Posts Tagged ‘Railway Age’

Locomotive Business Future Not Bright

November 15, 2017

Although General Electric has yet to discuss in detail why it is seeking to sell or spin off its transportation division, one factor is likely a weak market for new locomotives.

GE had cited that earlier this year in talking about its plans to end locomotive production at its Erie, Pennsylvania, assembly plant.

Now comes a report in Railway Age that states that the number of investors in locomotives is falling and the value of used locomotives is declining as well.

Historically, leasing companies and banks were major buyers of new locomotives.

But, Railway Age reported, “changes to the lease market, low interest rates, railroad profitability and bonus depreciation changed railroad investment in locomotives from lease to buy and have potentially changed the market forever.”

Declining freight traffic has also played a role in depressing locomotive demand.

There are few investment opportunities with long-term value in locomotives and the short-term lease market for locomotives has grown thin aside from short line and industrial railroads. In short, there is more supply than demand for locomotives.

Steven Beal, president of locomotive manufacturer, rebuilder and lessor NRE, told Railway Age that there might not be any significant orders for new locomotives until 2020.

Orders for new locomotives peaked in 2015 before EPA Tier IV emissions restrictions were implemented. Since then new locomotive orders have become almost non-existent.

Many carriers have found it cheaper to rebuild older units with modern affordable technology that meets emissions standards than to buy new Tier IV units.

However, time may be on the side of locomotive investors.

There are a lot of old locomotives still in service. One estimate is that 80 percent of locomotives built 50 years ago are still in service. Older locomotives someday will need to be replaced.

In the meantime, many class 1 railroads are paring down their diesel rosters. Railway Age quoted an unnamed source as saying that Class 1’s are returning every off-lease locomotive of less than 1,500 hp and ditching higher horsepower four-axle locomotives such as the GP38-2, a four-axle, 2,000 hp locomotive whose production ended in 1984.

Many of these surplus units have been sold at auction with short-line railroads being active buyers.

But not all of the locomotives being discarded by the Class 1 railroads are finding buyers due to height, weight and track restrictions on larger locomotives.

Beal said NRE has fielded an increase in inquiries from the industrial market for medium horsepower four- and six-axle power because their business has picked up, particularly in the steel and petrochemical sectors.

He said the number of locomotives in storage has declined by half to roughly 2,500.

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Is CSX Trying to Eat its Seed Corn?

November 6, 2017

Under normal circumstances, I don’t cover news beyond the states that surround Ohio, but there is a story out of Baltimore that is worth following because it may say much about what is going on with CSX these days.

Last week CSX said it would not contribute $145 million to a public-private partnership to enlarge the Howard Street Tunnel in Baltimore to accommodate double-stacked container trains.

When the Baltimore & Ohio Railroad built the tunnel 122 years ago, no one could have envisioned stack trains, let alone intermodal trains carrying containers and truck trailers.

Howard Street is just one example of the aging infrastructure in the Northeast transportation corridor between New York and Washington that needs to upgraded, rebuilt or replaced. It won’t be inexpensive.

You might think that CSX would be keen on modernizing the Howard Street Tunnel because it is an impediment to developing the I-95 corridor between New Jersey and Florida. And for a time it was.

Enlarging the Howard Street Tunnel would have benefited the Helen Delich Bentley Port of Baltimore, which has seen an increase in container traffic since the expansion of the Panama Canal.

Figures provided by the Maryland Port Administration show that the port handled a record 10.3 million tons of general freight and nearly 908,000 TEUs (20-foot-equivalent units) of containers in fiscal year 2017, which ended on June 30.

Then along came E. Hunter Harrison of precision scheduled railroading fame.

In announcing the decision to cancel its share of funding for enlarging Howard Street Tunnel, CSX put out a statement that referenced precision scheduled railroading – it has become a buzz phrase used as boilerplate in virtually every CSX statement and news release these days – and made a vague statement that the tunnel project “no longer justifies the level of investment required from CSX and our public partners at this time.”

But as Railway Age magazine pointed out, the statement did not fully explain why CSX decided to bail out on funding the Howard Street project.

When the magazine asked CSX to elaborate, its PR department replied with the same statement it had issued earlier. CSX is not going to explain itself any further.

