Pandemic Relief Bill Would Help Amtrak, Public Transit

Amtrak and public transit would gain additional emergency funding if a COVID-19 relief proposal introduced in the Senate by members on both sides of the aisle wins approval.

The legislation was introduced on Tuesday by the self-described “gang of eight,” which includes Democrats and Republicans.

Their $908 billion bill would alot $15 billion for public transit and $1 billion for Amtrak.

However, the prospects for the bill being adopted are murky.

Senate majority leader Mitch McConnell has spoken in favor of a $500 million relief plan that includes no funding for transportation.

Any plan must win approval not just of the Senate but also the House and President Trump.

The gang of eight proposal includes $45 million for transportation, including funding for airlines, airports and intercity bus operators.

Sponsors of the plan say it is intended to provide emergency funding through March 31, 2021.

They said that at that time incoming President Joseph Biden and the next Congress can work out another relief package.

The funding included in the bill introduced this week is far below what Amtrak and public transit agencies said earlier that they need.

Then-Amtrak President William Flynn said the intercity passenger carrier needs $2.4 billion while public transit has sought $32 billion.

The funding for other modes of transportation also fall below that sought by trade associations representing those modes.

The gang of eight proposal would grant $15 billion to airlines versus at least $32 billion requested, $4 billion to airports versus $13 billion requested, and $8 billion to bus companies versus $10 billion requested.

The Rail Passengers Association said if Amtrak receives the $1 billion earmarked in the gang of eight bill that would be sufficient to return daily service to long-distance routes that lost it in October.

It also might be enough money to restore some state-supported corridor services that have been suspended during the pandemic as states faced revenue shortfalls prompted by an economic downturn.

The rail advocacy group indicated that several Senate Republicans have signaled that any pandemic aid is likely to be attached to an omnibus spending bill for FY2021.

Congress in late September approved a continuing resolution extending federal funding authority into FY2021 at FY2020 levels. That resolution expires on Dec. 11.

Amtrak Workers Rally for More Federal Aid

Amtrak workers represented by three labor unions held rallies on Wednesday in an effort to drum up support for additional emergency COVID-19 aid for the intercity rail passenger carrier.

Rallies were held in Washington, New York, Chicago and Los Angeles seeking the aid in order to stave off furloughs and reductions in operations of long-distance trains.

Amtrak is planning to layoff nearly 2,000 employees and operate most long-distance trains three days a week rather than daily.

News reports indicate that members of Congress are discussing additional pandemic aid, but it’s uncertain if additional funding for Amtrak will be part of any package that can win approval of both chambers.

The Senate has balked at a House package approved in May and is seen as unlikely to adopt all of the provisions of another package the House expects to vote on this week.

That latter bill would include emergency funding for Amtrak, public transit and the airline industry.

Some rallies were held at primary Amtrak stations although one was held at the station in Dearborn, Michigan, a Detroit suburb, while another was held at the Capitol in Washington.

The unions involved included the Sheet Metal, Air, Rail, and Transportation; Transportation Communication Union ; and the Brotherhood of Locomotive Engineers and Trainmen.

Senator Steve Daines (R-Montana), has proposed an amendment to a Senate pandemic aid bill that would prohibit Amtrak from implementing “service cuts or furlough or terminate the employment of any employee during the period beginning on Oct. 1, 2020.”

Trains magazine reported that the House bill pandemic relief bill under consideration proposes $2.5 billion for Amtrak.

That funding would be divided into $1 billion to maintain long-distance daily frequencies, $1.4 billion for the Northeast Corridor, and the rest to bolster state payments for corridor service.

The magazine said Amtrak has in the meantime begun moving some equipment to storage locations, which could be a sign that management lacks confidence that additional aid for Amtrak from Congress is likely to be approved.

Amtrak Averaging 4,000 Passengers Per Day

Amtrak is carrying an average of 4,000 passengers a day during the COVID-19 pandemic.

The carrier normally averages 100,000 passengers a day. About 57 percent of Amtrak’s departures have been temporarily suspended with the Northeast Corridor seeing a reduction of 77 percent of its scheduled trains.

“We are running trains where we have more staff than customers,” Amtrak CEO Richard Anderson said during an employee town hall meeting last week.

Anderson described the $1.018 billion in emergency aid it is receiving from the federal government as essential but said “we are burning about $50 million a week in cash.”

Anderson said Amtrak’s recovery from the pandemic will proceed as travel demand grows.

“We are going to be a very different railroad when we come out the other other side of this; we will be 20% smaller,” he said.

Anderson hopes that travelers understand Amtrak doesn’t pack passengers aboard its trains as densely as airlines do in their planes.

That could favor Amtrak in shorter-haul markets, he said.

FTA Posts Pandemic FAQ for Transit Agencies

The Federal Transit Administration has recommended that public transit workers use personal protective equipment, including masks.

FTA made the recommendations last week in response to frequently asked questions. Transit workers should practice social distancing.

The  recommendations follow those from the federal Centers for Disease Control and Prevention, which has recommended that cloth face masks be worn by frontline workers and high-touch surfaces should be disinfected daily.

