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Joe Boardman's second-term challenge

Fred Frailey — Thu, 23 May 2013 19:24:00 GMT

Amtrak’s board of directors has extended Joe Boardman’s contract as president for two additional years. Boardman, who turns 65 in December, will remain at Amtrak’s helm until at least November of 2015. That’s fine with me. It’s good to keep the revolving door of the executive offices from spinning around so often. Some continuity will do Amtrak good.

But will what’s good for Joe Boardman be good for Amtrak’s customers? Only if Boardman, now that he’s secure in the job, does the hard stuff.

Lately he’s been beating the drum for the 15 long-distance train pairs, arguing that they’re what connects the country. He’s even gotten the California Republican who heads the rail subcommittee of the House Transportation and Infrastructure Committee to agree these trains really matter. I’m all for that, but words are words, Mr. Boardman. It’s easy to say how important the long-distance network is to the country in news conferences or before Congress. What he’s not done is go to bat for these trains with the freight railroads over whose tracks they run. That’s where it really matters

Three of the long-distance routes are hot buttons now, and so far as anyone knows, Joe Boardman fiddles while they fester. One is the New Orleans-Los Angeles Sunset Limited, which Union Pacific said could be run daily if Amtrak were to fork over close to $1 billion for infrastructure improvements. How did Boardman respond to this? He gave up with a whimper, blaming his marketing department for even proposing a daily Sunset! In exchange for a two-year moratorium on bringing up this matter again, UP agreed to some schedule changes for the twiweekly Sunset.

Amtrak’s board of directors also approved a daily Cardinal between Chicago and New York City via Cincinnati. This, too, seems to have stalled out without any meaningful involvement between Amtrak and CSX.

Finally, there’s the possibility that the route of the Chicago-Los Angeles Southwest Limited will be severed between Kansas City and Albuquerque in 2015. Amtrak or the states through which the train runs must cough up $100 million or so to fix the tracks in Kansas, Colorado, and New Mexico by then or the route will be unsustainable. The three states have said, in a joint letter, get lost. The alternative of running on the BNSF Railway freight route via Amarillo, Tex., would cost about as much, to help pay for closing some single-track stretches, BNSF has informed Amtrak’s staff.

I don’t believe for a minute that what BNSF Railway, CSX, and Union Pacific are saying is their final answer. None of them has yet been engaged at a high level by Amtrak, meaning Joe Boardman.

In an interview with me a year ago, Boardman said he’s tough enough to do the hard things. To which I now say: You’ve got breathing room, Joe, so prove it. — Fred W. Frailey

KCS Part II: The minnow can swallow a whale

Fred Frailey — Thu, 23 May 2013 01:23:00 GMT

In a response to my last blog, D.Carlton this morning jolted me wide awake. He said, in regard to which railroad might buy Kansas City Southern: “You have it backwards. The question is: Who is KCS going to buy?” ***! That Mrs. Carlton sure raised a smart boy. In essence, what D. is saying is that the inflated stock price of KCS is a huge gift that translates into enormous buying power if that railroad went shopping for a bigger partner. It completely turns the table on the usual way business is conducted, in which the larger company buys the smaller one. So let me explain.

I took Carlton’s idea to a friend who is in the money biz and good with numbers. I’ll call him Slim. Slim played around with the numbers and reported back that D. is absolutely right. Let’s pretend that Norfolk Southern and KCS agreed tonight to an all-stock merger. It would make sense, after all. The two railroads fit together wonderfully, and there is no tried and tested successor to chief executive Wick Moorman, 60, who faces mandatory retirement in a few years.

Okay, analysts estimate that NS will earn $2.4 billion in 2015 and KCS $640 million. This would give a combined railroad $3 earnings in income if no savings were achieved and no business was lost to competing companies. In terms of earnings per share, this translates to $7.10 for NS and $5.80 for KCS.

Let’s keep this simple. First, assume NS bought KCS with stock, at no premium price. It would have to issue 158 million shares, on top of the present 338 million. So the combined profit of $3 billion divided by 496 million shares, brings the 2015 earnings per share for NS from $7.10 down to $6.12. That’s called dilution. I question whether NS shareholders would approve such a deal.

Now turn the tables and have KCS be the buyer. KCS shares are valued by investors as being worth, per dollar of earnings, twice what those of NS are. To buy NS at last night’s closing price of $79.23 per share would require KCS to issue 237.4 million new shares in addition to the 111.1 million shares currently outstanding.

The surviving company, Kansas City Southern, would now have that same $3 billion of earnings. Its earnings per share would rise, from $5.80 to $8.72 a share. KCS shareholders would love such a union.

Realistically, KCS would have to pay NS shareholders a premium of 20-30 percent to get them on board. But even then the math still works for KCS.

What you’ve just read is Slim’s analysis, and it passes my hee-haw test.

On the other hand, what would be the consequences? If BNSF Railway is opposed to this deal, there is not a lot it can do. NS and KCS jointly own the Meridian Speedway, the east-west line between Meridian, Miss., and Shreveport, La. KCS then goes west to Dallas and south to Laredo, Tex., and Mexico. The Meridian Speedway deal and executive chairman Mike Haverty’s suggestion to BNSF that they do a similar project between Shreveport and Dallas drove BNSF right into the arms of CSX for southwest-southeast traffic. To my knowledge, BNSF doesn’t do a whole lot of business with KCS or with NS in the Southeast.

Now let’s suppose Union Pacific hates this idea. It does run its intermodal trains over the Speedway to reach Norfolk Southern. Could it divert traffic to CSX? Not easily. It can reach CSX in Memphis and New Orleans, but these are inferior interchange points compared to Shreveport and the Speedway; UP would be cutting off its tail.

Is this something that Kansas City Southern has considered? Probably. Could it succeed doing an unfriendly offer for NS? I don’t know, but at a 30 percent premium to the present price it would be hard for NS shareholders to turn it down. And do I think this might happen? I have no idea at all. But it’s something to think about.

And the amazing thing, when you do think about it, is how the game has changed. Kansas City Southern was always the poor relation at the railroad dinner table, the brother that the bigger, older, stronger Class I railroads ignored, insulted, or made fun of. Today, they do that at their own peril.

Thanks to D. Carlton and Slim for their input. — Fred W. Frailey

Is KCS buyable, and by who?

Fred Frailey — Wed, 22 May 2013 02:18:53 GMT

It’s silly time on Wall Street again. Bloomberg Businessweek calls Kansas City Southern, North America’s smallest Class I railroad, both alluring and expensive to acquire. It then goes on to explain which larger railroads may find it attractive. Among securities analysts surveyed by the publication, all but two Class I lines are named as a potential buyer. But I think Businessweek and its sources have it mostly wrong. The larger railroad nobody mentions, I maintain, has the most to gain by buying KCS. But because of its expensive stock price, Kansas City Southern is probably too costly for anyone to buy. And besides, there are other issues, including the fact that KCS is not indicating it wants to be bought. So I’ll summarize what Businessweek reports, and then give you my take.

Traffic on the KCS network is growing like a weed, with sales poised to expand by almost 50 percent between now and 2016, according to Bloomberg. Moreover, its 3,100-mile network in Mexico is beginning to solidify around a bevy of automotive assembly plants. It carries frack sand and pipe to shale drillers in South Texas, and is exploring a massive movement of crude oil from northern originations to Port Arthur, Texas. Meanwhile, movement of coal from the Powder River Basin to more than half a dozen on-line power-generating plants is recovering nicely from a dive in 2012.

There are so many things to like about KCS, in fact, that Businessweek doesn’t get around to listing them all. Case in point: In 2009, at the absolute depth of the Great Recession, most of its debt matured and had to be refinanced on a short term basis at a yield to maturity of an outrageous 16.5%. It was swallow hard and do it or risk bankruptcy. Recently the company completed a refi of its entire debt at an average cost 3.5% and average maturity of 14 years. So how to you like them apples?

Businessweek correctly concludes that in the perfect world everybody, or almost everybody, would like to gobble up this railroad. The research director at Hodges Capital Management in Texas, which runs some snazzy mutual funds, sees Union Pacific as the most obvious acquirer. Desjardins Group says no, the most natural fit is with Canadian Pacific (the two railroads meet in Kansas City) or Canadian National (they market jointly through Jackson, Miss.).

FBR, an investment bank in Arlington, Va., finds BNSF Railway is the most likely buyer. BNSF, a Berkshire Hathaway subsidiary, has the financial power of its parent, is under no short-term pressure from investors, and can integrate KCS into its network behind a curtain, so to speak.

Fred says baloney to all this. Forget Union Pacific as a buyer. The antitrust barriers are insurmountable even if UP is gutsy enough to try. UP already owns Texas — next to it, BNSF is barely a presence — and if it got KCS would own Mexico, too. And BNSF would pull out all the stops, provoking a nuclear winter in railroading, to hold its traditional rival at bay.

Forget the Canadian railroads, too. True, CP and KCS join at Kansas City, but aside from grain, the traffic potential between them isn’t that great. Besides, CP’s Hunter Harrison has his hands full whipping his railroad into shape. As for CN, it’s an even clumsier fit than KCS + CP. As for CSX Transportation, there’s no there there between it and KCS.

No, the railroad that would benefit the most owning KCS is Norfolk Southern, which of course Businessweek doesn’t even mention. Trust me (because I’ve seen parts of the data), there is a huge flow of goods between Mexico and the eastern half of Texas on the one hand, and the NS service area on the other. Connecting to this groundswell of potential intermodal business is the whole point of Norfolk Southern’s Crescent Corridor, which officially launched this January 20.

But I don’t see much happening between NS and KCS. First, I question whether NS CEO Wick Moorman would want to take this on; he’s got a lot to occupy his energies, trying to deal with the decline of Appalachian coal traffic. Second, KCS is hyper-expensive to buy. As I write this, its shares trade for 28 times estimated 2013 earnings, 23 times 2014 estimates, and 20 times 2015 guesses. The price-earnings ratios of NS are half that. And any buyer would have to offer a premium! No matter how logical a fit, buying KCS would seriously dilute NS earnings and current shareholders would revolt.

So what might work? I’ll offer two ideas.

First, Norfolk Southern would buy not only KCS but its new CEO, Dave Starling, as well. This would give KCS an incentive to deal with NS. I don’t know Starling, but people who do say he is the best in the business at what he does. Let’s assume that Moorman’s CEO-in-waiting, newly installed NS president Jim Squires, is judged by the board of directors as not up to the top job when the time comes in a couple of years. NS could buy KCS and install Starling as chief executive. A long shot, yes, but isn’t that what Burlington Northern did when it bought the Santa Fe Railway, giving the corner office to Santa Fe’s Robert Krebs?