Railway Age suggested two possible reasons for why CSX backed away from the Howard Street tunnel project.

One is that a fresh set of eyes in CSX management decided that the return on investment wasn’t worth $145 million because the volume of double-stack container traffic likely to use the tunnel would not be as high as the previous CSX management projected.

The other theory is that CSX management is dancing to the tune being played by hedge fund Mantle Ridge, which played a major role in getting Harrison installed as CEO last spring.

This theory is that CSX is diverting cash from infrastructure projects to a $1.5 billion stock buy-back program that will benefit Mantle Ridge, which acquired a sizable block of CSX stock in order to have enough clout to force the company to hire Harrison.

Media outlets have also been reporting that CSX has decided against building a new $270 million intermodal terminal near Rocky Mount, North Carolina.

Designed to develop intermodal business in the middle Atlantic region, the Carolina Connector was to be modeled after the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio, which opened in 2010.

CSX has begun scaling back operations in North Baltimore and there are reports that it plans to end intermodal operations there on Nov. 11. Last year, North Baltimore handled nearly 30 percent of CSX’s intermodal traffic.

It is not clear yet what strategy CSX has in mind for its intermodal business other than it is abandoning the hub and spoke system of building traffic density at terminals such as North Baltimore and the proposed North Carolina facility.

Railway Age quoted railroad economist Jim Blaze as saying that without enlarging the Howard Street Tunnel, most of the talk about developing the I-95 corridor and diverting traffic from trucks is just talk.

“Stack trains are about 35 percent more efficient than single-level intermodal trains,” Blaze told Railway Age. “Without Baltimore as a double-stack route, other intermodal I-95 projects on CSX’s two-decade-long wish list are likely also now at risk. My questions: Where’s the traffic growth to come from for intermodal east of the Appalachian Mountains? What’s the back-up plan to grow the top line of the CSX income statement? This is a strategic economic issue.”

Blaze predicted that the “winners” of the CSX decision will be truckers as well as Norfolk Southern, which has been working for two decades to develop a double-stack route between the New York City/Northern New Jersey region and Florida.

The NS route is longer and more circuitous than the CSX route, but has clearance to handle stack trains all the way.

If the Mantle Ridge influence theory is true, it suggests that CSX is playing a game that has been played out many times before in corporate America.

In the 19th century, it was common for financiers to “milk” railroads for all the money they could before walking away and leaving the railroad a shadow of its former self.

That might not happen to CSX, but I also wonder if this is replay of another era not that long ago that was described in Rush Loving’s book, The Men Who Loved Trains.

That book described another CSX administration that was focused on expense control of its income statement and balance sheet assets to the detriment of infrastructure development.

It decided that short-term financial gain could be had by squeezing a little more life out of ancient signals and other infrastructure.

In this case, CSX has decided it can get by a little longer with a narrow tunnel in a key intermodal lane.

Rather than spending money to make money, CSX has decided to hoard and eat its seed corn.

CSX Union Hits Back at Harrison Obstruction Allegations

August 8, 2017

A CSX labor union has taken issue with assertions by the railroad’s CEO E. Hunter Harrison that some CSX workers are the reason for service issues.

In a letter to CSX shippers, Harrison contended that some CSX employees were resisting the changes that management has made in operations and that this was resulting in service disruptions.

Railway Age magazine reported Monday that it obtained a copy of a letter sent to Harrison last week by the Sheet Metal, Air, Rail and Transportation Workers, which represents some CSX operating employees.

The letter was signed by SMART’s five co-chairmen and said that the union “ . . . refuses to accept responsibility for disruptions that negatively affect the customers when we have no input on operational changes. We receive minimal, and in most cases, no communication from any department about the significant changes being implemented almost daily.”

The letter said that Harrison has ignored the union’s repeated requests to be involved in planning changes and that it viewed the CEO’s charges as “a personal attack,” “a kick to the gut,” and “a severe blow to [employees’] morale.”

SMART criticized CSX for what the union termed “harsh treatment, furloughs and repeated violations of their collective bargaining agreement.”

