1999, the board approved the common control and integration of operations of the Canadian National (CN) and Illinois Central (IC) railroads, and in doing so, the STB "established general oversight for a period of up to five years so that the effectiveness of the various conditions imposed and the competitiveness of service provided by CN-IC and its Alliance Agreement with The Kansas City Southern Railway Co. (KCS) might be assessed."

CN filed its second progress report in July 2001 indicating that the merger has been successful to date and that CN has added new transportation services and improved transit times throughout its system. CN indicated that its labor relations with employees remained on good terms. CN also reported that rail-to-rail competition "is vigorous in the areas where its alliance agreement with KCS is in effect, that there have been no complaints regarding access through the Chicago gateway by North Dakota grain shippers or the pricing practices for Canadian lumber, and that CN continues to comply with all board-imposed environmental conditions."

CN also reported "by selling its 50-percent interest in the Detroit River Tunnel and by transferring operational control to the Canadian Pacific Railway Co., it resolved any outstanding concerns regarding the tunnel."

Elsewhere, the STB issued a decision addressing Houston-Memphis-St. Louis corridor trackage rights issues raised in the fifth annual round of a Union Pacific (UP)-Southern Pacific (SP) general oversight proceeding.

Specifically, the board clarified that the "entry-exit" and Texas-Louisiana restrictions placed on those trackage rights received by The Burlington Northern and Santa Fe Railway Co. (BNSF) in connection with the 1996 UP-SP merger are not applicable to certain BNSF traffic in general.

The board had noted earlier that BNSF's "trackage rights in the Houston-Memphis-St. Louis corridor largely addressed 2-to-1 shippers in Texas and Louisiana that, prior to the merger, moved traffic over the entire corridor to and from the St. Louis Gateway via either UP or SP (St. Louis Gateway traffic), and the trackage rights allowed BNSF to perform "directional running" for traffic moving over the parallel UP and SP lines comprising the corridor.

The federal body stated, "The entry-exit restriction provided that BNSF cannot enter or exit the trackage rights lines at intermediate points, such as Jonesboro and Hoxie, Ark. (the points at which the trackage rights lines intersect BNSF's own line that runs from and to the Powder River Basin), and a Texas-Louisiana restriction." The BNSF traffic on those trackage rights lines is limited to freight that "either originates in, terminates at, or moves through Texas or Louisiana, or originates in or terminates at 10 named points in Arkansas and Missouri."

An STB press release stated that "Even though this traffic generally moved over the entire corridor, BNSF and UP agreed on these restrictions to ensure that BNSF would use UP and SP track for the St. Louis Gateway traffic that the trackage rights were primarily designed to address, and that BNSF would use its own lines (especially its line between Memphis, Tennessee and St. Louis, Missouri) for other, non-merger related traffic."

UP argued that these two restrictions should remain in full force and effect for BNSF traffic, while BNSF argued, to the contrary, that these two restrictions should be removed.

The board ruled, however, in the legal language with which it frequently writes, "that neither of these restrictions can be applied to BNSF traffic that movesäpursuant to the 'build-in-build-out' condition that was imposed on the merger." That condition "allows BNSF to handle traffic moving from or to 'build-in-build-out' lines constructed after the merger, or pursuant to the 'new facilities' condition that was imposed on the merger." That condition allows BNSF to handle traffic moving from or to 'new facilities' constructed on any line over which BNSF received trackage rights in connection with the merger. Also included were 10 named points in Arkansas and Missouri (Camden, Pine Bluff, Fair Oaks, Baldwin, Little Rock, North Little Rock, East Little Rock, Forrest City, and Paragould, Ark. and Dexter, Mo.

The board ruled that other restrictions continue to apply.

The board issued a decision last week granting the Santa Clara Valley Transportation Authority's (VTA) motion to dismiss, as unnecessary, its verified notice of exemption from regulation to acquire approximately 5.8 route miles of the Union Pacific Railroad's (UP) right-of-way "and certain related improvements" located in Santa Clara County, Cal.