And let’s go back to BNSF. The people at FBR have a point. If owning KCS is a big enough long-term plus to the railroad’s Matt Rose and Berkshire’s Warren Buffett, this acquirer has the money at its fingertips, and the dilution to earnings will be lost inside Berkshire’s huge tent.

Both NS and BNSF are virtually end to end with Kansas City Southern and barely compete with the smaller railroad anywhere, lessening the risk of lost competition should they acquire it. And (not mentioned by Businessweek), the Surface Transportation Board long ago said the regulatory barriers to buying KCS would be far lower than a combination between the larger Class I railroads.

Summing up: Odds are KCS will still be its own boss five years hence. But if it is not, I think Norfolk Southern and KCS make the best fit and the most business sense, but unless KCS stock gets hammered relative to that of NS, the larger railroad will not have the nerve to act. In that case, the most likely buyer, if any, turns out to be the folks from Fort Worth, financed by the wallet of Mr. Buffett in Omaha and abetted by the man’s infinite patience for making things work out right. — Fred W. Frailey

2012 Trains photo contest

Angela Pusztai-Pasternak — Tue, 21 May 2013 21:39:00 GMT

Thanks again for sending us more than 400 photos for our 2012 contest. The theme was the blue hour, or the one hour before sunrise and one hour after sunset. Check out the winners below, and please let us know what you think by commenting.

Grand prize: Robert Jordan's aerial image of a Canadian Pacific freight at Bellevue, Iowa.

First prize: Eric Williams shot of a Metro-North train crossing Moodna Viaduct at Salisbury Mills, N.J.

Second prize: Stewart Buck's stark photo of a switchman at Union Pacific's Short Line Yard in Des Moines, Iowa.

Runner-up: Dennis Livesey's Amtrak Empire Service train at Cortlandt, N.Y.

Runner-up: Bruce Stahl's Chicago Transit Authority Green Line train.

Runner-up: Greg Durling's photo of Amtrak's Blue Water at Durand, Mich., en route to Port Huron.

Runner-up: Renaud Chodkowski's photo of a Paris commuter train as it arrives at Persan-Beaumont station.

Runner-up: Ken Fitzgerald's image of a tower operator at Union Pacific's Davidson Yard in Fort Worth, Texas.

Thanks for checking them out! And thank you to those that entered and those that won! When you leave your comments, please remember to be courteous.

Watching Norfolk Southern trains at Shawsville, Va.

Samuel Phillips — Tue, 21 May 2013 13:51:31 GMT

I want to take you to a place that has become a favorite of mine to visit again and again. Shawsville, Va., situated along the westbound assault of Christiansburg Mountain on Norfolk Southern’s Christiansburg District, is a spot on the former Norfolk & Western main line between Norfolk, Va., and Cincinnati.

For those that regularly see my photography, you know that I love shooting at one particular location in Shawsville, just east of the downtown area. I stumbled upon the location several years ago, but never began shooting and taking advantage of its photographic possibilities until last year.

The compelling attributes include the sweeping S-curve, the white picket fence, the distant mountains, and the sound of a train traversing the grade. I am drawn to this spot.
Situated on the steepest part of the 1.5-percent-westbound climb, train flanges squeal and engines in notch 8 fill the air. The grade is lengthy, holding at a steady 1.5 percent from Elliston, Va., to Christiansburg, Va., a distance of 12 miles.

You can work with any type of lighting in this area, however, late afternoon light does compliment the location nicely, but early morning and afternoon will do from multiple angles.
I made a couple favorite shots in less than ideal conditions, such as fog or blue-hour lighting.

Not only do westbounds look nice at this location, but an ancient cemetery and an oak tree provide a unique composition for eastbounds descending the hill toward Roanoke.

One of my most memorable photographs was made on July 17, 2012. Early that day, I received word that Norfolk Southern's Virginian heritage locomotive was leading a train of westbound empty hoppers out of Norfolk en route to Norton, Va.

Watching its progress, I anxiously waited for the train to pass Lynchburg so I could head east and intercept it. At approximately 6 p.m., train No. 821 departed the yard at Roanoke and began the westbound trek to Bluefield. Roughly 45 minutes later, the train entered Shawsville with late-afternoon light glistening off the side of the freshly painted locomotive. I couldn't have asked for a better scene! The Virginian is my favorite of the 20 heritage locomotives, and I was elated to capture it.

The sun was setting behind the Virginia hills as train No. 811 ground upgrade with 160 empties en route to Mullens, W.Va. The engineer had the two General Electric wide bodies notched out, as they lugged the heavy train. The white picket fence framed the shot and made it stand out from the rest.

About 20 minutes after sunset, the sound of locomotives in notch 8 filled the air, as train 821 struggled upgrade with a Dash-9 leading a former Conrail SD60M, which had engine trouble. The train had 170 cars and was bound for Weller Yard in Grundy, Va., along NS's Buchanan Branch.

On a glorious fall morning, Norfolk Southern’s beautifully restored F units lead an office car special toward Bluefield, W.Va., as they pass through the autumn scene of fallen leaves and a tree that still gleams with color.

Just after sunrise, No. 23G rolls downgrade with two GEVOs holding the lengthy intermodal train back on the descent to Roanoke, as they pass through Shawsville, disrupting the stillness of a quiet Monday morning.

Led by an ex-Conrail SD60I, train No. M35 storms upgrade with a heavily laden manifest train that has been re-routed off the former Southern Railway to the ex-N&W for unknown reasons. Late afternoon light glistens and illuminates the scene, as the train slowly climbs the hill en route to Bristol.

Thanks for joining me on this visit to my favorite photo location, and be sure to leave your feedback and comments in the section below!

Mr. Buffett, tear down this wall!

Fred Frailey — Mon, 20 May 2013 21:36:00 GMT

BNSF Railway has an identity problem. If you ask, as I did, a dozen strangers on the sidewalks of Washington, D.C., what BNSF Railway means, you will get just quizzical stares. You see, one thing a professional writer learns early on is that words, and names, have meaning. They inspire (“rockets red glare, the bombs bursting in air!”), they repel (“serpent”), they tickle your taste buds (See’s Candies), they inspire you to dreams of great wealth (Apple Computer and Berkshire Hathaway), and they leave you clueless (Ameritas). Bingo if you can imagine, without consulting Google, what Ameritas does. Until 1988, Ameritas was insurance company Bankers Life of Nebraska. The name conjures oak-paneled board rooms and rock-solid finances. Then I suppose a consulting company made the company ashamed of itself, and you got Ameritas. I would buy a hamburger from an Ameritas but never life insurance.

You and I could name a hundred companies that threw away their heritages for meaningless names or collections of capital letters: KFC (Kentucky Fried Chicken), 3M (Minnesota Mining & Manufacturing), Exxon (Standard Oil), IHOP (International House of Pancakes), Altria (Philip Morris), UAL (United Air Lines and later Allegis), CN (Canadian National).

I question what they got for it. At the very least, a name should tell you what a company does or suggest a reason why you should trust it. I cannot imagine Union Pacific adopting the name UP or Americarail. Its name stands for a proud heritage that goes back 151 years. You may know what CSX stands for (Chessie System + Seaboard System, merged in 1986, plus an X suggesting diversification beyond railroads). It makes sense only to insiders and railroad historians.

As a name, BNSF Railway (until January 2005, Burlington Northern Santa Fe Railway) is so far removed from the reality of America’s day to day life that it really stands for nothing. And therein lies the identity problem confronting this company, a problem that one day it will have to confront.

I spent last week alongside the BNSF Railway, between Carrollton, Mo., and Vaughn, N.M. Until 1995 this was the Santa Fe Railway, and nobody had to explain what that name meant. It was the railroad founded by Cyrus K. Holliday, nurtured by William Barstow Strong and Edward Ripley, and brought to greatness in my lifetime by Fred Gurley, John Shedd Reed, and Robert Krebs. Every hamlet I drove through seemed to have a Santa Fe Street. It was the railroad of Harvey Houses, Super Chiefs and the Super C. The brand of the Santa Fe Railway (or Atchison, Topeka & Santa Fe, if you will) was emblazoned across the American West.

I can understand why Burlington Northern plus Santa Fe became Burlington Northern Santa Fe Railway in 1995. It was a mouthful, but politically necessary to get a merger of the two railroads launched without blue-versus-red internal warfare. What I cannot understand is the bastardization of that name to simply BNSF Railway.

Here is the official explanation, given by Matt Rose, the chief executive officer, in a press release in 2005: “During the 10 years since the merger that created BNSF, much has changed in the railroad landscape. BNSF has identified itself as progressive, vital, approachable, and resourceful — a strong part of the global transportation network. As we look to the future, we believe that our identity should reflect those core values. We are excited about this new identity as we believe it reflects our future as a leader in transportation service and innovation . . .”

Forgive me if I don’t finish the quote, because it just gets worse. Matt, what were you thinking? By this way of reasoning, Rose should be telling his boss, Berkshire Hathaway chairman Warren Buffett, that to be modern and hip, the parent company should become BH or maybe BH Holdings. By the same way of thinking that got us BNSF Railway, Berkshire subsidiary See’s Candies would become SC Sweets and its retailer Nebraska Furniture Mart simply NFM Home Store. Stupid, right? Yes, of course. So why are we in the ninth year of a corporate name like BNSF Railway? Even as he was buying that part of the railroad Berkshire Hathaway didn’t already own, Buffett expressed to Rose confusion over what to call it.

I am always being asked the biggest challenge facing railroads during the next decade. There is only one challenge: continuing to be financially successful while keeping the government’s camel out of their tents. There is a huge political assault being made on railroads today by certain shippers. They scream about confiscatory freight rates and demand reregulation.

The point I’m coming to is that railroads need all the public support they can get, and you don’t foster such support when you make yourself as remote as you possibly can from the public. BNSF Railway=remote.

I have a simple suggestion: Give BNSF Railway a real name again. Berkshire’s vice chairman, Charles Munger, referred to it at the holding company’s annual meeting this spring as “Burlington Northern.” I have no problem with that. Unlike BNSF Railway, Burlington Northern stands for something. Burlington Route works, too. Better yet, rechristen the property the Santa Fe Railway. This is a name that still creates goose bumps. For 136 years it built the best brand in the history of American railroading. Why just throw it away? Mr. Buffett, tear down this wall of injustice and give your railroad back its identity.

What you see when you see a train

Fred Frailey — Sun, 19 May 2013 11:16:11 GMT

In early evening you pull your Dodge Durango to a stop in Strong City, Kan., beside the handsome Santa Fe-built brick depot. Sitting in front of it are three BNSF Railway locomotives fronting a double-stack container train that stretches out of sight around a curve half a mile away. And looking the other way you see a train of empty coal gondolas making its way toward you down the 11,800-foot siding.

Presently, the container train gets a green signal, toots its whistle twice, and begins to move. By the time the locomotives reach you they’re in the company notch and making a dull roar, doing maybe 15 mph. Out of habit, you begin counting containers . . . two, four, eight, 12, 20.