In denying Harrison’s allegations that union members had intentionally disrupted operations, the SMART letter said, “This organization will not allow our members to serve as an excuse for management’s inability to communicate and execute your ‘precision scheduled railroading.”

The magazine reported in late July that CSX had changed work hours from four 10-hour days to five eight-hour days in an effort to reduce train delays.

However, that has made it more difficult for employees working far from home to get to work and back in a reasonable length of time.

Most CSX Shippers Reporting Service Issues

August 3, 2017

A survey of CSX shippers has found more than 80 percent of those responding saying they have experienced service issues since the company initiated the precision scheduled railroading operating philosophy of its CEO, E. Hunter Harrison.

The results were reported in Railway Age, which quoted Cowen & Company Managing Director Jason Seidl as saying that “nearly 40 percent [of respondents] have switched some freight to Norfolk Southern, and 67 percent have transferred freight to a trucker.”

Sidel said this could lead to NS gaining additional market share gains in the third quarter of 2017, prompting a 5 percent increase in NS earnings per share if it grabs as much as 5 percent of CSX traffic.

“Shippers are moving or have already moved freight off CSX where they can,” Seidl said.

Although 37 percent of survey respondents said they are switching at least some freight to NS, nearly 50 percent of those not captive to CSX are moving a piece of their business to NS and two-thirds of [responding] shippers are moving some freight from CSX to trucking company.

The survey found that 20 percent of shippers are shifting less than 25 percent of eligible freight to NS, while 14 percent are transferring between 25 percent and 50 percent of freight.

Just 5 percent of survey respondents said they were moving more than half of their traffic to NS and about 40 percent are moving less than 25 percent of their freight to trucks.

“Our view is that NS could meaningfully benefit from the service-related issues at CSX over the next couple of quarters,” Seidl said. “We continue to like the stock and see NS achieving its sub-65 OR (operating ratio) goal before 2020. NS should also have an easier time raising prices over the near-term as we think shippers would be willing to accept them for reliable service.”

Despite the problems that CSX had had, Seidl said he sees them as transitory. “While it is painful for many shippers today, we expect that over the next 12-18 months CSX customers will be more pleased with the railroad’s service quality. We do not think volumes that are lost to NS or a trucker during this transition period will be permanently lost.”

Pa. Short Line to be Named Railroad of the Year

April 4, 2017

A Pennsylvania short line railroad will received the short line railroad of the year award at the American Short Line and Regional Railroad Association’s annual meeting later this month in Grapevine, Texas.

The North Shore Railroad will also receive the ASLRRA 2017 Marketing Award.

In a news release, North Shore officials attributed the awards to recent work in securing and moving a record number of high-and-wide loads.

“When we began consideration of and preparation for these high-and-wide shipments two years ago, there was never a guarantee that we would see them,” said Todd Hunter, North Shore’s chief marketing officer. “However, having ‘local boots on the ground’ gave us a leg up in meeting all the criteria to handle these oversized loads.”

The short line railroad of the year award is presented by Railway Age magazine. There are more than 500 short line railroads in the United States.

North Shore affiliate, Nittany & Bald Eagle Railroad, received the honor in 2016.

Since the award was first awarded 21 years ago, only three railroad companies have earned this award two years in a row.

Harrison Eyes Taking Over CSX as CEO

January 19, 2017

E. Hunter Harrison is back in the takeover game and setting his sights on wresting away control of CSX from current CEO Michael Ward.

E. Hunter Harrison

E. Hunter Harrison

The Wall Street Journal reported this week that Harrison, who fought an unsuccessful bid in early 2016 to acquire Norfolk Southern, has teamed up with Paul Hilal, a principal at hedge fund Mantle Ridge, to prod CSX to make a management change.

Hilal was formerly with Pershing Square Capital. The latter is run by William Ackman, who played a key role in getting Harrison named CEO at Canadian Pacific in 2012 after winning a proxy fight.

Harrison, 72, this week said he is severing his ties with CP before his official retirement from the company.

He will be succeeded at CP by Keith Creel, effective Jan. 31. In the interim, Harrison is reported to be on vacation and Creel will assume Harrison’s duties.

Harrison has agreed to sell all of his shares of CP stock by May 31 and the CP board of directors agreed to provide him with a limited waiver of a non-compete clause to which he would otherwise be subjected.