The FAQ page was published as resource for Coronavirus Aid, Relief, and Economic Security (CARES) Act grantees and can be found at:

https://www.transit.dot.gov/frequently-asked-questions-fta-grantees-regarding-coronavirus-disease-2019-covid-19

Class 1 Railroads Set to Weather Pandemic, Economic Downturn Yet Face Challenges

Although light loads such as this eastbound CSX train in Berea in April 2019 are unusual, falling traffic is among the many challenges railroads are facing during the COVID-19 pandemic and its resulting economic downturn.

Railroads appear well positioned to weather the economic downturn that has accompanied the COVID-19 pandemic but there will be challenges an analysis published by Railway Age concluded.

The magazine’s Washington correspondent, Frank Wilner, observed that the nation’s Class 1 railroads appear to be sufficiently solvent, focused and managerially prepared.

However, some small railroads may require financial assistance to get through the economic downturn.

Some shippers may be wondering if during the recession that railroad managers will give higher priority to protecting stock prices rather than providing quality service.

A future cash flow stream might make railroads attractive to a private-equity infrastructure investment fund such as Brookfield Infrastructure Partners, which bought short line holding company Genesee & Wyoming for $6.5 billion.

Some railroads might seek to prop up their stock price as a defense mechanism against being taken over by an investment fund.

This is a particular issue with Class 1 carriers practicing the precision scheduled railroading operating model.

Those carriers have aggressively reduced costs in order to drive down their operating ratio, which is the percentage of revenue that is devoted to expenses.

Only BNSF among Class 1 carriers does not practice PSR.

A related challenge could be how railroads will respond to surges in traffic once the pandemic and economic woes are over.

Although the PSR carriers have surplus locomotives and rail cars in storage and are thus well situated to handle increased traffic, the longer those assets sit in storage the more costly they will be to return to service

Wilner said publicly traded railroads may be holding the wolf of lower operating ratio by the ear and will be neither able to safely hold on or to let go.

Railroads are also facing challenges prompted by falling volume of some traffic that has long been lucrative for railroads.

Chief among them is coal, which is down 23 percent since the 1980s as natural gas has displaced coal as the fuel of choice for many power plants.

In 2019, 45 percent of electricity in America was generated by coal-fired plants but that has fallen to 24 percent.

Other lucrative traffic, such as chemicals and automotive, have fallen during the global economic slowdown and trade wars.

Wilner said carloadings of these commodities could stagnate at low levels.

Intermodal traffic offers hope for traffic growth but only if railroads can compete with truckers who are benefiting from lower fuel prices.

Railroads could be further hamstrung in seeking to divert trailers and containers from highways if Congress increases the allowable sizes and weights of trucks.

Wilner argued that railroads need to be able to negotiate one-person crew agreements with their unions in order to be competitive for some traffic.

Other challenges looming that could have negative consequences for railroads include the use of battery-operated heavy-duty trucks that could reduce the operating costs of truckers.

The continued rise of e-commerce is expected to refine retail supply chains and lead to more closings of brick-and-mortar stores.

Durand Railroad Festival Canceled

The annual railroad festival in Durand, Michigan, has been canceled due to the COVID-19 pandemic.

The event was to have been held May 14-17 by Durand Railroad Days, Inc.

The announcement was made on the group’s Facebook page and it would have been the 44^th festival.

The event is held in part at the restored Durand Union Station, which houses the Michigan Railroad History Museum and serves as an Amtrak station for the Chicago-Port Huron Blue Water.

The museum is also closed through at least April 30 due to the pandemic.

Durand sees trains of Canadian National, Huron & Eastern and Great Lakes Central.

Imports in March Drop to 5-Year Lows

Imports in March at major U.S. retail container ports dropped to their lowest level in five years the National Retail Federation said this week.

In a news release, NRF projects that imports will remain significantly below normal levels through early summer due to the coronavirus pandemic.

“Even as factories in China have begun to get back to work, we are seeing far fewer imports coming into the United States than previously expected,” said NRF Vice President Jonathan Gold.

He noted that many stores are closed and consumer demand has fallen as millions of Americans have been put out of work.

Gold said cargo may sit may sit longer than usual and cause other supply chain impacts.

U.S. ports covered by the Global Port Tracker handled 1.51 million 20-foot equivalent units (TEUs) in February, which was a fall of 17 percent from January and 6.8 percent compared with February 2019.

NRF said February typically is lower than January because of annual factory closures in China for Lunar New Year celebrations.

However, this year the shutdowns lasted into March because of the pandemic.

Although actual numbers for March are not yet available, estimates show that imports plunged to 1.27 million TEUs, down 21.3 percent year over year and the lowest level since February 2015, when a labor dispute caused slowdowns at U.S. West Coast ports.

Full Recovery From Pandemic Might Be 2021

The COVID-19 pandemic is likely to affect the nation’s railroad systems, but the degree of that remains unknown.

Progressive Railroading reported this week that industry observers are struggling to get a handle on it because there are so many unknowns at this point.