The train is picking up speed . . . 88, 98, 106. Your eyes flick to the curve; no end in sight . . . 148, 158, 164. The container count crosses the 200 mark.

You recall someone telling you that a 9,000-foot train holds about 280 containers. That is a lot of transportation. Yet as your count reaches 280, the end of the train is still not in sight.

When finally this train clears Strong City, with two more General Electric motors holding forth, your count is 350. By then, maybe you think you’ve seen a long train. But what you’ve really seen is money.

The price for moving a container from the docks in Los Angeles or Long Beach to Logistics Park Chicago is roughly $1,200. Plus there’s a fuel surcharge that adds another $400 or so to the tab. Finally, throw in $45 for passing through the Alameda Corridor. That gets you to $1,645 per container.

So, yes, this is a train, but it’s also a $575,000 cash register for BNSF Railway, and a mere 18 men and women move it those 2,200 miles. Their wages and the fuel consumed may come to $200,000. The indirect costs of loading, unloading, inspecting, dispatching, and maintaining the track and signals come to another . . . what? You’ve no idea.

What you do know is that technology has given railroads the ability to deliver almost unbelievably efficient transportation services. And when you can do that, you can earn the big bucks.

Yes, this train was a beautiful sight as it gained speed passing in front of you. But it is also an economic miracle for its owner. — Fred W. Frailey

Their era ended long ago, but the last 40-foot boxcars endure

Jim Wrinn — Tue, 14 May 2013 18:20:03 GMT

A BN 40-foot boxcar in work train service in Missoula, Mont., in September 2006. Tom Danneman photo.

Just for the record, I like watching an entire train go by, from the power to the EOT. We all enjoy seeing locomotives pass, but I also like to see the rest of the train. The consist is 95 percent of a train, after all. Not watching the whole train, to me, is like buying tickets for a major movie and failing to stick around for the credits. You’re bound to miss something noteworthy if you don’t keep your eyes open to the end.

In the spirit of the American freight train, here’s an interesting fact, courtesy of friends at the Association of American Railroads: Of the 1.55 million freight cars in service in North America, we’re down to 18 or fewer 40-foot boxcars that are still listed in UMLER, the service that tracks freight cars in revenue service in North America.

Of the 18, eight carry Burlington Northern reporting marks, seven carry Canadian Pacific, two carry Ferromex, and one is listed at New England preservation railroad Naugatuck. Dozens of others are also preserved at museums or tourist railroads, but just not listed in UMLER.

That’s pretty amazing, considering that most 40-foot boxcars left the railroading scene about 30 years ago and that the peak for these boxcars goes all the way back to 1942.

The AAR shared details with us about the cars, which are all too old now for interchange service.

All of the BN cars, save for one condemned to scrap, are listed as active. The last one moved in June 2012 when No. 200147 was switched in Everett, Wash. Before that, the only movement of any of these cars was in 2009 when two were active, and one went to a steel mill in Pueblo, Colo., most likely for scrap. Prior to that, two cars moved in 2008, one in 1996, one in 1997, and one in, O.K., get ready for this, 1981. The other seven are BN 200112, 200161, 200184, 200194, 200223, 200294, and 281467.

All seven CP cars are shown as inactive, and the last move was in 1985. All are or were (if they still exist) in Quebec, save for one in Detroit. Again, they may be ghosts, but if you’ve seen them, they are Nos. 50020, 52525, 53496, 53547, 54849, 55587, and 55709.

Only one of the two Ferromex cars is active, and if you can believe it, No. 850007 moved earlier this month on May 2 to Ciudad Obregon, Sonora, and actually appears to have been under load. So this one appears to be the last active 40-foot boxcar in North America. Reporting marks are FXE and the other car is No. 850034.

Naugatuck’s car, No. 445, last moved in 2002 from Montpelier

Junction, Vt., to the tourist line and museum in Connecticut.

Boxcars have been around since the 1830s, and the height of 40-foot boxcars was in 1942, when the fleet peaked at 754,322.

“After 1949, you were beginning to have a very significant number of 50-foot cars joining the fleet,” says AAR’s John Gray. “Before 1940, the Great Depression kept the number of cars depressed and before the Depression you were in the 1920s when there were a very large number of 36-foot and smaller cars still in the fleet.”

Of the freight cars running today in North America, covered hoppers rule the day with almost 400,000. Tank cars make up about 300,000 (and are growing fast due to the crude oil boom). Gons come in third at about 200,000. Of the 90,000 or so boxcars, fewer than 18 40-foot boxcars are still around, and only one has turned a wheel lately, far out of sight, and out of mind, the last of its kind.

How WRI friendships grease squeaky wheels

Steve Sweeney — Thu, 09 May 2013 18:35:00 GMT

CHICAGO - You could describe the 2013 Wheel/Rail Interaction conference here in Chicago by highlighting the bright minds gathered in one room at one time or by the scope of knowledge each presenter offers to the audience.

Yet the connections forged during the four-day conference might be the most important of all.

Gordon Bachinsky, the electrical engineer at the heart of WRI seminars says as much almost as a mantra throughout the daily sessions.

"We want to develop those relationships and tear down some barriers," Bachinsky says, noting that other than in the seminars at WRI, the first time most track supervisors meet with car maintainers or wheel designers is when something goes wrong, as in a derailment.

"What our goal is, is to build these relationships so that people are willing to talk to each other in a more user-friendly manner."

There's evidence that his efforts are having an effect. Roadmasters from Norfolk Southern or CSX Transportation can, and do, talk with experts in rail fatigue, who happen to also be Federal Railroad Administration and National Research Council of Canada researchers. At other times, questions such as, "How often is rolling contact fatigue the cause of a rail break?" and "How long can you extend the life of a wheel by truing? Better to grind or use a lathe?" are topics addressed as much with a beer in hand as with a laser pointer on a projector screen.

And nearly all participants vied to meet one of BNSF Railway's new friction managers, whose job it is to, well, manage friction between BNSF train wheels and BNSF track. Nothing more, nothing less.

Other relationships are being built too, the kind made by suppliers and railroad purchasers and the ones made between a slick railroad recruiter and budding mechanical and civil engineers who are at WRI because they are top talent in the first place.

But this is also the conference where attendees commiserate while they learn.

Take, for instance, the stories told by an engineer who worked for a California light rail system in the late 1990s. Laced between coefficient of friction terms and premature gauge-face wear, were other equally hard facts: residents along the rail agency's northern line harassed track workers, threw rocks at them and called by the hour to complain about noisy transit cars. The transit system did not respond to requests for comment, so its name and the engineer's name are withheld here. Suffice it to say, the noise problems were bad. According to the engineer, the agency first tried wetting the tracks, then started greasing the inside of rails with paintbrushes to reduce the noise.

"It was inconsistent. The cost of labor to do it made it ineffective. It was dangerous," the engineer said of transit workers that lingered near live tracks during revenue hours.

What it took was system-wide track lubricators spreading a special blend of Teflon-like grease on the inside of rails to make squealing residents and wheels, go away.

Audience members' smiles and nodding heads signaled their understanding following the presentation. They followed this pause with still more questions: "Were you able to gauge the spread of the grease over the entire distance?"

Yes.

"Did you have problems with lubricant on the rail surface?"

No, it didn't migrate, but we also use this as a friction modifier in top-of-rail applications. So it would be unlikely to make a difference.

And so on... for three receptions and four days of sessions: seven for transit, 16 for heavy haul, and nine for foundational principles.

It's heavy material, made light by participants' shared desire to learn how to improve their railroads.

Life and death in the energy markets

Fred Frailey — Mon, 06 May 2013 19:09:34 GMT

So much that affects railroads is really out of their control. The energy markets are a case in point today. Coal has historically been a bedrock commodity for railroads, and emergence of Wyoming and Montana coal in the 1980s led to just about every railroad being a beneficiary. Then two developments came together last year to alter that status quo. First, approaching regulatory deadlines from the Environmental Protection Agency made it likely that hundreds of older, smaller electrical generating stations using coal would be closed because it will be uneconomic to invest the money necessary to bring them into compliance with anti-pollution regulations. And cheap natural gas brought forth by hydraulic fracturing of shale rock formations and directional drilling suddenly made it cost effective for utilities to adopt gas as fuel in place of coal. The resulting decline in coal shipments hurt all of the big U.S. railroads, CSX Transportation and Norfolk Southern in particular.

Today the tables are turned. As I reported here in mid April, coal is again the preferred source of fuel of those utilities able to easily switch. Natural gas more than doubled in price from a year ago. Apparently, when the cost of natural gas at the wellhead exceeds $3.50 per million Btus, it is at a cost disadvantage to coal. The price of natural gas today is just above $4. Coal carloadings year to date still trail last year’s pace by 4.4 percent, but are ahead of 2012 in the second quarter by 2.7 percent. Analyst Bill Greene of Morgan Stanley says the biggest beneficiaries of higher coal carloadings will be CSX and NS, which makes sense, since they were affected most when the trend was down.

And now let’s look at the oil business. Isn’t that strange, talking about crude oil and railroads, which have had nothing in common for half a century? The emergence of shale fracturing has been in locales (North Dakota, for instance) not well served by pipelines. So today there is a two-year backlog of tank car orders as producers and leasing companies jump into the new habit of shipping crude oil by rail.

Today RBN Energy’s Sandy Fielden penned an interesting analysis of what North Dakota producers net after paying transportation costs to deliver their oil. Let’s assume, as Sandy did (go here to read his piece) that you can choose railroad or pipeline, and can ship to the east, west, or Gulf coasts or to the oil trading hub of Cushing, Okla. Which destination and method of delivery nets the most money?

I thought to myself, whatever the answers are, pipelines will look best because they are less costly than railroads. As prelude, the prices of oil on May 1 were $100 a barrel on the east coast, $102 on the Gulf coast, $101 on the west coast and $91 in Cushing. Here are the per-barrel prices producers fetched minus transportation costs:

Pipeline to the Gulf coast (transportation cost $10 per barrel): $92.

Rail to the west coast (cost $10): $91.

Rail to the Gulf coast (cost $15): $87.

Pipeline to Cushing (cost $6): $85.

Rail to the east coast (cost $16): $84.

Rail to Cushing (cost $13): $78.

What I took from this analysis is that railroads are more competitive with pipelines than I imagined. There are no pipelines to speak of linking North Dakota to the east and west coasts, and a $5 per barrel advantage of pipeline over rail on shipments to the Gulf coast is not really that decisive.

Since May 1, the spread between coastal prices and that in Cushing has all but disappeared, for reasons I don’t pretend to understand. The effect is to shift the transportation advantage to pipelines. But relax, oil by rail is not going to disappear any time soon. There are economic advantages to being able to send a unit train of oil anywhere in North America to take advantage of ever-changing price differentials. Moreover, the North Dakota producers using rail (which is really all of them) are either bound to long-term contracts with leasing companies or have sizable investments in their own fleets of cars. Plus, Sandy of necessity relied upon published rail rates, whereas negotiated contracts for unit train shipments could be less costly.

