WEEKLY RAIL REVIEW

FOR THE WEEK ENDING SATURDAY, Jan. 27, 2007

BY: DAVE MEARS

(Posted by permission)

WEEKLY RAIL REVIEW

FOR THE WEEK ENDING SAT, JANUARY 27, 2007

BY DAVE MEARS

THE WEEK’S TOP RAIL AND TRANSIT NEWS (in chronological order):

(MON) The U.S. Federal Transit Administration gave New Jersey Transit formal approval to release its draft environmental impact statement for the project to build two new rail tunnels under the Hudson River linking New Jersey and Manhattan. The approval enables NJT to schedule public hearings and is the next step in securing federal funding for the project. A NJT spokesman said construction of the tunnels and project elements should begin by 2009. Additional to the two single-track tunnels, additional station capacity under 34^th Street in Manhattan and signal, track and structure improvements along and adjacent to the Northeast Corridor line are also planned as part of the project. (ffd: RT&S)

(MON) Norfolk Southern and Union Pacific announced that they would jointly operate a new run-through intermodal train between Los Angeles, CA and the U.S. Southeast beginning February 19. The new service will allow sixth-morning delivery. NS and UP also announced that they will begin shifting some intermodal rail traffic to a new, shorter route via Shreveport, LA as early as the third quarter of this year, attendant with the completion of the first phase of improvements on Kansas City Southern’s Meridian Speedway line, which KCSR and NS are jointly funding improvements to. (ffd: NS Corp., Railway Age)

(TUE) Lawyers for CSX, the federal government and the District of Columbia resumed arguments concerning DC's ban of hazmat rail traffic on CSX’s freight rail line through the city. The arguments are being heard in the court of U.S. District Judge Emmet Sullivan. DC passed an ordinance two years ago banning hazmat rail traffic on the line, but CSX has challenged and stayed the ban, claming that the city had no legal authority over interstate rail shipments. Judge Sullivan has not indicated when he will rule on the case. (ffd: NARP, wire services)

(TUE) The Illinois Department of Transportation has announced that it is pulling out of the project to develop and implement a new positive train control (PTC) system on the line between St. Louis, MO and Chicago, IL. The National Association of Railroad Passengers reported that the project, which was being developed in partnership with Lockheed Martin, was “fraught with technical problems.” An IDOT spokesman said that it will next evaluate “off the shelf” PTC technology and remains committed to using such systems to speed up and make safer travel on the line. (ffd: NARP, wire services)

(TUE) BNSF announced that it would spend $2.75 billion for capital improvements in 2007. A BNSF spokesman said that cash capital commitments would total about $2.4 billion and that BNSF planned to lease 200 locomotives for about $350 million. The spokeman added that 2007 capacity expansion projects include double or triple-tracking about 40 miles of its Transcon Line, including building a second main line through Abo Canyon in New Mexico, and adding about 60 miles of third or fourth track on its line accessing Wyoming’s Powder River Basin coal fields. (ffd: BNSF Corp.)

(TUE) Outgoing New Jersey Transit head George Warrington proposed a 10 percent fare hike for NJT buses, light rail and commuter rail services. Mr. Warrington said that expenses could not be cut further without affecting services. Mr. Warrington has said that he will leave NJT by March 30. (ffd: wire services)

(WED) The head of the House Transportation & Infrastructure Committee, Rep. James Oberstar (D-MN), said that public bond financing could possibly play a role in improving the nation’s passenger rail infrastructure. Following an address to the U.S. Conference of Mayors in Washington, DC, Mr. Oberstar said that he was in the process of determining what level of support there was on his committee this year for such legislation. The committee last year endorsed legislation that would have permitted $1.2 billion in tax-exempt, private-activity bonds to be issued annually over a ten-year period for high-speed rail projects, but that legislation was not further progressed by the House. (ffd: The Bond Buyer)

(THU) A Union Pacific coal train derailed 46 cars near Gibbon, NE. No one was injured in the accident, which blocked all three tracks of the UP’s main line through Gibbon. UP cleared one of the tracks later in the day and had all three tracks clear and open again by the next day. (ffd: wire services)

(THU) New Jersey Transit announced that it was expanding its current improvement project at Newark, NJ’s Penn Station. An NJT spokesman said that the current project including expanding the platform along Track 5 to accommodate longer trains, but said that it would now also make stairway improvements at Market Street, demolish a former station heating plant, and construct a pedestrian overpass at the Track 5 platform. The spokesman added that these latest improvements were expected to be complete by the end of 2008. (ffd: Progressive Railroading)