“A better way to look at this is 10 simultaneous hurricanes in the United States and the destruction that follows,” said FTR Intel Chief Strategy Officer Clay Slaughter during a COVID-19 webinar FTR conducted on March 26. “How many businesses won’t reopen? How much permanent or semi-permanent disruptions will there be?”

Slaughter said that during a hurricane there is a concrete beginning and ending, a process that lasts for 60 to 90 days.

However, the pandemic is not necessarily a onetime event but a series of events with not-so-concrete endings, Slaughter said.

In part that is because of the wide variance in how states have reacted to the pandemic.

Slaughter predicted there will be large regional differences in how the pandemic affects railroad operations.

Another observer predicts that not only will the endings vary but they won’t come soon.

Tony Hatch, who owns his own transportation analysis firm, wrote in a message to his clients the recovery from the fallout of the pandemic might not come until 2021.

He said that will apply to everything from railroads to the economy to sports teams.

In the meantime, a number of railroad conferences have been delayed or canceled.

The Secure Rail Conference that was to have been held in Chicago April 21-22 has been moved to Aug. 25-26.

That conference seeks to address the future of rail technology and rail security.

The North American Rail Shippers Association has canceled its 2020 annual meeting that was to have been held May 12-14 in Kansas City, Missouri.

The group’s next meeting will be Mauy 12-14, 2021, in Chicago.

CN Cutting Workforce, Trains During Pandemic

Canadian National CEO J.J. Ruest provided a glimpse of how Class 1 railroads are scaling back operations in the wake of a falloff of freight traffic during the COVID-19 pandemic.

CN has furloughed more than a thousand workers and has reduced the number of trains that it operates.

It has closed its yard in Battle Creek, Michigan, because finished vehicle volume has dropped by 50 percent after major automakers closed their plants to prevent the spread of coronavirus.

Speaking during a webcast hosted by Citibank analyst Christian Wetherbee, Ruest said CN carload traffic fell 13 percent with automotive traffic, crude oil shipments, and frac sand in particular showing declines.

CN continues to enjoy strong volumes of Canadian grain, Canadian export coal, propane, and domestic intermodal traffic.

Ruest said overall volume will continue to diminish in the coming weeks as factories close or reduce production and consumers cut their spending.

At the same time, Ruest said CN wants to be ready when traffic returns although he said there is much uncertainty over when that will occur.

CN plans to open a sixth dispatching office, which it calls a rail traffic control center, in order to minimize the risk of COVID-19 affecting operations.

The Montreal-based carrier has had some difficulty purchasing disinfecting products, Ruest said and has turned to making its own disinfectants in shops as well as having employees of its freight forwarding business in China buy disinfectants and send them to North America via air freight.

Chief Financial Officer Ghislain Houle said during the webcast that CN is likely to reduce capital spending this year but will continue with capacity expansion projects scheduled for its main lines to Vancouver and Prince Rupert, British Columbia, where intermodal and coal traffic are expected to rise.

NS Describes Steps It is Taking to Stay Healthy

Norfolk Southern is taking a number of steps to protect the health of its employees during the COVID-19 pandemic while also doing its part to keep commerce flowing by rail

In an article written by the corporate communications staff that was published by NSBiz, the railroad described those steps.

That includes distributing hand sanitizer, cleaning supplies and disinfectant sprays and wipes from its distribution center in Dayton, Ohio, that also supplies parts for railcars and locomotives to mechanical shops across the railroad’s network.

Those sanitation supplies are then delivered to rail yards, terminals and other operating facilities.

“We are taking a hard stance on sanitation and cleaning initiatives,” said Jason Eddy, senior director mechanical in Cincinnati.

“All departments are our boots on the ground looking at the work conditions and cleanliness, whether it’s crew rooms, yardmaster towers or locomotive cabs. It’s very serious business for us.”

In early March the NS sourcing department bought 30,000 half-gallon containers of hand sanitizer, which works out to a half-gallon for each NS railroader with 2,500 gallons to spare.

“Our supplier had enough raw material to make 15,000 gallons, so we bought it all,” said Jay Medlin, Group Manager Purchasing, based in Norfolk, Virginia.

NS has increased the frequency of cleaning and disinfecting workspaces, implemented social distancing measures, and is communicating to employees what they can do to help prevent the spread of COVID-19.

That includes providing janitorial services to seven days a week in most places and twice a day in locations where there’s a lot of foot traffic.

The latter includes crew rooms at such busy terminals as Chicago and Toledo, Ohio.

NS officials said a special emphasis has been placed on cleaning and disinfecting locomotive cabs.

Before boarding, all train and engine crews are provided packs of wipes effective against the virus.

Vendors that provide taxi service and lodging for road train crews are also being checked to ensure they have adequate supplies of hand sanitizer and disinfectants.

As for social distancing practices, between work shifts, supervisors are avoiding face-to-face turnovers.

At some locations, NS staggered shift times for operations employees, allowing them to end their shifts 15 minutes early, with pay, to avoid mixing with co-workers arriving for the next shift.

In office locations, employees performing critical jobs to maintain operations, including train dispatchers, have been separated into different locations to ensure redundancy and also provided work spaces that limit unnecessary exposure to co-workers.

Employees able to perform their jobs without reporting to an office are working remotely.