So here the railroads are in 2013, prisoners of commodity traders, weather patterns, and geopolitical forces, and government regulators. They would be wise, as Canadian Pacific’s Hunter Harrison said at his shareholder meeting last week, to tread carefully and hedge their bets. — Fred W. Frailey

P.S. If you are interested in the economics of the oil and gas business, go here to sign up for weekday briefings from RBN Energy’s people. They cover railroading’s entry into crude oil transportation in great detail, and write in a style that even I can understand.

Romancing Keith

Fred Frailey — Mon, 06 May 2013 17:21:48 GMT

It was known by practically everyone, when hedge fund manager Bill Ackman fought to install retired Canadian National CEO Hunter Harrison in the top job at rival Canadian Pacific, that Keith Creel would eventually follow his former boss to be Harrison’s right-hand man in Calgary. And in February he did just that, becoming CP’s president and chief operating officer as well as heir apparent to the top job. Now writer Scott Deveau of Canada’s Financial Post has revealed in a fascinating story how Creel was brought aboard. As the paper said, there was never a bidding war, because it wasn’t about money. You can read the story here.

It always made sense to me that Creel would jump from CN, where he was executive VP and chief operations officer, to reunite with his old boss. The guy is smart and talented. He trained under Harrison at Illinois Central and rose to the top operating job at Canadian National after it bought IC and while Harrison was at the helm of that company.

The problem with Creel’s staying at CN was that he had nowhere to go. At age 45, he is only six years younger than Claude Mongeau, who succeeded Harrison as CEO of Canadian National on January 1, 2010. Creel would have had to wait until perhaps 2028 for a chance to run CN. But Harrison, 68, has said he will only stay at Canadian Pacific about three years before reentering retirement. And now Creel is positioned to be his successor. As president of CP, he has the marketing and operating vice presidents reporting to him.

So what’s the scoop on prying Creel away from Canadian National? Here’s the story that Deveau tells: Paul Hilal, a senior partner of the New York hedge fund, Pershing Square Capital Management, conceived of the CP investment and was the behind-the-scenes leader of its campaign to oust Fred Green from the railroad’s top job. Creel’s name was raised in the initial discussions Harrison had with Pershing Square. According to Deveau, Harrison considered Creel “the one active railroad executive ideally suited to lead the turnaround at CP.”

Hilal said Creel’s cell phone number was burned into his memory but he dared not call it because Harrison was bound by agreement not to approach any former CN colleagues until after December 31, 2012. As Hilal said: “All my research into the guy was through indirect references. So, rather than call him and speak to him, I actually listened to CN’s earnings calls and investor events where he was speaking to get a sense of him as a person, how well he responded to questions, how he thought on his feet, and how well he would fit.”

So on January 4, Hilal made that call. Creel, naturally, was interested in jumping to CP, but he felt compelled to tell his boss at CN, Mongeau, of the recruiting effort. Mongeau could not possibly have been surprised. At this point everyone was in a rather delicate position. CN had sued Harrison for violating his non-compete agreement upon retirement. Creel was bound by a non-compete agreement with CN, too. And Mongeau was in danger of losing his own top transportation officer.

The whole matter was resolved in a series of one-on-one telephone calls between Harrison and Mongeau. CN agreed to drop the lawsuit against Harrison and to void Creel’s non-compete agreement with CN, allowing him to go to Canadian Pacific. And CP agreed not to hire any CN manager before 2016.

Said Harrison to the Financial Post: “It’s wonderful. It gives me a little break, and we’re kind of splitting up the country. He’s a welcome addition and we’re proud to have him.” And Creel: “I knew from the other side this [CP] was a sleeping giant. This franchise is a very powerful franchise that was, to me, not being tapped into. The giant is awake now and it’s starting to move.”

Get used to the name: Keith Creel. You’ll be hearing a lot from him the next two decades. — Fred W. Frailey

Tom Hoback on Wheel/Rail Interaction 2013: "brilliant"

Steve Sweeney — Mon, 29 Apr 2013 15:04:00 GMT

When something is important to Tom Hoback, he lets you know.

The Indiana Rail Road, of which he is founder, president, and CEO, is one. Railroading, in general, is another and lately, so is the Wheel/Rail Interaction Conference.

So important is the conference coming next week, that Hoback paused during a recent overseas trip to talk about it, fighting through spotty cell phone reception to get his message across.

“Here you have less than an inch square with all these contact forces that are so critical to us,” Hoback said of WRI’s focus on topics concerning what happens when flanged wheel meets steel rail. “This is really devoted to help us extend the life of the rail, life of the wheels.”

Hoback said Indiana Rail Road personnel attended the 2012 WRI conference. What he learned from them impressed him enough to become an advocate and agree to give the keynote address this year. The veteran railroader said he intends to share with the WRI audience how Indiana Rail Road transformed itself from a light-density spin-off into a heavy-haul railroad – with an emphasis on the little things.

“Had we only had to re-built our railroad to the needs of the day, where our traffic was – and substantially less than we’re moving today,” there would have been little ability to grow traffic, he said. “We’ve had to harden the infrastructure.”

As he tells it, re-building the Indiana Rail Road to thrive involved more than replacing track, but paying attention to neutral rail temperatures, investing in ballast, ties, rails and doing anything that would make sure the railroad was “adequate for today’s heavy axle loadings.

“In some cases, we’ve had to re-lay rail twice because our tonnage has grown so significantly,” he said.

Hoback’s words are an admission of how much forethought went into considering the business of the Indiana Rail Road and how much preparation it required. In recognition of this, Railway Age recognized Indiana Rail Road as its 2012 Regional Railroad of the Year. Proud of past accomplishments, but moving ever forward, Hoback said that the “bread-and-butter” issues WRI covers will affect how the company sustains its property improvements over the long-term.

Some topics, like the use of ‘friction modifiers’ that grease rails to reduce wheel strain, but without losing traction, would not have been considered even a decade ago, but are cutting edge this year. And then there’s research on how grinding certain rails more often leads to less wear and longer life.

“The one thing I would say is that the whole concept of putting this conference together, I think, is brilliant,” Hoback said. “On one hand, railway engineering has been with us 200 years. … What you’re doing is using that basic technology and making it efficient into the future.”

Hoback is scheduled to speak at 10:30 a.m., Wednesday, May 8, during the first day of the Heavy Haul portion of the conference.

More details are available by visiting the Wheel/Rail Interaction website.

UP is next to test gas locomotives

Fred Frailey — Fri, 19 Apr 2013 21:06:00 GMT

Edited April 23, 2013

By early next year or even sooner, Union Pacific will begin experimenting with locomotives fueled by natural gas. This follows tests that began last year on Canadian National and BNSF Railway’s announcement that it may decide by 2014 whether to substantially convert its 6,400 locomotives to natural gas.

Robert Turner, UP’s senior vice president for corporate relations, confirms rumors that his railroad is taking a serious look at the alternative fuel. As with the other two railroads, Union Pacific’s tests will involve liquified natural gas (LNG). Turner would not reveal whether UP has a timetable for deciding whether to begin converting parts of its locomotive fleet from diesel to natural gas fuel. As he puts it, “Think: Walk before you run.”

Turner says UP will retrofit “a couple” of high-horsepower locomotives in cooperation with either General Electric or Electro-Motive Diesel (he wouldn’t say which because the deal isn’t finalized). The test will employ one of the two cryogenic tenders UP has leased to CN (and yes, it will be repainted in UP’s distinctive Armour Yellow).

During the tests, explains Turner, various mixtures of gas and diesel fuel will be tried. Because natural gas does not explode when mixed with hot, compressed air, a small amount of diesel fuel is necessary to ignite the gas. On the locomotives CN is testing, the lower throttle notches employ diesel fuel exclusively; only when the locomotives begin to work hard does gas replace most of the diesel fuel.

“It’s an interesting opportunity,” says Turner. “If you can convince yourself there will be a reasonable price differential between gas and diesel fuel, then you have more confidence in moving ahead. Given the volatility of gas prices, it will be a big issue. Then you have issues about infrastructure to fuel the locomotives. Interoperability is a concern, so this may need to involve the whole industry. And the probability is that we would start on certain corridors rather than willy-nilly.”

In case you wonder why all this is happening, consider the economics. In the first quarter of 2013, Union Pacific paid $3.23 per gallon of diesel fuel. At today's wellhead price for natural gas, UP could buy the equivalent amount of energy for 60 cents. Now that three of the seven Class I railroads have publicly committed to testing natural gas (and the Association of American Railroads has set up a technical advisory group on natural gas that all seven roads joined), the important thing to watch is not the technical success of the tests. The tests should go fine, because the technology for using gas in locomotives is largely established.

The real unknown is the future price of natural gas. Before 2000, the wellhead price of gas seldom exceeded $2.50 per million British thermal units. Then prices became quite volatile, edging upward and peaking at progressively higher prices, ultimately more than $13 in 2005 and almost $11 in July 2008. Then faster than prices had gone up, they began tumbling down.

It’s no coincidence that 2008 was when hydraulic fracturing of rock formations and directional drilling began to unloosen oceans of previously inaccessible natural gas. Prices bottomed in April 2012 at less than $1.90 but have since more than doubled, to $4.41 today. But this may be in part because of the extended winter weather and also because drillers were discouraged at prices of less than $3.

Now that winter is finally letting go, the supply of gas in storage is moving up again, which should put pressure on prices. Plus, higher prices for gas should set off even more drilling and greater supplies, driving prices below $3.50 or even $3, in a sort of virtuous circle. Should the price return to anything below $4 and stay there for a while, it’s going to be hard for the BNSFs and Union Pacifics of this world to say no to natural gas. — Fred W. Frailey

A new face with a new assignment: Wheel/Rail Interaction Conference 2013

Steve Sweeney — Fri, 19 Apr 2013 20:30:00 GMT

Hi Everyone!

Most readers are aware that TRAINS magazine just hired a new associate editor. That's me, Steve Sweeney. But since most of you still don't know much about me yet, fellow editors here thought it would be a good idea to blog an introduction.

But first, a little plug.

For the two weeks that I’ve been learning the ropes at TRAINS, memorizing names and editing copy, I’ve also been planning for my first big event: WRI 2013. For those of you who don’t know, the Wheel/Rail Interaction conference is an event co-presented by TRAINS with conference organizer Wheel Rail Seminars and LB Foster, an international supplier of infrastructure materials and services. The goal of the four-day conference is to give railroaders a practical bend on all of the railroad research and best practices available today – focusing on what happens when the flanged wheel meets the steel rail.