In return for waiving the non-compete clause, Harrison will forgo all roles he had with CP and give up substantially all benefits and perquisites to which he was entitled. The total value of those forfeited benefits is $89 million.

The CSX takeover attempt would be Harrison’s second. CSX rejected his overtures in 2014.

The WSJ reported that CP will not participate in any effort that Harrison makes to gain control of CSX.

Hilal left Pershing Square last year to start his own activist fund, which has raised more than $1 billion for a single investment, according to the WSJ. Those investors reportedly have committed to keeping money in the fund for five years.

Harrison became the CEO of CP after Ackman led a proxy fight that resulted in the ouster of CP CEO Fred Green.

If Harrison and Hilal follow that same script at CSX, they will seek to oust Ward, who has indicated he plans to retire in 2019.

Hilal was with Pershing Square at the time of the CP takeover and recruited Harrison, who had been CEO of Canadian National.

Railway Age magazine quoted Cowen and Company Managing Director Jason Seidl as observing, “Hunter left C$118 million in equity awards on the table, which indicates to us he still has a burning desire to run a railroad. His reputation of being the most sought after manager in the North American railroad industry could make it very difficult for CSX to refute Harrison’s desire to run its franchise.”

Seidl told Railway Age that a CSX takeover would differ from what Harrison attempted at NS because the latter involved a merger whereas the CSX gambit would be just a management switch.

Railway Age quoted an unnamed railroad industry analyst as predicting that if Harrison is able to become head of CSX a merger with CP will not likely be one of his first priorities.

The analyst said that Harrison could be expected to change the CSX engineering, train operations and capital investments plans that Ward’s management team has been implementing over the past year.

Given Harrison’s track record, the analyst expects that he would impose at CSX a more aggressive capital expenditure downsizing and reduce its labor force.

Harrison would not be likely to institute more aggressive marketing and selling promotions, but would oversee creating more discipline in CSX train operations.

There is Intermodal Business for Railroads to Pursue But They’ll Need to Be Smart to Get It

November 5, 2016

Railway Age magazine recently asked its experts to look into their crystal balls and predict the future of freight by rail in America.

train image2The consensus was that coal is not going to be the cash cow that it once was, crude oil might bounce back a little bit, automotive traffic will continue to cyclical and grain is profitable but seasonal.

The magazine’s experts said the railroads have done well in lowering their operating ratios through reducing costs and being more productive.

But trimming expenses will only take the industry so far and although the financial community is enthralled with the religion of cost cutting, it seldom is able to see beyond the next financial reporting period.

Comparing a railroad to a tree, the Railway Age analysis said that it may be that dead wood needs to be removed, but if a tree is to survive and thrive, it must grow.

So what will be the sources of this growth? Some analysts argue that it will be intermodal, including the type of short-haul business that railroads have traditionally ceded to trucks.

In the current intermodal market, some see short-haul business as having untapped potential if the industry keeps its pencils sharp and its costs low.

That means no $100 million terminals or expensive lifts. Trailers need to roll on and roll off as quickly as possible. It also means running short trains on precise schedules.

“In my humble opinion, short-haul intermodal (250 to 700 miles) represents the only opportunity in the near future for railroads to increase their traffic, said Steve Ditmeyer, who writes often for Railway Age. “And they only need to capture just a small fraction of the total short-haul truck traffic to experience a substantial traffic gain.”

Beyond intermodal growth, though, the railroad industry may need to learn to adapt to a challenging economy.

“My thesis beyond coal: We’re in a 2 percent-growth economy where there is less stuff moving than in a 3-4 percent economy,” said Railway Age Contributing Editor Roy Blanchard.

“Finished goods from corn pone to white goods are less in demand, so you need less raw material to meet what demand there is. Lower demand for finished goods equals fewer goods moving to market, and what goods are moving are moving by truckloads, not carloads, in amounts more fitting for smaller inventory loads. So, yes, it’s a freight recession, and the bloom is off the railroad renaissance.”

Blanchard said that pricing to what the traffic will bear has evolved into order-taking and pricing by computer model to maximize revenue and minimize cost.