(THU) The U.S. Transportation Security Administration released its final rules related to the new Transportation Worker Identification Credential (TWIC). The rules release signals the beginning of the TWIC enrollment process for some 750,000 port workers and truck drivers. A TSA spokesman said that it would perform “security threat assessments” on applicants, which include checks of criminal records and terrorist watch lists, and immigration status. The TWIC card itself includes both photo identification and fingerprint data embedded on a microchip that can be read by an electronic reader. (ffd: Journal of Commerce)

(THU) The Port of New York & New Jersey announced that its ExpressRail intermodal terminals handled a record 338,882 containers in 2006. The number represents an 11.8 percent increase compared with 2005. A PANYNJ spokesman said that it is now working on projects that will expand capacity at ExpressRail’s Elizabeth and Port Newark terminals such that they will be able to handle an additional 600,000 containers annually by 2011. (ffd: PANYNJ Corp., Progressive Railroading)

(THU) Canadian Pacific Railway announced that it had been named “official rail freight services provider” of the 2010 Olympic Winter Games, which are to be held in Vancouver, BC that year. A CPR spokesman said that the designation includes sponsorship assistance to Canadian teams participating in the Beijing 2008, Vancouver 2010 and London 2012 Olympic Games. (ffd: CPR Corp.)

(FRI) The U.S. Surface Transportation Board issues a ruling declaring it an unreasonable practice for railroads to compute fuel surcharges in a manner that does not correlate with actual fuel costs for specific rail shipments. The ruling prohibits the assessment of fuel surcharges based on a percentage calculation of the base rate charged to freight customers and also prohibits “double dipping,” meaning applying to the same traffic both a fuel surcharge and a rate increase based on a cost index that includes a fuel component. The ruling also includes mandatory reporting requirements by all large Class 1 railroads related to their fuel surcharge practices. The STB’s actions follow notable public hearings and relating work about rail fuel surcharges it conducted in 2006. (ffd: STB)

(FRI) The Federal Railroad Administration issued a safety advisory intended to ensure that specialized maintenance equipment is operated only by fully-qualified individuals and is property inspected. The advisory follows up the runaway derailment of a rail grinding train on the Union Pacific’s line through California’s Donner Pass last November. The accident killed 2 contract employees working on the train. An FRA spokesman said that its preliminary investigation has revealed that neither of the train’s operators were familiar with the rail line they were operating over, and that FRA inspectors had found numerous mechanical defects on the rail grinding train itself. (ffd: FRA, RT&S)

(FRI) The State of New Mexico announced that service on its Rail Runner Express commuter train would begin between Los Lunas, NM and Belen, NM on February 2. The service extension will complete service over a 50-mile route between Belen and Bernalillo, NM, serving Albuquerque, NM and its suburbs along the line. A state spokesman said that a third train would be put in service on the line, also on February 2. (ffd: Progressive Railroading)

(FRI) A nonprofit group, Walkway Over the Hudson, announced that it is working to rebuild and reopen the former New Haven Railroad bridge over the Hudson River at Poughkeepsie, NY. The bridge, built in 1888, was burned by fire in 1974 and has been out of service and deteriorating since that time. A spokesman for the group, which acquired the bridge in 1998, said that it hopes to reopen it “so that strollers and cyclists can experience spectacular views of the Hudson River Valley.” The spokesman said that it is working to raise between $10 million and $30 million to repair the bridge and undertake related improvements, such as installing an elevator to it, and that it hopes to have the money and the work complete by Spring, 2009, which it noted will be the 400^th anniversary of explorer Henry Hudson’s first trip up the river. (ffd: New York Times, Trains)

STATS – TRAFFIC:

(THU) For the week ending January 20, 2007, U.S. rail volume grand totaled 31.3 billion-ton miles, down 7.4 percent from the comparable week last year. U.S. carload rail traffic was down 8.3 percent, down 7.2 percent in the East and down 9.1 percent in the West. Also for the week, U.S. intermodal rail traffic was down 3.0 percent, Canadian carload rail traffic was down 4.1 percent, Canadian intermodal rail traffic was up 6.3 percent, Mexico’s Kansas City Southern de Mexico’s carload rail traffic was down 16.7 percent, and KCSM’s intermodal rail traffic was up 19.4 percent.

For the period January 1 through January 20, 2007, U.S. rail volume grand totaled 92.8 billion ton-miles, down 6.0 percent from the comparable week last year. Also for the week, U.S. carload rail traffic was down 7.1 percent, U.S. intermodal rail traffic was down 1.8 percent, Canadian carload rail traffic was down 6.6 percent, Canadian intermodal rail traffic was down 2.4 percent, Mexico’s KCSM’s carload rail traffic was down 18.7 percent, and KCSM’s intermodal rail traffic was up 8.3 percent. (ffd: AAR)

MORE STATS – OPERATING PERFORMANCE:

(NOTE: Effective October 1, 2005, railroads that had been furnishing operating performance statistics to the Association of American Railroads began applying a new standardized definitional framework, aimed at eliminating differences in calculation methodology. Concurrent with but unrelated to these changes, Canadian National elected to no longer furnish these statistics.)