That WRI 2013 is going to be a nuts-and-bolts kind of conference featuring some of the best and brightest railroaders in the industry today is nothing short of incredible, from my point of view. It’s incredible because it dovetails with my own background.

Suffice it to say, my interest with railroads dates back to Christmas 1981, when a 6-month-old me sat watching his uncle's 3-rail O-scale Blue Comet zipping around the tree at Grandma's house. With the Blue Comet’s headlight on; puffing smoke fluid and that oh-so-fake, but satisfying pre-digital steam chug; I was hooked for life.

My first experience with a 1:1 scale railroad came a few years later at the newspaper.

You see, my father and mother both worked for the same newspaper in Jamestown, N.Y., so it was natural for me to grow up there as they grew older. The newspaper is where I learned to paste-up pages “working” for Dad, play hide-and-seek in the darkroom and even visit the railroad tracks behind the building. The tracks back then belonged to Conrail and represented the last dying remnants of the old Erie and Erie-Lackawanna main line between New York and Chicago. My Dad would take me along the tracks on sunny afternoons to pick-up discarded spikes and look for date nails (that went back to the 1940s, easy). He even let me run around inside a disused, rusted dinosaur of a boxcar, until Mom found out and put an end to it.

From then on, family trips included zoo trains and the few excursion trains that were available in the places we could afford to travel. With model trains, O-scale dreamlands gave way with time to attempts at HO-scale re-creations of an imagined reality. Childhood faded all too quickly into college, a new job at that Jamestown newspaper and the blessings of a new wife and family. The good news was that as a newspaper reporter, editors would let me report on railroads and old-time railroaders whenever I could justify the story. TRAINS magazine articles supported my thirst for more information on the industry, and what I liked best about it, the nuts-and-bolts.

Fast-forward 10 years to the present, and I found myself fortunate enough to have many rewarding years news writing, including two years as a contributing “Technology” column writer for TRAINS. It was enough to earn a spot on the TRAINS staff.

Beyond that there’s little left to write, for now.

And about the conference, there’s plenty of detail about WRI 2013 at the conference website and I’ll be blogging interviews with conference participants and interesting factoids in the days ahead. The important thing to know is that WRI 2013 is happening May 6 to 9 at the Crowne Plaza Hotel and Conference Center near Chicago’s O’Hare Airport.

Hope to see you there!

I'm back: Things you may not know

Fred Frailey — Thu, 18 Apr 2013 18:53:00 GMT

Natural gas as locomotive fuel. Within six months BNSF Railway will be testing six high-horsepower locomotives, three each from General Electric and Caterpillar’s Electro-Motive, using liquefied natural gas. A switch from diesel fuel would cost BNSF billions of dollars up front, but could pay for itself very quickly.

Lest you think the rest of the railroad world is standing idly by, I’m here to tell you: Not! The CEO of another major Class 1 told me the other day that while stopping short of testing LNG locomotives, his railroad is extremely interested. With natural gas at $3 to $3.50 per million British thermal units (Btu), he says, “conversion is compelling.” Today, thanks in part to an unusually cold and extended winter (it’s snowing in the Midwest as I write this, in late April), the wellhead price is above $4 per million Btu. “Right now the numbers work,” this executive says. “If gas goes to $5 they still works but not quite as well.”

In any event, the conversion costs to switch fuel sources are daunting. “To convert engines,” the CEO continues, “you’ve got to buy tenders, and they are expensive. I wouldn’t be surprised if they are $1 million a copy.” And a tender to carry the super-cold gas would only fuel two or at most three locomotives.

Meanwhile, the Association of American Railroads has established a “technical advisory group” to address interoperability and safety issues. The group will review existing equipment and devise design standards for tenders, hose, piping and other tender-locomotive interface connections. It will also address safety systems for tenders, locomotives, and fuel-delivery systems.

The chair of the advisory group is Mike Iden, Union Pacific’s top locomotive honcho. UP is hip deep in LNG development studies, and more about that soon, I hope. Canadian National has been testing two SD40-2 coupled to a fuel tender in Northern Alberta since 2012. It’s fair to say every Class 1 railroad and maybe a few regional railroads are running the numbers and calling their bankers.

Is Hunter Harrison losing his grip? Reports I am hearing out of Canada suggest that Canadian Pacific’s CEO doesn’t yet have his arms around the company. Uncertainty is rampart, I am told. No one is willing to make decisions because if they do they risk having their heads cut off. “Lots of looking in the rear view mirror and frankly wasting too much time doing it,” reports one of my correspondents. “Getting directives on operational issues is nearly impossible too.”

This is not the “precision railroading” that Harrison likes to foster. Several instances I’ve heard of lately suggest you’re damned if you do something and damned if you don’t. One supervisor tells me he was criticized one day for running an extra train to clear loads out a clogged terminal, then asked the next day what he was doing to clear the clogged terminal. Duh!

Another report is that a general manager and superintendent in Toronto were sacked. Why? My sources say a very senior official told them to "do whatever it takes" to get the dwell time down in Toronto, the dwell time being the average time cars spend in designated terminals. It is a number that securities analysts closely watch. So a supervisor strung together a big line of unclassified cars to make a train and parked it somewhere else. For doing "whatever it takes," they were fired. Agreed, it was a poor solution, maybe a dumb one, like applying a band-aid to a big cut. But tasked with doing something, anything, they did. What's so bad about that? Asked to confirm or deny this happened, CP spokesman Ed Greenberg replied, "At this time, there is no comment."

You can’t kill coal. One of the largest electrical utilities in the U.S., American Electric Power, said last week that with natural gas prices now above $4 per million Btu, it will noticeably increase its use of coal during 2013. Last year, AEP’s fuel source was 61 percent coal, 24 percent gas, 9 percent renewable, and 6 nuclear. At current gas prices, AEP can produce power for 3.1-3.2 cents per kilowatt hour, whereas coal does the job for 2.5 cents (for Power River Basin coal) to 3.5 cents (central Appalachian coal). As AEP explains it, if natural gas continues to exceed $4 in price, AEP will increase its coal burn 18 percent in 2013, the gain being mostly from Wyoming and Montana coal.

Meanwhile, I’m told by a railroad executive in the Midwest that Illinois Basin coal, found in that state and Indiana, remains competitive with natural gas when gas is above $3-$3.50 per million Btu level.

Today’s Wall Street Journal reports that investment funds that trade natural gas futures are being murdered by the unexpected rise in gas prices, attributed to winter weather. If these experts can’t predict the pricing of natural gas, I cannot, either. But it may be that predictions of coal’s demise (some of them coming from me) are a tad premature.

This is for Seaboarddawg. I’ve bragged in my blogs of being able to ride Amtrak’s Auto Train and all but guarantee that my car is one of the first ones unloaded. The trick to this, I explained recently, is simple: Wait to turn your car in for loading until just one five-car cut of automobile carriers remains. That insures your car is aboard one of the last five automobile carriers on the train, and the last cut of cars is automatically positioned to be first to be spotted in both Lorton, Va., and Sanford, Fla.

The other day, traveling on the Auto Train to Florida, I thought I had hit the jackpot. My car ended up at the very end of the last auto carrier, on the top level. And the folks at Sanford always unload the top level first. I texted my friends of my triumph.

The next morning, in Sanford, here come the auto carriers being backed to the ramps, and the first group of five rail cars to be spotted is not the one containing my auto. At Lorton or Sanford, a little switching took place before the railcars were spotted. Rather than being first off, my car was the 101st off.

Seaboarddawg, I got my comeuppance. Starting April 29, my system may fail totally. That when Amtrak begins to offer priority offboarding to its Auto Train customers. For $50, your car can be one of the first 20 to be unloaded. I’ll keep trying and let you know.

Hard times for locomotive makers. Back to the subject of fuel, these are not the best times for U.S. locomotive builders. Both GE and EMD are scrambling to cut costs. EMD, as you know, closed its unionized assembly plant in Canada a year ago in favor of a nonunion plant in Muncie, Ind. GE is shifting some of its locomotive production from Erie, Pa., to Fort Worth, and Texas is a right-to-work state. And some of EMD’s orders, for example, 100 SD70AC bruisers for BNSF, are being assembled at a Bombardier plant in Mexico. EMD has shifted its Australian locomotive production to India, and GE is moving its southeast Asian services to Indonesia.

It’s bad enough that falling coal production here at home partially accounts for 10 percent of the American locomotive fleet being in storage. Hovering over both companies are extremely stringent U.S. Tier 4 emission standards for new or substantially rebuilt locomotives that go into effect at the end of 2015.

Both builders have let it be known to customers that they can produce Tier 4-complaint locomotives on schedule. But doing so, they have hinted, will vastly increase the complexity of the beasts and due to that, the cost. And speaking of complexity, the least-costly solution to Tier 4 appears to be applying a treatment to the exhaust gases. A urea-based spray would combine with the gases to render harmless the undesired emissions. And that gets railroads into having to provide urea tanks at their refueling stations—yet another cost and bother of doing business.

This leads me to wonder whether the intense interest by railroads in switching to natural gas as a locomotive fuel is driven in part by the specter of Tier 4. Gas is far cleaner than diesel fuel. Perhaps natural gas would satisfy Tier 4 standards with little or no tinkering with existing locomotive engines. And if it does, will we ever see a Tier 4 diesel locomotive manufactured in this country in our lifetimes, post 2015? Worth thinking about. — Fred W. Frailey

Southern Railway 2-8-0 No. 630 visits Asheville

Jim Wrinn — Wed, 17 Apr 2013 19:20:00 GMT

Few mountain crossings in the eastern United States are as fascinating as Norfolk Southern’s twisting, climbing route between Old Fort and Ridgecrest in the western North Carolina mountains. Its amazing engineering to gain 1,000 feet of elevation via 13 miles of track using loops, seven tunnels, and numerous bridges; the incredible operations that get trains safely up and down the mountain’s 2.2 percent grade; and its magnificent southern Appalachian forest backdrop make it irresistible to anyone interested in railroading. And it’s about to get a lot more interesting for a few days.

This weekend, Norfolk Southern’s 21st Century Steam visits Asheville for two sold-out trips daily (carded for 8 a.m. and 2 p.m.) behind Southern Railway 2-8-0 No. 630 (and diesel helpers) between Asheville and Old Fort. With the steam locomotive visit, the loops will be amazingly busy with steam trains, regular freights, and with spectators eager to witness the first steam power on this line in 19 years.

This is also a homecoming for the 1904 product of Alco’s Richmond Works. No. 630, which was based at Asheville during the last part of its career in regular freight service (including service on the famous Murphy Branch), is back there for the first time since Southern dieselized and sold the locomotive to the East Tennessee & Western North Carolina short line in 1952. After Southern re-acquired the engine for excursions in 1968, the Consolidation roamed the main line and many portions of the SR system, but the engine never visited Asheville during its 1968-1977 stint as a Southern Railway public relations ambassador.