Consultant Jim Blaze said the days are gone when rail intermodal growth will come at two to three times the rate of GDP growth.

Railway Age Profiles INRD Founder Tom Hoback

March 11, 2015

He is described as a visionary leader who took a down at the heels branch line that the Class 1 railroad for which he once worked wanted to abandon and turned it into a regional railroad success story.

Indiana Rail Road founder Thomas Hoaback aboard one of his railroad's passenger cars.

Indiana Rail Road founder Thomas Hoaback aboard one of his railroad’s passenger cars.

“When the history of 21st-century railroading is written sometime in the far future, the accomplishments of Thomas G. Hoback—Founder, President, and Chief Executive Officer of the Indiana Rail Road Co.—will be chronicled as an example of the type of visionary leadership that made a notable impact on a resurgent industry,” wrote Railway Age magazine Editor in Chief William Vantuono in a profile of the INRD founder.

Today the INRD has 500 miles of routes stretching from Chicago to Louisville, Ky.

The magazine described Hoback as a “visionary entrepreneur and shrewd businessman, with great compassion for the community, responsible for myriad contributions to education, historic preservation, and the arts.”

Hoback was born into a railroad family in 1947 in Peoria, Ill. His father was a Santa Fe dispatcher and even now Hoback retains a keen fondness for the Santa Fe. He and his wife own one of the Santa Fe’s former business cars.

The junior Hoback worked as a summer track worker for the Santa Fe during his college years and after graduation was a rail shipper for Foremost-McKesson. He also worked as an economic analyst for the Western Pacific Railroad.

After returning to the Midwest in 1977, Hoback worked for a year for the Erie Western before joining Illinois Central Gulf in 1978 as director of coal marketing

Hoback saw the potential of the ICG’s Indianapolis-Effingham, Ill., line that the railroad had sought to abandon in 1977.

Nearly a decade later, he led a successful effort to acquire the “high and dry” line, which he knew ran adjacent to one of the largest undeveloped coal fields in the country.

Over the next 28 years, Hoback oversaw the diversification of the INRD’s traffic base and the rebuilding of its worn out track.

INRD attracted more than $180 million in private capital that it used to transform itself in what Railway Age described as a “heavy-haul, high-tech regional railroad.”

The railroad acquired Canadian Pacific’s Indiana trackage, which included rights to serve Louisville via a CSX route. The tracks and Louisville rights had originally belong to the Milwaukee Road.

Today’s INRD handles 170,000 annual carloads with 182 employees. To read the magazine’s complete profile, go to:

http://www.railwayage.com/index.php/freight/short-lines/entrepreneurial-railroader.html?channel=94

VIA Rail Canada’s CEO is Looking For Expansion

January 22, 2015
The Vancouver-Toronto Canadian is the best known train of VIA Rail Canada, particularly outside the country. A workers washes a dome car's windows during a service stop in Jasper, Alberta.

The Vancouver-Toronto Canadian is the best known train of VIA Rail Canada, particularly outside the country. A workers washes a dome car’s windows during a service stop in Jasper, Alberta.

First of Two Articles

We don’t think much about VIA Rail Canada here in Northeast Ohio. We never see its trains and because it “up there in Canada” it must seem to be a long way away.

But consider that the heart of the VIA network is much closer to us than Amtrak’s robust corridor operations in California, North Carolina and the Pacific Northwest, and about as close as Amtrak’s hallowed Northeast Corridor.

That’s because much of VIA’s network is focused on Toronto, which is about a five or six hour drive from Cleveland.

VIA and Amtrak has much in common. Both were created in the 1970s to relieve trunk line railroads of their economic losses in providing intercity rail passenger service.

Both have had to rely on stingy government funding that often seems to be given grudgingly.

VIA in some respects is in a more precarious position than Amtrak when it comes to federal government support.

Whereas Amtrak was established by legislation, VIA was created by executive fiat. Hence, VIA is more vulnerable than Amtrak to the political winds blowing through the executive branch.

Since starting in 1977, VIA has endured a serious of route restructurings that have left it with a network largely focused on corridor services in Ontario and Quebec, with three routes extending to the oceans that provide less than daily service.

