Category Archives: Railroad Current

Regional Plan Association rail overhaul dead without Gateway Project

The Regional Plan Association’s massive overhaul plan of the area’s commuter rail system is stillborn without the $13 billion Gateway Project, the organization says.

The ambitious plan that would provide Rockland a one-seat ride in Manhattan and the same from White Plains to downtown Brooklyn was one of the most notable recommendations in the RPA’s latest regional plan. Much of the first phase counts on Gateway’s new rail infrastructure, new Hudson River tunnel and existing tunnel rehabilitation.

But federal funding for that project is now in doubt. And without that money, the outlook is grim.

“It doesn’t happen,” RPA Senior Vice President and Chief Planner Chris Jones said in an editorial board meeting with the Journal News/lohud Thursday morning.


CSX, STB and “confusion to the enemy”

Railway Age . com

At CSX over the past 12 months, there has been a series of tumultuous events infusing investors with paroxysms of “what next” worry and propelling the stock price on a roller coaster ride*:

• An investor shake-up of the board and departure of President and CEO Michael J. Ward.

• Recruitment of North America’s most controversial CEO, septuagenarian E. Hunter Harrison, with a mandate to implement his storied Precision Scheduled Railroading so successful at Illinois Central, Canadian National and Canadian Pacific. It had never been attempted on a railroad so spaghetti-like as CSX. Harrison died unexpectedly during a rowdy transformation, further agitated by his cashiering of many experienced officers and furloughing of more than 4,000 workers.

• A payout by CSX of more than $150 million as part of Harrison’s recruitment package – most of it to him, but also to activist hedge fund Mantle Ridge.

• A rail service collapse, following Harrison’s arrival, so severe that Congress took note and shippers compared it to prior post-merger meltdowns.

• Installation, following Harrison’s untimely death, of Harrison disciple and confidant James M. Foote, whose well-respected four-decade rail background is primarily in marketing, sales, investor relations, labor relations, and communications and law. Foote, however, brought aboard as his operations chief, Edmund L. Harris, another former Harrison confidant and assiduous student of Harrison’s Precision Scheduled Railroading.

• Assurances to the STB from Foote in early January that the distressed transition to Precision Scheduled Railroading was showing “a remarkable rate of positive change,” notwithstanding customer protestations to the contrary.

• And comes now, in the midst of this turmoil, reports of CSX freight rate increases, otherwise unattainable absent the existence of captive shippers; and a report that it is reviewing a plan to sell almost 40% of its 21,000-mile railroad (some 8,000 miles). STB officials say they were not informed prior to media reports. CSX denies it is 40%, but does not provide a number other than saying it has “put forth two rail segments near-term for a potential transaction” and “continues to evaluate its network [and] will likely identify non-core segments of the network (see CSX statement at the end of this blog).

• The line sales presumably would be to existing Class II and Class III railroads, and to equity investors who would create new small railroads.

(There currently are seven Class I railroads, including CSX, which have annual revenue of at least $447.6 million; 21 Class II railroads, whose annual revenue is between $35.8 million and $447.6 million, and 546 Class III railroads whose annual revenue is below $35.8 million. CSX’s annual revenue is $10.7 billion, slightly more than Norfolk Southern and below the almost $20 billion of the largest Class I railroad, Union Pacific.)

Failure to have communicated to the STB its review of such extensive line sales is enquiringly troubling, not so much that the STB has oversight of such sales, but because the STB instructed CSX to provide detailed updates on restoration of reliable service, including the current state and resilience of its rail network. A Jan. 3, 2018, Foote-signed CSX update to the STB said CSX does “not foresee any significant operating changes at this time.”

Perhaps CSX has advance and credible knowledge of pending White House nominations to the three vacant seats on the Surface Transportation Board (STB), providing it brazen confidence of a laissez-faire regulatory environment.

Allegations of regulatory capture were persistent during the 1980s following partial economic deregulation of railroads. The late Carl Bagge, when president of the National Coal Association, called STB predecessor Interstate Commerce Commission (ICC) a “wholly-owned subsidiary of the Association of American Railroads.”

Perchance, Foote is trapped in that era. Before emigrating to Canadian railroading, he was an Illinois Central Railroad officer when the ICC was steered by a so-called “gang of three” deregulation purists – Republicans Frederic Andre, Heather Gradison and Malcolm M.B. Sterrett. Then-Burlington Northern Railroad Chairman Walter A. Drexel was so alarmed at the pace by which shipper protections were being dismantled – “excessive and unwarranted,” he said – that he feared a reregulation backlash by Congress.