(WED) For the week ending January 19, 2007 and versus the comparable week last year, average total cars on line was as follows: BNSF, 227,545 cars versus 217,935 cars; Canadian Pacific, 81,825 cars versus 81,832 cars; CSX, 221,067 cars versus 225,030 cars; Kansas City Southern, 28,024 cars versus 27,680 cars; Norfolk Southern, 201,428 cars versus 205,957 cars; and Union Pacific 311,784 cars versus 323,971 cars.

Also for the week ending January 19, 2007 and versus the comparable week last year, average train speed was as follows: BNSF, 22.7 mph versus 23.5 mph; Canadian Pacific, 23.8 mph versus 25.7 mph; CSX, 21.7 mph versus 19.8 mph; Kansas City Southern, 24.6 mph versus 21.2 mph; Norfolk Southern, 22.8 mph versus 20.9 mph; and Union Pacific, 20.7 mph versus 21.3 mph.

Finally for the week ending January 19, 2007 and versus the comparable week last year, average terminal dwell time was as follows: BNSF, 26.2 hrs versus 25.0 hrs; Canadian Pacific, 22.7 hrs versus 21.3 hrs; CSX, 22.5 hrs versus 26.7 hrs; Kansas City Southern, 25.1 hrs versus 25.5 hrs; Norfolk Southern, 20.3 hrs versus 23.8 hrs this week last year; and Union Pacific, 25.7 hrs versus 28.3 hrs. (ffd: AAR)

STILL MORE STATS – 4^TH QTR AND FULL YEAR 2006 RESULTS:

(MON) For the fourth quarter of 2006, CSX reported net income of $347 million, up 46.4 percent from $237 million in the fourth quarter of 2005. Revenues were $2.396 billion, up 7.9 percent from $2.219 billion in the fourth quarter of 2005. CSX’s operating ratio was 78.9 percent, improved from 81.3 percent in the fourth quarter of 2005.

For the full year 2006, CSX net income totaled $1.310 billion, up 14.4 percent from 2005’s total of $1.145 billion. Revenues totaled $9.566 billion, up 11.0 percent from 2005’s total of $8.618 billion. CSX’s 2006 operating ratio was 77.8 percent, improved from its 2005 operating ratio of 82.0 percent. (ffd: CSX Corp.)

(TUE) For the fourth quarter of 2006, BNSF reported net income of $519 million, up 20.7 percent from $430 million in the fourth quarter of 2005. Revenues were $3.882 billion, up 9.4 percent from $3.550 billion in the fourth quarter of 2005. BNSF’s operating ratio was 75.0 percent, improved from 76.8 percent in the fourth quarter of 2005.

For the full year 2006, BNSF net income totaled $1.887 billion, up 23.2 percent from 2005’s total of $1.531 billion. Revenues totaled $14.985 billion, up 15.3 percent from 2005’s total of $12.987 billion. BNSF’s 2006 operating ratio was 75.8 percent, improved from its 2005 operating ratio of 76.8 percent. (ffd: BNSF Corp.)

(WED) For the fourth quarter of 2006, Canadian National reported net income of C$499 million, up 16.0 percent from C$430 million in the fourth quarter of 2005. Revenues were C$1.942 billion, up 2.9 percent from C$1.886 billion in the fourth quarter of 2005. CN’s operating ratio was 61.1 percent, improved from 61.8 percent in the fourth quarter of 2005. (ffd: CN Corp.)

For the full year 2006, CN net income totaled C$2.087 billion, up 34.1 percent from 2005’s total of C$1.556 billion. Revenues totaled C$7.716 billion, up 6.5 percent from 2005’s total of C$7.240 billion. CN’s 2006 operating ratio was 60.7 percent, improved from its 2005 operating ratio of 63.8 percent. (NOTE: In comparing CN’s operating ratio with U.S.-based railroads, please note that CN, by and large, does not pay health benefits for its Canadian employees, due to Canada’s nationalized health care program. CN does pay health benefits for its U.S. employees. Also, CN’s debt servicing obligations date mainly from the time of its privatization.)

(WED) For the fourth quarter of 2006, Norfolk Southern reported net income of $385 million, up 6.3 percent from $362 million in the fourth quarter of 2005. Revenues were $2.319 billion, up 2.7 percent from $2.257 billion in the fourth quarter of 2005. NS’s operating ratio was 73.5 percent, improved from 73.7 percent in the fourth quarter of 2005.