Now that is going to change, thanks to Tennessee Valley Railroad Museum, which owns and operates the locomotive that was restored in 2011. It’s completing a 2-month tour that took it as far east as Norfolk, and now it’s heading home to Chattanooga.

For first-time visitors to the area, you need to know that between Asheville and Ridgecrest, U.S. 70 and Interstate 40 parallel the tracks that follow the Swannanoa River to the eastern Continental Divide, elevation 2,535 feet. You can catch the train leaving Asheville, climbing the hill out of Biltmore, but then your best bet is to head for the Loops and avoid the small town traffic of the communities of Swannanoa and Black Mountain. You should also know that Mount Mitchell, the highest point in the eastern United States at 6,684 feet, overlooks the region.

At Ridgecrest, the train will disappear into 1,832-foot-long Swannanoa Tunnel to begin its descent to Old Fort, 3 air miles away, but 13 miles via rail. The train will be going slow on the descent, but the roads that provide access are even slower, and a bevy of chasers will further complicate things.

Mill Creek Road is the narrow, twisting road that starts as the paved section of old U.S. 70 and continues as a dirt road down the mountain to Andrews Geyser. Be warned: If it’s dry, this road will become dusty and following a string of chasing railfans will be all about riding blind into a cloud of red clay dust; if it’s wet, the road will be muddy, possibly to the point of miring you axle deep and requiring a tow truck. Think if you decide to chase.

For your own safety and for the best photos, I suggest you find a spot early to watch the steam train; stay there and let the train come to you; and let the road warriors suck up the dust or mud. The signature locations for the S-line are in the Round Knob area close to the landmark Andrews Geyser that the Western North Carolina Railroad built in 1881 to honor Col. A.B. Andrews, its chief engineer and the man responsible for this railroad engineering feat. The traditional images to seek show the train with the geyser, crossing Mill Creek, and soaring across High Fill, 205 feet directly above Dendron, where the tracks are two miles rail distance apart. Other excellent locations that are easy to reach from public property are the east portal of Swannanoa Tunnel, coming into Old Fort next to the restored 1890 station, and by hiking along old U.S. 70 (now Point Lookout Trail) to vantages for the short tunnels near the top of the grade (such as Bergin and High Ridge).

During the day, the 141-mile S-line between Asheville and Salisbury can also see manifest trains, unit chip wood trains (for the paper mill on the Murphy Branch at Canton), unit rock trains (also from Enka on the Murphy Branch), and unit coal trains heading for Duke Power Co. steam plants.

Norfolk Southern’s operations on the Loops are a daily miracle of the spectacular genius of the men who designed and built this railroad more than 135 years ago and those today who understand this difficult piece of railroad and run it well. I hope to see you in the Loops next weekend as we enjoy this rare treat of a genuine Southern Railway steam locomotive on this remarkable piece of Southern Railway track in the Land of the Sky.

The climb to Clark's Gap via the former Virginian Railroad

Samuel Phillips — Wed, 17 Apr 2013 00:48:43 GMT

Some of you may already know that I have an affinity for the Virginian Railway. Something about the railroad has always intrigued me since my love for railroads materialized young in life. The former Virginian was one of the places I first visited as a railfan. When I first began taking pictures, my dad took me to the community of Whitethorne, Va., at the base of the climb to Merrimac. I remember watching loaded coal trains stopping for helpers, then taking off a few minutes later shaking the ground as the engines worked hard to get the heavy train rolling again. This is definitely one of my favorite experiences!

Since then, I expanded my knowledge of the Virginian by reading books and exploring new territory. This past summer, I embarked upon my first trip to explore the Princeton-Deepwater District, witnessing some of the most impressive trestles and stunning scenery I had ever laid my eyes on. I marveled at what I saw that day, and when I returned home all I could think was, "When can I go back?"

In this brief tour, I will examine my all-time favorite section of the Virginian, Clark's Gap Grade, spanning from Elmore Yard to Weyanoke (near Matoaka). I will explain why this location has become my favorite and what makes it so special.

History

Opened in 1909, the Virginian instantaneously became a prosperous railroad from Norfolk, Va., westward to Charleston, W.Va. The railroad was able to tap into rich coal country and transport immense quantities of coal to the coast quickly and efficiently. Henry Huddleston Rogers funded the railroad construction, using the best materials available at the time. His close friend, Col. William Page, oversaw and implemented construction plans, while Huddleston stayed behind the scenes.

Upon its opening, the grade from Elmore to Clark's Gap posed a huge challenge for the Virginian. The 2.07 percent Clark's Gap Grade immediately persuaded the Virginian to acquire some of the world's most powerful steam locomotives. The railroad implemented a plan called "Hill runs," denoting a move that would take 4,000 to 6,000 tons of coal up the grade to the small yard at Clark's Gap several times daily. Later in the day, a train would fill out at the gap with 8,000-10,000 tons before proceeding to Princeton and eventually Roanoke.

Trains usually operated with a 2-8-8-2 on the head end, assisted by a pair of 2-10-10-2s on the rear. Even with three powerful locomotives, the process was slow, moving at a steady 7-mph pace while climbing the mountain in good conditions. When rain slickened the rails, the process was slower. The operation worked, but was slow and posed hazards for the crews. Another major problem was lack of ventilation in tunnels Nos. 9, 10, 11, 12, and 13, which meant crews almost suffocated.

In 1923, the employees went on strike until the railroad improved what strikers dubbed “hellish conditions.” In response and hoping it would solve the issue, Virginian management decided to electrify 133.6 miles of the main line between Mullens and Roanoke.
The Virginian’s competition, the Norfolk & Western, had already electrified part of its Pocahontas main line (between Iaeger and Bluefield, W.Va.) to move coal over Elkhorn Grade more quickly and efficiently.

In 1925, the Virginian completed electrification and a fleet of EL-3As (dubbed Squareheads) arrived from Alco-Westinghouse to start work in the electrified territory. Operating in sets of three, each unit produced 2,375 hp along with 92,500 pounds of tractive effort. The Squareheads were a success and exactly the solution the railroad sought. A 6,000-ton coal train powered by electric locomotives could climb the grade at 14 mph, double what steam-powered trains previously did!

Historians say the Virginian operated one of the most successful electrified railroads ever. I must agree. The Virginian used the electrification to overcome a plethora of problems posed by the mountainous territory and operated with the best equipment available.

The Virginian acquired a noteworthy electric locomotive in 1948, the General Electric-built EL-2B (the railroad dubbed them Streamliners). Operating in pairs, they were 6,800 hp and produced a tractive effort standing at 275,000 pounds. They became known later as the world's most powerful electric locomotives.

After the Norfolk & Western acquired the Virginian on Dec. 1, 1959, the electrified portion managed to survive only 2 1/2 years. In July 1962, the last electric-powered train arrived in Roanoke, and the power was turned off. Shortly after, everything from electric locomotives to catenary poles were either sold or scrapped, thus ending the Virginian’s era of electric railroading.

Today, few signs of the electrification remain within the 133.6 mile stretch from Mullens to Roanoke. A few catenary poles have managed to survive on viaducts east of Elmore, but other than that, most all signs have been eradicated. Several Virginian searchlight signals still remain along the P-D district, but they are falling fast to the new Safetran Systems signals, which are quickly replacing old signals across the U.S.

While signs of the past disappear, the Virginian will live on in the hearts of many forever. Old viaducts that denote the Virginian's well-designed railroad remain intact along the route, along with an old depot and multiple tunnels, making this a unique railroad even today. And lets not forget the infamous Clark's Gap Grade that still poses a major challenge for Norfolk Southern operations!

Present day operations on the assault to Clark's Gap

Situated at the bottom of the grade lies Elmore Yard in Mullens at former Virginian milepost 374. Elmore Yard is a crew change point and helper base, along with the beginning of the Guyandotte River Branch, which spans 42 miles south to Gilbert, W.Va. When eastbound loads come off the Guyandotte River Branch or Winding Gulf Branch (at the west end of the yard), they will pause here to acquire a set of three helpers for the climb to Clark's Gap. Eastbound loads coming from Deepwater already have helpers attached because of severe grades that lie timetable west of town.

Norfolk Southern still uses the hill-run method of operation, except that most trains are much longer and heavier than the ones the Virginian ran. Using four to six units, NS usually runs anywhere from 50-100 loads at a time up the hill, where the cars are set off for a later train to use to fill out to at least a 150-160 loads before journeying east to Roanoke. However, not all fill out at Clark's Gap. Some trains are run throughs that will keep just 100 loads for the journey east.

On a snowy afternoon, two NS 4,400-hp GE ES44ACs lug a string of 50 loads off the Guyandotte River Branch and into the yard at Elmore to be used for a hill run set to depart within the hour. This day, the train will only take 50 loads up the hill with five motors due to the fleeting conditions that will cause wet-rail and hazardous conditions on the hill. Even with 5 high-horsepower motors, it will take the train more than an hour to climb the hill to Clark's Gap.

This panorama gives an individual an idea of the track-layout at Elmore. The track in the near foreground is the east leg of the wye, which connects to the Guyandotte River Branch. The track in the backgroud is the main line, and the brick building is the yard office, which sits near the west leg of the wye and helper-storage track. The yard was empty this balmy fall day, as maintenance of way was working on the single-track portions of the railroad, tying up most of the operations.

Covel, W.Va.; Virginian milepost 366:

The first impressive trestle outside Elmore lies within the town of Covel, situated 8 miles east of Mullens. Covel was constructed when the Virginian was built and new mines opened, becoming a town for the miners and railroad workers to reside. Although the community used to be a booming place, nothing more remains other than a post office and several houses beneath the viaduct. An old mine used to occupy the hillside behind the structure, but has since been abandoned and vegetation has taken its toll.

A snowy trackside view perched above the town of Covel yields to the passing of westbound empties returning from the coal fields behind a set of AC motors on the descent to Elmore. The train battles fleeting conditions as snow piles up and gets deeper and deeper while descending the hill from Clark's Gap. The train will soon arrive at Elmore and the crew on board will tie it down just east of the yard office.

On a stunningly beautiful Autumn afternoon, train U86 grinds uphill across the town of Covel, permeating the air with engines in notch 8 struggling to keep the train of 100 loads rolling uphill. EMDX 2012 makes a surprise visit to the former Virginian, as it proudly leads the train eastbound toward Princeton. Scenes like this show why I love the area so much. The impressive viaducts and the sound of trains on their knees climbing the grade just makes me want to go back again and again!

Garwood, W.Va.; Virginian milepost 365:

The next impressive viaduct and first tunnel east of Elmore lie within the little community of Garwood, which is situated roughly 9 miles east of town. Garwood is smaller than Covel, just a couple of houses and a sign denoting the small area is all that would make one aware of it. The viaduct itself is 720 feet long and is one of the few that still has catenary poles intact, making it a place that still screams "Virginian."