Wherefore art thou, STB?

Just possibly, Foote and his legal team are risk takers, and the odds may well be on their side. Indeed, the STB’s tepid – in shipper eyes – response to the CSX service calamity consisted of a public hearing at which Harrison spoke, unspecified warnings should improvements not occur, and a demand for written reports.

Captive shippers – those lacking effective transportation alternatives to rail, and thus subject to railroad market-power abuse – who previously spent millions of dollars in congressional PAC contributions seeking regulatory reform, and millions more seeking redress before the ICC and STB, could be on the verge of a new campaign seeking what railroads consider “reregulation.”

Captive shippers are becoming increasingly unsettled. They have ceased filing freight-rate complaints with the STB. They say that notwithstanding prior STB-ordered reparations, they are minimal, and the cost of recovery is excessive. A recent rate challenge by Consumers Energy, asserting rail rates exceeding 500% of variable costs – market dominance is assumed at 180% – resulted in a STB decision reducing that percentage into the 400s, rather than the 200s the utility sought.

In the 2015 Surface Transportation Board Reauthorization Act, Congress directed the STB to work toward developing a less expensive alternative to its Stand-Alone Cost (SAC) test for determining rate reasonableness. A SAC case requires that a shipper spend years and millions of dollars designing an elaborate, hypothetical railroad for cost comparison purposes. So far, the STB’s review efforts consist of a consultant’s report prepared two years ago that was sent to paper recycling.

Curiously, in the most recent Consumers Energy rate case, where the SAC test was used, the STB’s two current board members, Acting Chairman Ann Begeman and Deb Miller, wrote separate expressions criticizing the cost and complexity of the SAC. Yet in 12 months since Begeman became acting chairman, she has failed to follow through on that 2015 congressional directive. In fact, there are multiple other rulemakings sought by captive shippers that are languishing at the board, some since 2014.

Begeman and Miller told Congress, in a quarterly report of STB activities, that they are awaiting nomination and Senate confirmation of new members to fill the three empty seats. There is, however, no quorum requirement in the STB statute, meaning Begeman and Miller could have – or could now – move stalled cases forward.

And this returns us to the CSX gambit of raising rates on captive shippers amidst service failures, and overlooking notifying the STB of its consideration of a major restructuring of its railroad. A recent shipper survey reported CSX service as worst among Class I railroads, yet CSX raising its freight rates more aggressively than other railroads, leading to new shipper allegations of market-power abuse.

As for the line sales, how significant would an 8,000-mile reduction in CSX’s 21,000-mile system be? Consider that when Conrail was created in 1976 out of six Northeast insolvents, the total route miles of the six were reduced from 24,000 miles to 17,000, or 1,000 miles fewer than CSX is now considering jettisoning.

While regulatory barriers to line sales are very few, one CSX could face are shipper objections should sale terms include so-called paper barriers, which prohibit an acquiring railroad from interchanging traffic to CSX competitors. As has occurred before, shippers could form a bothersome alliance with already aggrieved rail labor that could trigger congressional interest.

While the STB is an independent regulatory agency, its budget is approved by Congress; and the Senate Commerce Committee, chaired by John Thune (R-S.D.), who has shown concern with past allegations of railroad market-power abuse, is the first step in the confirmation process for STB nominees.

In attempting to understand the “what, why and how” of the current CSX/STB relationship; and, the “warp and woof” of the broader railroad/STB rapport, perhaps it is appropriate to recall the legendary evening cocktail toast of the fiery Edward G. Ball, who once ran the Florida East Coast Railway: “Confusion to the enemy.”

The line sale process

For those with an interested in the STB approval process for line sales by Class I railroads to smaller railroads, following is a primer:

Class III railroads

A Class III railroad that will remain a Class III after the proposed acquisition files a simple “notice of exemption” from regulation at the STB, which becomes effective in 30 days. Unless the STB acts to stay, revoke or reject the exemption, no affirmative action of the agency is required for the authority to go into effect. A notice is published in the Federal Register.

However, if the annual rail revenue of the Class III after the proposed acquisition will exceed $5 million annually, the applicant must also provide a 60-day advance labor notice to employees and unions of the selling railroad (although there is no requirement in such transactions for income protection of adversely affected workers). This notice effectively extends the timeline by 30 days.