For the full year 2006, NS net income totaled $1.481 billion, up 15.6 percent from 2005’s total of $1.281 billion. Revenues totaled $9.407 billion, up 10.3 percent from 2005’s total of $8.527 billion. NS’s 2006 operating ratio was 72.8 percent, improved from its 2005 operating ratio of 75.2 percent. (ffd: NS Corp.)

(THU) For the fourth quarter of 2006, Union Pacific reported net income of $485 million, up 63.8 percent from $296 million in the fourth quarter of 2005. Revenues were $3.962 billion, up 9.4 percent from $3.621 billion in the fourth quarter of 2005. UP’s operating ratio was 79.6 percent, improved from 85.3 percent in the fourth quarter of 2005.

For the full year 2006, UP net income totaled $1.606 billion, up 56.5 percent from 2005’s total of $1.026 billion. Revenues totaled $15.578 billion, up 14.7 percent from 2005’s total of $13.578 billion. UP’s 2006 operating ratio was 81.5 percent, improved from its 2005 operating ratio of 86.8 percent. (ffd: UP Corp.)

EXPANSIONS, CONTRACTIONS AND ALIKE:

(THU) Georgia Southwestern Railroad filed to abandon approximately 5 miles of line near Eufula, AL. (ffd: STB)

(THU) Norfolk Southern Railway filed to abandon, and Western Tennessee Railroad filed to discontinue service over, approximately one-quarter mile of line in Jackson, TN. (ffd: STB)

(FRI) Kansas City Southern Railway granted Columbus & Greenville Railway overhead trackage rights over approximately 12 miles of line between Artesia, MS and Columbus, MS. Per the filing, the purpose of the trackage rights “is to enable CAGY to provide competitive rail service to a new steel mill being constructed by SeverCoor LLC, at the Lowndes County Industrial Mega Site.” (ffd: STB)

(FRI) CSX granted Canadian Pacific Railway’s Delaware & Hudson Division overhead trackage rights between Kenwood Yard in Albany, NY and Selkirk Yard in Selkirk, NY via its Castleton Secondary. Per the filing, the purpose of the trackage rights, which total about 8 miles, “is to allow CP/D&H to handle CSX trains between Rouses Point, NY and CSX’s Selkirk Yard pursuant to a new haulage agreement between the parties.” (ffd: STB)

(FRI) The Northern Central Railroad filed to acquire and operate a portion of the former PRR Northern Central line for approximately 2.2 miles out from where it connects with the Amtrak NEC line just south of Amtrak’s Penn Station in Baltimore, MD. In its filing, NCR said that this acquisition and operation would be to permit interchange of rail traffic with CSX and Norfolk Southern, although it stated that it has not yet reached agreement with these parties for such interchange. (ffd: STB)

(FRI) The Surface Transportation board granted Union Pacific’s earlier request to abandon approximately 22 miles of its Flanigan Industrial Lead in Washoe County, NV and Lassen County, CA, and approximately 1 mile of its Susanville Industrial Lead in Lassen County, CA. (ffd: STB)

APPOINTMENTS, ACHIEVEMENTS AND MILESTONES:

(SUN) George Smathers passed away in Indian Creek Village, FL at Age 93. Between 1946 and 1969, Mr. Smathers was a U.S. representative and then a U.S. Senator. He was chief sponsor of 1958’s Surface Transportation Act. After leaving the senate, he became head of America’s Sound Transportation Review Organization (ASTRO), whose proposals and recommendations formed the basis for many of the provisions of the 1980 Staggers Rail Act. “Mr. Smathers was a transportation visionary,” commented AAR President Edward Hamberger in a prepared statement. (ffd: Progressive Railroading)

(TUE) Union Pacific appointed Arnold Robinson its Superintendent-Commuter Operations-Chicago. Mr. Robinson began his railroad career in 1979 on UP predecessor Chicago & North Western and succeeds Greg Larson, who has retired. (ffd: UP Corp.)

(WED) CSX appointed Jim Marks its VP-Safety. Mr. Marks, who was most recently CSX’s AVP-Risk Management, succeeds Bob Bernard, who has announced his intention to retire in March. (ffd: CSX Corp.)

(THU) CSX appointed Alison Brown its VP-Human Resources. Ms. Brown has been with CSX since 1987. (ffd: CSX Corp.)

(FRI) The Port of New York and New Jersey appointed Anthony Shorris its Executive Director, which is its chief position. Mr. Shorris, who succeeds Kenneth Ringler, was PANYNJ’s executive director once before, between 1991 and 1995. (ffd: Progressive Railroading)

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Weekly Rail Review is edited from public news sources and published weekly to those working in, or interested in, rail and transit. Send an e-mail to weeklyrailreview@aol.com <mailto:weeklyrailreview@aol.com> to receive it, with my compliments.

BE SAFE AND PROSPER,

Dave Mears

Cherry Hill, New Jersey, USA

Posted: 01/29/07