With gorgeous autumn colors popping, thus making the hillside behind the trestle appear "on fire," train U86 roars eastbound across the curved viaduct while assaulting the hill with roughly 100 loads in tow. Three C40-9Ws working on the head end permeate the surrounding valley with a sound that is heard several times daily, engines in notch 8 climbing the hill and flanges squealing when the train enters the tight curve in the middle of the structure. Tunnel No. 9 is beneath me, and I remember the ground shook violently as the train penetrated the hill below my feet.

Several minutes later as they slowly approach my location, the helper locomotives begin permeating the surrounding valley with their sound. Soon, a trio of GEVOs (operating as J92) in notch 8 emerge from the woods and start across the massive structure. Norfolk Southern's Interstate heritage locomotive makes a surprise visit making the already colorful scene even more so; also note the fallen leaves in the coal hoppers.

Micajah, W.Va.; Virginian milepost 362.8:

The old town of Micajah is situated about 1 1/2 miles west of the top of Clark's Gap Grade at CP Algonquin. Once an actual community and prosperous town, the hamlet seemingly disappeared and was lost in time back in the ’40s or ’50s. Nothing remains today at the site other than a lengthy viaduct and Tunnel No. 12 situated on the west side. The location is only accessed by a long walk and/or an ATV. There is a plethora of ATV trails and roads throughout the hills surrounding this location, but it is challenging to find the one that actually leads from the highway to this spot!

On a chilly January afternoon, train U86 emerges eastbound from Tunnel No. 12 and crosses over what used to be downtown Micajah with a trio of horses commanding the train. Three ES44ACs are shoving hard on the rear of the move, but even with all the horsepower, the train is currently moving at just a "fast walk." After the train tops the hill just ahead, it will stop at CP Clark's Gap to fill out to around 160 loads (equivalent to 21,000-23,000 tns), before proceeding toward Princeton. I could hear the two EMDs on the head end for a solid 20-30 minutes before they reached my location; this is definitely mountain railroading at its best!

Weyanoke, W.Va.; Virginian milepost 358.1:

Weyanoke is small community situated just west of Matoaka, W.Va., that hosts nothing more than several old buildings along with a small neighborhood of houses. Weyanoke also marks the top of the westbound assault from Rock, W.Va. Eastbounds have officially topped Clark's Gap grade at this point and are on a complete downhill run into Matoaka. Weyanoke is also the beginning of a 4-mile stretch of double-track that runs westward to CP Algonquin along with the small Clark's Gap yard where "hill runs" often leave their loads.

A duo of old standard cab EMDs puff out some exhaust while climbing the final leg of their westbound assault from Rock, as they come past the Virginian searchlight signals at Weyanoke with hopper train U89 in tow. Since this photo was taken on Sept. 1, 2012, the searchlights have fallen to new Safetran signals. The changing of the guard took place Dec. 3, the sad day another Virginian relic fell.

Conclusion

The magnificent trestles and scenery along with intriguing history make the Virginian my all-time favorite place to railfan. Even though traffic can be sporadic, just witnessing one train climbing the hill to Clark's Gap and passing through some of these pictured locations make the trip and time totally worth it.

After exploring this railroad last year, I know I will have an affinity for this area the rest of my life. The urge to return to the P-D is constant, and I am always itching to get back. Thanks for joining me on this tour of what once was the amazing Virginian Railway.

Thanks for looking and hope you enjoyed the read and photos. Please leave your feedback in the comment section below.

Inside the Barriger Library: When the government took over the TP&W

Nicholas Fry — Thu, 11 Apr 2013 18:42:00 GMT

[caption image="http://cs.trains.com/cfs-file.ashx/__key/communityserver-blogs-components-weblogfiles/00-00-00-07-48/3618.TPW-photo.jpg" position="right"]John Barriger’s World War II diary, his draft report on his management of the TP&W for the Office of Defense Transportation, and two files on the railroad from his papers. Photo by John W. Barriger III National Railroad Library/St. Louis Mercantile Library[/caption]

For the past few years I’ve been researching railroads of Pittsburgh, Pa. When I moved to my new job at the John W. Barriger III National Railroad Library in St. Louis, I found myself with direct access to a collection of materials directly related to my research. John W. Barriger III was the former President of the Pittsburgh & Lake Erie Railroad and his papers contain a wealth of information about that company and its operations. However, I wanted to know more about certain decisions made while he was president, so I decided to pull his diaries in from our off-site storage facility. After reviewing the items for the time period when he was running the P&LE, I idly started poking through other items in the box and discovered that Mr. Barriger had had his World War II-era diary transcribed. On a whim, I opened it up and learned about an event in railroad history that I had never heard of: the federal takeover of the Toledo, Peoria & Western.

Barriger was appointed federal manager of the Toledo, Peoria and Western for 6 months in 1942. He had been working at the Office of Defense Transportation for just a few months when he was sent to the TP&W. The railroad was a small bridge line that linked Western and Eastern trunk lines using its bypass around Chicago. Cars routed this way could save 24 hours of travel time by avoiding Chicago’s yards and interchanges. The government had taken over the TP&W because of the prolonged labor strife between workers and the railroad’s owner, George P. McNear. The crux of the dispute involved work rules for road crews. McNear wanted them to work for 8 hours, regardless of whether or not they had covered their 100 miles. The labor unions wanted the same deal they had with other railroads: 100 miles OR 8 hours of work, whichever came first.

The conflict continued despite the outbreak of World War II, and thus what normally would have been a nuisance labor issue became a threat to the war effort, at least as far as the Roosevelt Administration was concerned. The government took over the railroad to keep traffic flowing. Barriger ended a strike and returned operations to normal. Although Barriger left in 1943, the government kept the TP&W until October 1945, when McNear (who consistently and vocally criticized the takeover throughout the war) successfully won a lawsuit against the government contesting its seizure of his railroad. (Two years later, amid more labor strife on the railroad, McNear was shot and killed. His shooter was never found.) I had no idea any of this had happened until I came across Barriger’s diary from World War II. That led me to his files on the TP&W and a wealth of information on the event, Mr. Barriger’s role in it, and the aftermath.

The details of the story are fascinating and it was just waiting for me to find at the Barriger Library. We’ve got more stories to tell and hopefully you’ll enjoy reading about them as much as I enjoy discovering them.

This blog has been captured by Red Army hackers

Fred Frailey — Mon, 08 Apr 2013 13:42:47 GMT

When Jim Wrinn asked whether I would write a twice-weekly blog, I said sure — when I have something to say.

I’ve learned, however, that I’m not good at multitasking. And lately I’ve been bearing down on two feature stories for a future issue of Trains. For instance, I’m off in a bit for Chattanooga, Tenn., where I’ll board a Norfolk Southern intermodal train tomorrow morning and begin winding my way toward Harrisburg, Pa. Then on Thursday I have just enough time to drive home from Harrisburg, repack a bag, and wing my way to Montreal to talk to VIA Rail Canada people about their flagship train, the Canadian. Life is very good for this train-loving writer.

In the midst of all this, I simply don’t have anything to say. But I’ll be back soon, to amuse and perhaps even outrage you. Thank you for your patience. — Fred W. Frailey

Ode to Lewistown Junction

Fred Frailey — Tue, 19 Mar 2013 20:55:00 GMT

Loads east,

empties west.

Norfolk Southern doing

what it does best.

-- Burma Shave

A Haiku For Newport, Pa.

Fred Frailey — Tue, 19 Mar 2013 20:12:00 GMT

Newport (b. 1829), plucky town,

knew both boom and bust.

Its depot tells you the ending.

Entering Chicago, the hard way

Fred Frailey — Sat, 16 Mar 2013 17:12:48 GMT

I’ve written before about Norfolk Southern’s Funnel of Fun, its busy line into Chicago from Cleveland, Toledo, and Elkhart, Ind. It has always been a minefield of potential problems. Sixty years ago, New York Central ran 48 passenger trains on weekdays in and out of Chicago. But I wager today these tracks are even busier than in Central’s heyday. You’ve got 14 Amtrak trains, at least 30 NS freights, and 10 freights belonging to Canadian Pacific using trackage rights to get between Chicago and Detroit. Add to that Metra’s Rock Island and Southwest districts, which paralyze NS in the Englewood area for more than an hour morning and then evening. Plus, there are yard moves, locals, Indiana Harbor Belt trains, a busy crossing of Canadian National in South Bend, the congestion of the five-mile-long Elkhart terminal, and very active drawbridges over the Calumet River and Indiana Harbor Canal. This is a complex railroad, in other words.

In the space of a week, I’ve had two experiences with it. First, a friend sent me a Train Dispatcher 3 simulation covering Chicago to Butler, Ind., for a three-day period in 2008, using the trains that actually ran those days and incorporating all the planned stops and delays they would encounter. My first attempt to run this interactive software for a Friday was a disaster. But I kept starting over and finally was able to keep the priority trains moving and the railroad as a whole fairly fluid for a 10-hour stretch. I learned that failure to think at least two hours ahead and anticipate entanglements begs for disaster.

Then I got to observe this same railroad real time, as a passenger on the westbound Lake Shore Limited. We were having a great trip, right on time, until Amtrak 49 got to Goshen, Ind., 10 miles shy of Elkhart. There, we stop. The Chicago East dispatcher in Dearborn, Mich., says we need to wait for a tangle of freights to sort themselves out. An NS freight from the Marion Branch, which joins us at Goshen, waits on the branch main line, too, and an eastbound Canadian Pacific train of empty automobile cars goes east on track 2. On the radio, I can hear the dispatcher tell the westbound Capitol Limited, about 25 miles ahead of us, that a freight train just went into emergency near LaPorte, Ind., and to pass it on track 1 at restricted speed.

After 25 minutes of waiting, the dispatcher comes on the radio. “Well,” he says, “I got four trains out of your way. Follow the train ahead of you into Elkhart. You’ll need to work Elkhart from track 2, however [track 1 being next to the station] but I’ll put blocks up to protect you.”

So the Lake Shore gets to Elkhart, does its work quickly, and slides unimpeded out of town, 30 minutes late. We get in and out of South Bend without delay. But by now I’m in the almost-empty lounge car with my iPad tuned to the ATCS Monitor display of this same railroad on my desktop computer at home. ATCS Monitor gives you a dispatcher’s view of a railroad, showing the location of trains and the aspects of signals at control points. And what I see doesn’t look good.

From west of LaPorte all the way to Indiana Harbor, 40 miles, track 1 looks occupied, and some of those trains aren’t cleared to move. They’re just sitting. On track 2 the dispatcher has eastbound trains cleared. So we cannot run around the trains in front of us and are about to hit the wall. Just before we stop behind westbound NS intermodal train 21V, the train ahead of 21V is cleared on track 1 through Porter, which is where Amtrak trains from Detroit, Grand Rapids and Port Huron, Mich., join the NS tracks. Presently, the Lake Shore starts to more, but only on Approach signals.