A Class III railroad that will become a Class II railroad as a result of the proposed acquisition has an additional step to take at the STB – it must file a “notice of intent” 14 days before its notice of exemption, and its subsequent notice of exemption becomes effective 45 days (rather than 30 days) after filing, a total of 59 days. And as becoming a Class II railroad means its annual revenue would exceed $5 million, it also must provide a 60-day notice (but that is only one more day than the process otherwise requires).

Class II Railroads

Class II railroads face a slightly different procedure. They must file either a “petition for exemption” or an application to acquire an additional rail line. A petition for exemption must be decided within a year of its filing, and must include the 60-day notice to labor as mentioned in the Class III transaction, above.

Employees dismissed following the Class II railroad transaction are entitled to a one-year severance payment payable by the seller.

Holding Companies

A short line holding company creating a new small railroad utilizes an exemption authority nearly identical to that of existing Class III and Class II railroads. It petitions for “continuance in control” authority to control its existing railroads and the new entity once the latter becomes a carrier.

If the new railroad doesn’t connect with any of the holding company’s existing small railroads, the continuance in control is governed by a class exemption that becomes effective 30 days after the holding company files a notice at the STB.

If they do connect, the holding company files an individual petition for exemption. The holding company could also use an existing Class II or Class III subsidiary to do the transaction in one step.

While there are no outright prohibitions on line sales to Class III or Class II railroads, the existence of paper barriers could be an issue to be seized on by shippers and rail labor.

Editor’s Note: CSX emailed a response to this article, reprinted below.

“Consistent with the tenets of our scheduled railroading strategy, CSX is continuing to evaluate every aspect of the company’s network and operations to be sure that all assets are maximized for efficiency and add value to our company’s long-term business needs. Based on an initial review of our network, the company has put forth two rail segments near-term for a potential transaction: the Decatur and Danville Secondary Subdivisions in western Illinois and the Tallahassee and PA Subdivisions in the Florida Panhandle. CSX is communicating with its customers on these rail lines, as well as union representatives and employees. Throughout this process, CSX is committed to working closely with regulatory agencies reviewing and approving transactions, and we will coordinate with buyers to facilitate a safe, smooth service transition that minimizes impacts to customers and allows for long-term growth on these rail lines. As CSX continues to evaluate its network, the company will likely identify additional non-core segments of the network and it will work with interested buyers at appropriate intervals.”

NY-NJ port grapples with rail delays

In a missive to port users outlining the problem, the port said it is working with CSX Transportation and Norfolk Southern Railway to clear the rail backlog.

Well! It is about time to admit a problem.

In a recent WebPage, we have been careful not to include the Port of New York & New Jersey in our planning. HERE IS WHY.

A New Hudson Bridge, Revived Beacon Line, HYPERLOOP and More

Enthusiasm for ‘maglev’ train between D.C., Baltimore mounts — as does opposition

Washington Post

Opponents of a proposal to build a high-speed train line that could make the trip between Washington and Baltimore in 15 minutes are asking state and federal officials to kill the project.

Northeast Maglev, the Washington-based company behind the project, says the 40-mile “superconducting magnetic levitation train system,” commonly called a maglev, would be the first leg of a line between Washington and New York — a trip that could be done in an hour.

Proponents say the project would ease travel in the congested Interstate 95 corridor, but many residents are concerned about the environmental impact and the homes that would be taken to make way for the line.

And, with limited public funding available for transportation projects, opponents say, any taxpayer money that would be used for the maglev would be better spent improving the existing rail infrastructure.

“We don’t believe it is economically viable. We don’t see the ridership. We don’t see the revenue,” said Dennis Brady, a Bowie resident who has organized a grass-roots group against the project.

New York: Metro Transit debt makes profits for Wall Street

New York — The Metropolitan Transit Authority here is on a collision course for a financial crash. It just approved a $1.9 billion capital project to build a third track for the Long Island Railroad, which mostly benefits suburban commuters and the bourgeoisie.

Some MTA board members at its Dec. 13 meeting feigned concern about approving yet another project that may run over cost projections and require borrowing big money. While board members may publicly fret about rising debt to the banks, they aren’t actually fighting on behalf of the working people who use the system.

The Second Avenue Subway project broke ground in 2007 with a projected cost of $3 billion. A decade later, it has now sucked up $11 billion — and construction of the line’s second phase hasn’t even begun.