VTA, which is a public agency, and UP "will enter into agreements designed to permit both freight service and passenger service on the right-of-way," and "VTA will acquire a portion of UP's right-of-way and certain rail improvements on it for the sole purpose of constructing and operating an extension to VTA's light rail transit system."

The commuter line will build and operate a light rail transit extension on the northerly portion of the right-of-way, and UP will operate freight service on the southerly portion.

"To accommodate operations, UP's freight trackage will be relocated and reconstructed on the southerly portion of the right-of-way and UP will continue to operate freight service over the newly constructed line," according to the STB. The agreement also allows UP to keep a perpetual, exclusive railroad easement on the line for freight service. VTA will be prohibited from using all or any portion of the line for freight operations.

The board also recently ruled that Entergy Arkansas, Inc. (formerly Arkansas Power & Light Co.) that coal trains operated by BNSF, when moving from and to Entergy's electric generating facility at White Bluff, Ark., "can be routed via UP-BNSF line connections at Jonesboro and Hoxie, and need not be routed via Memphis."

The issue arose after Entergy and UP reached a settlement intended to resolve various complaints that Entergy had made against UP. As part of that settlement, UP agreed that, even if an 8.6-mile build-out line is not constructed, BNSF will be allowed to access White Bluff off of the line that UP itself uses to access White Bluff, but "the parties did not specify the route that BNSF would have to use when accessing White Bluff."

Elsewhere, the STB issued a decision requiring that affiliated railroads with integrated operations in the United States be combined for purposes of determining whether railroad systems are Class I (large railroads), Class II (medium-sized railroads) or Class III (smaller railroads).

"The principal objective of the new rule, which is focused on financial reporting, is to gather more meaningful and accurate information on the largest rail systems operating in the United States," Morgan stated.

The board also declined to institute a proceeding to consider increasing the annual revenue threshold for Class I status (large-railroad status that triggers the requirement that railroads file quarterly and annual reports) from $250 million to $500 million.

In changing its railroad-reporting regulations, Morgan said "the board does not intend to reimpose reporting requirements on smaller, non-Class I railroads that had been relieved of reporting obligations in the 1980s, and that Class II and III railroads would not be reclassified simply because they have corporate relationships with other railroads.

"However," she added, "the agency noted that when a group of commonly controlled railroads is operated as a single, integrated rail system, that integration should be recognized for railroad-classification purposes."

In another recent action, the board agreed that further TTX Co. monitoring "is no longer warranted." They had been looking over TTX's financial shoulders examining "the activities in establishing a railroad equipment pool to be used by individual railroads under TTX's equipment pooling authority."

Finally, Morgan said the Rail Consumer Assistance Program (RCAP), initiated one year ago on November 2, 2000 "continues to be effective in providing a valuable problem-solving service to the rail consumer public."

The program was established to "enhance the board's ability to assist rail consumers informally with disputes or problems that they are unable to resolve directly with railroads."

She said during RCAP's first year, the board staff "expeditiously handled and brought to a successful conclusion 110 rail consumer inquiries and complaints concerning such matters as rates and other charges, car supply and other service issues, claims for damages and service-related problems, employee concerns, and community issues."

The STB program is managed by the agency's Office of Compliance and Enforcement (OCE), includes a toll-free telephone number, (866)-254-1792; an e-mail address, http://RailConsumer@stb.dot.gov; and a Rail Consumer button on the board's home page, http://www.stb.dot.gov.


Meetings...

December 15

Citizens' Forum for Transportation

Sierra Club of Connecticut, Transportation Choices Coalition of Connecticut and NCI 9:30 a.m. to 3:00 p.m., New London, Conn. Radisson Hotel. Creating an integrated transit-based transportation system for New London, southeastern Connecticut and southwestern Rhode Island region.