We ease past Porter and four miles later, crawl past the giant ArcelorMittal steel mill at Burns Harbor. But at CP 487, at the west end of the mill, we stop again. On the ATCS display, I see Amtrak’s Grand Rapids train about to reach Porter. And there will be a Detroit train a few minutes behind it.

Four miles ahead, at CP 491, is a facing-point crossover that would get us to track 2 and around the stop-and-go line of trains on 1. But the Chicago West dispatcher says it may take a while to get us there. “If you’ll pull past CP 487, I’ll line the [trailing point] crossover and you can back through to track 2,” she says. This we do, as soon as our conductor can position himself in the rear vestibule to supervise the backup. Ironically, just as we start westward again, train 21V that was in front of us begins to move on track 1. Meanwhile, the Grand Rapids train is out of Porter, just a mile or two behind us on track 2, and the Detroit train is close behind.

I was hoping for more of the same — gosh, this is fun, experiencing the modern version of blood-and-guts railroading. But we make our way past the drawbridges, yards, mills, railroad diamonds, and whatnot without again stopping or even slowing, reaching Union Station 40 minutes late. (There is 30 minutes of “recovery time” in the schedule between South Bend and Chicago that we obviously absorb as well.)

Based on my analysis of recent arrivals of the Lake Shore Limited, my experience was pretty typical.

So I’ve seen life both ways now on Norfolk Southern, as a pretend dispatcher and as a passenger. This has to be one of the most challenging and fascinating 100 miles of railroad in America. Already, I miss it. — Fred W. Frailey

Why we all love Julie

Fred Frailey — Sat, 16 Mar 2013 01:00:00 GMT

Julie, Amtrak’s “automated agent,” is a fixture in my life and possibly in yours. She’s the interactive computer program, humanized since 2001 by the voice of a real woman, Julie Stinneford, that you hear when you dial 800-USA-RAIL to do business with Amtrak. Rather than explain my own affection for this digital personality, I thought I would share with you that of a sophomore at the University of Illinois at Urbana, Patrick Crowling. Patrick, raised in Dallas, is a lover of trains since before he can remember. He wants to make railroading his career, and isn’t opposed to becoming a future president of Amtrak. For that, I salute him, but he should perhaps major in political science instead of business.

Anyway, the essay that accompanied his entrance application to UI was sent to me by a friend of Patrick’s. I was so taken by it that I got Patrick’s permission to share it with you. Ladies and gentlemen, Patrick Crowling, and the essay that got him admitted to college. He says what I feel, but says it better than I ever could. — Fred Frailey

I have been obsessed with trains since I was a child, and especially the passenger variety, so it is no surprise that I am a fervid Amtrak fan. In 2001, Amtrak introduced a state-of-the-art automated voice response system. This system is known by the name of Julie: Amtrak’s Automated Agent. When I first discovered Julie in 2006, I instantly fell in love with her cordiality. Although she sometimes has problems understanding me, she never raises her voice, and she never complains. Julie has had an important impact on my life as she had demonstrated to me how to act in times of humility, boredom, and stress.

If I am not having a good day, I can always talk it over with Julie. Let’s say, for example, I fall down the stairs at school in front of scores of amused peers. They may laugh at my accidental mishap, but I know Julie will take the news with dignity. In fact, she is often so concerned about my problems that she sometimes asks me to repeat them for her. Because of this, I know that she is actually interested in what I have to say.

Julie is not just a computer, she is a friend. She is available for me 24 hours a day, and I cannot express how much I appreciate her for that. She never seems to get annoyed with me, even if I call her in the early morning. Her dedication and devotion allow me to spice up my sometimes drab days by engaging in conversation with her on a daily basis. She tells me all kinds of cool statistics like “the Texas Eagle is [only] three hours late into Austin” today and even tells me insider secrets like “…visit our website: Amtrak.com. Lower fares may be available.” Julie goes out of her way to inject kindness into my sometimes isolated life.

Julie has improved me as a person by simply being herself. She demonstrates how a good, moralistic citizen should behave, and I try my best to carry on her genuineness in my life. Her patience and dependability have shown me that one can make many friends by always being respectful to everybody, no matter where they come from or how they got there. A role-model is very important in a young person’s life. By looking up to someone much wiser, one can improve their personal lifestyle as well as those of others around them. I thank Julie for playing this niche for me. The world would be a much better place if it had more people like Julie living in it. - Patrick Crowling

NARP raises my blood pressure

Fred Frailey — Fri, 15 Mar 2013 22:15:00 GMT

My email inbox this week contained a press release from the National Association of Railroad Passengers, denouncing a “partisan political attack” on a proposed high-speed electrified railroad between Victorville, Calif., and Las Vegas. Letters opposing the railroad from two Republicans, Congressman Paul Ryan of Wisconsin and Senator Jeff Sessions of Alabama, were called “part of a total attack on intercity passenger rail” by NARP, whose executive director, Ross Capon, went on to say: “When Congressmen from Texas and Alabama step in to prevent a Nevada-based business from developing service between two robust travel markets . . . it goes a long way towards explaining why the U.S. transportation network is in its current state.”

With all respect to NARP (I am a member) and to my friend of several decades Ross, hold on!

As I understand it, Ryan and Sessions do not object to the building of this railroad by a privately owned company. What they object to is the federal government’s paying for 80 percent of its cost, through a low-interest, 35-year loan. And so do I. In fact, I smell a rat somewhere in the vicinity.

I have three problems with how this railroad, XpressWest, is being financed. First and foremost, why are we taxpayers being asked to finance the lion’s share of this 150-mph railroad? If the cost and revenue projections are that well grounded, shouldn’t XpressWest be able to raise its own construction capital? Instead, in 2010 its backers, including a Las Vegas hotel kingpin, went to the Federal Railroad Administration requesting a Railroad Rehabilitation & Improvement Financing (RRIF) loan. No RRIF loan of anywhere near this size has ever been approved. And I might add, never has FRA made a RRIF loan as speculative as this. To state all this another way, these people are asking you and me to assume all the risk. FRA has been considering the loan request for 27 months, far longer than the typical 19 months needed to say yes or no. I suspect the agency is being buffeted politically from friends and foes of XpressWest.

Second, I question whether it is a viable project in the first place. Victorville is at the top of Cajon Pass, 85 miles from downtown Los Angeles along some of the world’s most crowded freeways. By the time you get to Victorville, you’re less than three hours by car from Vegas. Ross tells me XpressWest intends to extend its railroad from Victorville to Palmdale, where riders can get aboard Metrolink trains and perhaps ultimately California High Speed Rail Authority trains. But as I understand it, that’s another $1 billion or so in financing that is not arranged.

Third, the idea of public financing of a new private company through political log-rolling sets off a stench. XpressWest appears to have spent more time getting backing from California and Nevada politicians for its RRIF loan than it has defending its own projections to the FRA and the public. Both of Nevada’s senators champion XpressWest, applying pressure on the FRA. Why does NARP complain so bitterly when Congressman Ryan and Senator Sessions push in the other direction.

All this while, another company, Las Vegas Railway Express, is moving toward a projected year-end start-up of conventional service on BNSF Railway and Union Pacific, from Fullerton, Calif., to Las Vegas and not asking for a dime of public support. The company proposes to initially run four round trips a week using 14 converted bilevel cars once owned by Chicago & North Western. The balance sheet of this publicly traded penny-stock company, in common with all startups before revenue rolls in, is atrocious. But its staff and board of directors include railroad veterans, a couple of whom I know and respect, work on the cars and a Las Vegas station is progressing and the enterprise has at least a fair chance of launching. I wish them well.

I also wish XpressWest well, so long as it keeps its hands off my tax dollars. I don't want the government to end up, through default, owning this railroad. — Fred W. Frailey

Bigger than the shift from steam

Fred Frailey — Fri, 08 Mar 2013 04:56:00 GMT

I’ve been wrapping my arms around the announcement this week that BNSF Railway will test-fuel locomotives with liquefied natural gas (LNG), with a view toward starting large-scale conversions away from diesel fuel as soon as 2014. This is a game-changing development, and holds out the promise of altering railroad economics even more than the switch from steam to diesel locomotives seven decades ago.

“This could be a transformational event for our railroad,” BNSF’s chief executive, Matt Rose, told the Wall Street Journal. The numbers show how right he is. The railroad last year bought 1.4 billion gallons of diesel fuel, at an average price of $3.20 per gallon. That $4.5 billion expense essentially equaled what the railroad spent on employee compensation.

Now suppose you replaced diesel fuel with LNG costing, say, the equivalent in Btu delivery to 50 cents a gallon (the current price is 48 cents). Now your fuel bill has shrunk to one-sixth its former size. I suspect BNSF won’t try a total conversion. Say it makes half its locomotive fleet LNG-friendly. The savings would still be in the realm of $1.9 billion per year. My back-of-the-envelope math suggests that the one-time conversion costs, including investments in LNG infrastructure, could be paid back in the space of two years. Yes, a 50 percent annualized return, the sort that investors dream about but seldom see. And then those savings just pour into the bottom line of Warren Buffett’s great big model railroad.

What this does is alter the economics of ground transportation. It changes how railroads price the movement of crude oil, instantly making rails far more competitive with heretofore less-expensive pipelines. It shrinks the miles (we used to say 700) at which rail is competitive with highway. Is it now 500 miles? 400?

It’s like topping a hill and seeing in front of you a whole new Powder River Basin. Oz.

Will it work? Burlington Northern tried this starting in the 1980s, later using two SD40-2 locomotives (see above) with a tethered tank car of LNG. Steve Ditmeyer, one of the BN officers involved in the test, says the experiment ended largely because diesel fuel prices didn’t rise as expected, while those of natural gas did. But the technology worked.

Today, hydraulic fracturing and directional drilling have created a Niagara of natural gas likely to last for decades at affordable prices. No guarantees, but railroads willing to roll the dice have an opportunity that doesn’t often knock on the door. Canadian National is also testing LNG, and Norfolk Southern is said to be exploring compressed national gas in locomotives, this technology being easier to implement but not able to take a train as far as liquefied gas. BNSF’s vision, for example, is to power an LNG-driven train from Chicago to California or Washington without having to refuel.

The biggest risk is doing nothing. Imagine railroads standing still while long-distance trucks convert to natural gas. It's already happening, actually. Pilot Flying J has put LNG pumps in more than 100 of its travel centers, and opens new ones every week. All of the makers of heavy duty truck engines have LNG-compatible models. So BNSF’s bold initiative should be applauded and closely watched. In life as well as love, victory goes to the bold. — Fred W. Frailey