These overruns require the MTA to take on more debt. The public agency already owes almost $40 billion to the banks, and has only been making interest payments, instead of paying off the principal. The MTA — with loose fingers in its wallet — might very well be the best customer the banks could wish for.

The first subway line in New York City was built in 1904 by capitalist bosses to transport workers who were living farther and farther away from the expensive city center where businesses were located.

But not so much good-paying work exists anymore in the city. The evolution of capitalism demands that work be automated to increase “productivity” — yielding profits from more work by fewer workers.

“The bosses really don’t need tens of millions of workers anymore,” said Renée Imperato, a disabled veteran and organizer with the People’s MTA. “Why feed us, why educate us and why house us?”

And why transport us?

People’s MTA fights for riders and workers

Capitalism leaves our class with a stark future. That’s why PMTA has sprung up. The original members of PMTA, under the banner of NYC Workers Defense Committee, got involved in struggles around transportation in May. Transit worker Darryl Goodwin had been harassed and wrongfully arrested on May 16 by an on-duty cop, one of hundreds hired by the MTA. The agency supports “broken-windows” policing — the theory that arresting people for minor issues like fare jumping will deter major crimes. However, such wrong thinking will not fix what’s wrong with the trains.

Goodwin died Aug. 16 before his trial. His union comrades feel strongly the stress of the arrest contributed to his declining health. Goodwin’s good name was restored Dec. 15, after pressure by Transport Workers Local 100, when a Manhattan judge posthumously dismissed criminal charges against him.

While advocating for Goodwin at MTA board meetings, WDC members encountered other militants. Seeing the activism around transportation, WDC members realized they needed to broaden their mission and create a united front. That was how the PMTA was born. Over the summer, the group’s activities included responding to massive delays and derailments in the subways.

Determined to fight for the working class, PMTA’s demands include reduced and free fares, the addition of elevators in every subway station to comply with the Americans with Disabilities Act, more buses and trains per hour, an end to racist policing, and rights and justice for transit workers. While access to affordable transportation is being taken away from New York City workers, Trump signs a bill to spend $700 billion for more wars.

Tony Murphy, a PMTA organizer, sees larger forces at play as the 113-year-old subway system crumbles. He told WW: “The MTA board is proving itself capable of only funneling money to Wall Street, the same class forces that are getting billions in tax breaks from the Trump administration.” Murphy added that the MTA board needs to be replaced with a board of workers who ride and operate public transportation.

The PMTA has rallied in front of MTA headquarters monthly before heading to the 20th floor of 2 Broadway in Manhattan to voice demands to MTA board members. The next scheduled board meeting is 10 a.m. on Jan. 24.

Join us in supporting all workers, without whom this society could not function. A public transit system should be a service, not a business.

We are on the ground!’ — radio traffic

Audio pulled from Broadcastify during the Amtrak derailment in Washington state.

TACOMA, Wash. — The call came in from Amtrak 501 on its way to Portland on Monday morning. “Emergency! Emergency! Emergency! We are on the ground!,” the train’s conductor reports to dispatchers with BNSF Railway.

“We are on the bridge over I-5 near Nisqually … on the freeway,” the conductor reports. “Need EMS ASAP. Looks like they are already starting to show up.”

‘Emergency! We are on the ground!’ — radio traffic from Amtrak train (

‘Emergency! We are on the ground!’ — radio traffic from Amtrak train
By KOMO Staff
TACOMA, Wash. — The call came in from Amtrak 501 on its way to Portland on Monday morning.Emergency! Emergency!…

Hunter Harrison: Developed ‘precision railroading’ to optimize efficiency

Collected from MANY sources

“Hunter is a legendary railroader, and for good reason,” Lee Klaskow, a Bloomberg Intelligence analyst, said in a 2017 interview. “The Canadian railroads have some of the lowest operating ratios, which is driven by his philosophy — precision railroading. He wrote the playbook on efficiency.”

In his 2005 book, “How We Work and Why: Running a Precision Railroad,” Harrison laid out his core principles for running a rail carrier: service, cost control, asset utilization, safety and people. The volume is still required reading for anyone getting into the industry.

“This book is about running the best damn railroad in the business,” he wrote. “Run a tight ship, and you can expect a reasonable return; manage it badly, and the sheer weight of assets will sink you.”

In his four-and-a-half years as CEO of Canadian Pacific, Harrison transformed the carrier from the worst-performing major North American railroad to the second-best — trailing only his former employer, Canadian National. When he left Canadian Pacific in January 2017, the company’s market capitalization stood at about C$28.2 billion ($22 billion) — about C$15 billion more than when he took over.