Speakers to include former Rhode Island Governor's Counsel William G. Brody; Rhode Island Public Transportation Authority's GM Dr. Beverly Scott; Frank Guzzo, Siemens Transportation Systems of North America; transportation expert Marla Hollander; NCI President Jim RePass, and others.

For reservations, contact Sierra Club of Connecticut Transportation Chair Molly via e-mail at molly.mckay@snet.net with your name and credit card information. Registration is $25 for Sierra Club, TCCC, and NCI members, $30 for non-members. Luncheon.


January 11-15 2002

National Railroad Contractors Assn.

Annual exhibit and technical meetings
Coral Gables, Fla.
Contact Ray Chambers, 800 883 1557


The way we were... Frisco Hudson

NCI: Leo King collection

Where did the Frisco Hudson run to and from?

Frisco had some spiffy steamers

Preparing this week's "The way we were" turned out to be quite an odyssey. Searches and queries to a couple of online rail-related sites turned up little concrete information, so we turned to BNSF's public affairs guru, Steven Forsberg. He contacted the railroad's Suzanne Burris who responded, "After searching the remaining archives on the former Frisco, there is very little available to provide detailsä including exactly which passenger train ran between which community" with those 4-6-4 Hudson steam engines.

"This is due in large part," she wrote, "to the vast majority of archival materials being donated to the University of Missouri at Rolla and The Frisco Railroad Museum (online at www.frisco.org.)"

She told us, "A short blurb in the files describe the Frisco steam finale. Basically, after handling the heaviest traffic in the company's history, both freight and passenger, from 1942-46, the steam engines began to be phased out of service."

The Frisco "had 591 steam locos in 1946 and only 42 diesels," she continued, but "By the beginning of 1952, only 26 steam engines were still active. The 4-6-4 steam engines, along with the 4-8-2s, and the 4-8-4s, were important components during WWII. The final steam run, according to the file, took place on February 29, 1952. Passenger traffic increased during this period, as well as the shipment of additional materials related to the war effort. Besides the typical freight hauling of the past, the nation's railroads carried raw materials, processed materials, and anything and everything requested to speed necessary items for the military to their final destination."

So, no details on the engine 1063 were immediately available.

BNSF's web site yielded some additional history on the railway, though.

The story of the St. Louis-San Francisco Railway Co., "known to its mid-South neighbors as 'Frisco,' is a narrative of battles against long odds and of adaptation to changing circumstances.

"The Frisco was chartered in 1849 as the Pacific Railroad of Missouri, when discovery of gold at Sutter's Mill in California fanned America's long-smoldering desire for a connection with the markets of the Orient. Construction began in 1855, but bogged down until the Civil War ended.

"In the meantime, marauding bands of bushwhackers and jayhawkers that terrorized much of Missouri during the war did considerable damage to the railroad. As a result, it went bankrupt.

"In 1876, the southwest branch of the Pacific was purchased by the St. Louis-San Francisco Ry. Cherokee Indians successfully blocked survey and construction work on the line, dashing the dreams of a transcontinental railroad. Although it remained unable to complete its line through Indian Territory, Frisco was able to extend its trackage to Sapulpa, west of Tulsa, in the 1880s.

"After the turn of the century, Frisco completed its line through Kansas and Oklahoma, and into Texas. In 1901, it moved into the Southeast.

"The Frisco finally fulfilled a long-awaited dream of constructing a link to the Gulf of Mexico in the 1920s, only to plunge into bankruptcy after the Great Depression. The railroad struggled through the grim years of the Depression by abandoning much of its branch lines, and was there when the nation called on it during World War II.

"Closing of the East Coast sea lanes by German U-boats put oceans of Texas and Oklahoma oil onto Frisco rails for movement eastward.

"When Burlington Northern acquired the Frisco in 1980, it added not only a strategically located railroad, but a proud tradition as well."

BN itself was an amalgam of the Chicago, Burlington & Quincy and the Great Northern roads.

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" .jpg images average 1.7MB each, and are 300 dots-per-inch for print publishers.

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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