“We’re going to do more with less,” Harrison told investors at a presentation in December 2012, less than six months after taking over Canadian Pacific. “We’re going to make those assets really sweat.”

Harrison cut staff and pushed the railroad to run longer and faster trains to reduce fuel and labor costs. He also revamped the executive team, while closing several hump yards — used to separate and sort rail cars — and inter-modal terminals in cities including Chicago and Milwaukee to set the stage for potential land sales.

“Professionally, Hunter was unmatched in this industry. He will go down as the best railroader ever, plain and simple,” Keith Creel, president and CEO of Canadian Pacific, said in a statement. “His legacy will be felt at our company forever.”

CP will lower its flags to half-mast across its network to honor Harrison, said Creel, who worked under Harrison at three different companies.

CSX, spurred on by its shareholders, hired Harrison two months after he quit Canadian Pacific and approved picking up the $84 million payout that he left on the table.

Ewing Hunter Harrison was born in Memphis, Tennessee, on Nov. 7, 1944. He began his career in 1963 as an 18-year-old carman-oiler for St. Louis-San Francisco Railway Co., lubricating train wheels while attending the University of Memphis. He moved to Illinois Central in 1989 as chief operating officer, joining Canadian National when it acquired the Chicago-based carrier in 1998.

Harrison was twice named “Railroader of the Year” by Railway Age magazine — in 2002, while serving as Canadian National’s chief operating officer, and in 2014 for his role at Canadian Pacific — becoming one of only a handful of executives to win the award twice.

It was a script that echoed his move on CP, but this time no battle for the boardroom was required. CSX investors, who saw their shares soar by 35 per cent on news of his intentions, threw their support behind him and he was named CSX’s head in March.

Anthony Hatch, a railway consultant in New York who first met Mr. Harrison in 1990, said the railroader was one of the industry’s revolutionaries – skilled at squeezing efficiencies out of a network of tracks, yards and customers that spanned thousands of kilometres.

Read more on the fantastic career of Hunter Harrison

Google Maps will soon tell you when it’s time to get off your train or bus

Google is about to launch a small but useful update to Google Maps that will give you live guidance and interactive real-time notifications during your journey.

The idea here is to give you real-time updates while you are on your transit journey. These updates will appear in the Google Maps app and, maybe most importantly, on your Android lock screen.

To get started, you search for your transit directions in Google Maps as usual. So far, so good. What’s new here is that you’ll soon be able to tap a “start” button at the bottom the screen with the details about your transit journey and then get live updates as you walk or ride on your local buses and trains.

Freight train derails in New Jersey, causing commuter delays

WTNH Channel 8

A freight train en route to upstate New York derailed in northern New Jersey on Friday afternoon, leaving rail cars strewn across the tracks and snarling the evening commute for thousands of people leaving New York.

Fire officials in Union Township, southwest of Newark, said the roughly 140-car train operated by CSX Transportation derailed about 1:30 p.m. on its way to Selkirk, New York, a suburb of Albany.

Fire Chief Michael Scanio said the tracks suffered “severe damage” but that the train cars were empty according to the engineer’s manifest, and there were no injuries.

Overhead images showed at least a dozen rail cars off the tracks or lying on their sides.

People were evacuated from nearby homes and businesses, Scanio said, but were being allowed to return to their homes by late afternoon after hazmat teams cleared the accident scene.

The tracks affected by the derailment are owned by Conrail and are also used by commuter railroad New Jersey Transit, which suspended service on its Raritan Valley Line in both directions in the area of the derailment.

There was no immediate indication about what caused the derailment or how long it would take to restore rail service in the area.

Thoughts On Connecticut Freight Railroads

In a great attempt to bring back the capabilities of the old New Haven Railroad, the State of Connecticut has developed a STATE RAIL PLAN:

The Providence & Worster (former NY and New Haven Railroad) and the New England Central(Central Vermont/Canadian National) are owned by the same company, Genesee and Wyoming. The P & W , successor to the New Haven Railroad , is alive and appears to be doing very well.

Most of the smaller Connecticut Railroads are doing as well as expected. The Housatonic Railroad (coming from New York State) needs help once they enter Connecticut. A plan is developing to bring that about:

Aside from all of this, there are several comments recently on CSX.

Maybe CSX needs to sell out in Western Connecticut? Put ownership with P&W or Housatonic?

What are your thoughts?