During the winter, VIA’s best known train, the Toronto-Vanouver Canadian departs its endpoints two days a week.

Virtually every VIA train operates on tracks owned and dispatched by Canadian National.

Despite it all, some observers have noted that VIA’s staff has remained unfailingly courteous and the Canadian continues to receive high marks for its onboard service.

VIA chief

Yves Desjardins-Siciliano

Now VIA has a new CEO and he is talking about service expansion rather than contraction.

Yves Desjardins-Siciliano is a lawyer by trade and wants to build a new intercity network in Central Canada while restoring some abandoned regional services in the East and West.

“There is more of an opportunity for growth than there is a risk of downsizing,” he told Railway Age.

Desjardins-Siciliano has been on the job since May 2014. He spent four years as VIA’s chief legal officer and before that worked in what the magazine described as “business and government careers in the walnut-panelled aeries of Montreal’s and Toronto’s financial districts and the neo-gothic sandstone fantasies sheltering Ottawa’s governing class.”

A Railway Age reporter who interviewed him at VIA’s Montreal headquarters noted that Desjardins-Sicilian’s office is “refreshingly free of architectural pretension, with just a glass wall providing conversational privacy from the otherwise wide-open executive suite.”

The executive suite includes a mural depicting an overview view of a speeding steam locomotive.

“Our first role is to run the railway—with the assets we have today,” Desjardins-Siciliano said. “It’s not our role to make transportation policy.”

Like Amtrak’s Joe Boardman, Desjardins-Siciliano must respond to policies made by others.

If you give him a chance, Desjardins-Siciliano will lay out his own ideas of what that policy could or even should be.

His vision begins with doing something about a reality that also plagues Amtrak. VIA trains must share increasingly crowded tracks owned by freight companies.

“After 150 years, the mixed environment is no longer sustainable,” he said. “So, we might as well get on with the future.  The sheer number and size of freight trains are not going to change any time soon. We have to make our peace with that, which means: Either we accept it, which makes service extremely challenging for passengers, or we invest in dedicated trackage.”

Of course Desjardins-Siciliano knows that passenger-only tracks won’t spring up overnight and until they become reality VIA will have to co-exist with the freight companies.

“We will continue to work with our railway partners to ensure that wrong dispatching calls aren’t made too often,” he said.

In the meantime, he adds, VIA will work with the federal as well as provincial governments to find additional sources of funding. VIA will also be looking to the private sector.

The federal taxpayer in Canada now covers 53 percent of the average passenger fare and has invested $1 billion in capital improvements for VIA. “I think that’s enough,” Desjardins-Siciliano said.

One promising avenue for funding is to partner with the government of Ontario to provide VIA regional service in lieu of highway expansion.

“The corridor of any railway is a wealth-creation engine,” he said. “Industry and people want to get close to the tracks. Local governments that benefit from the deployment of high-efficiency, high-performance trains should make a contribution.”

The involvement of the private sector and provincial governments is critical to implanting Desjardins-Siciliano’s vision.

“In a perfect world, the Government of Canada should own the rights-of-way for passenger rail. Everything else, including trackage and perhaps rolling stock, should be funded privately,” he said.

In Part 2 of this series, VIA’s CEO will explain what ideas he has for expansion  of service and what other steps that the rail carrier must take to continue to grow its service.

2015 North American Rail Passenger Outlook Brighter than it Might Seem, Railway Age Reports

January 21, 2015
Much of North America's rail passenger growth is occurring in urban rail systems. Two Greater Cleveland RTA Blue Line trains pass in June 2013.

Much of North America’s rail passenger growth is occurring in urban rail systems. Two Greater Cleveland RTA Blue Line trains pass in July 2013 at the Lynnfield station.

If you focus on Amtrak, it might seem that passenger rail in North America is in jeopardy.

Amtrak faces a multitude of woes including falling ridership on some routes due to delays caused by freight train congestion and a new Congress that may be more hostile to funding the nation’s rail passenger network.

But if you take into account city rail systems, the rail passenger outlook in North America is much brighter than it might appear.

In an analysis published by Railway Age, the magazine reported that not only are North American rail systems growing, but so is the scope of those rail networks along with the size of their fleets.

That has resulted in strong competition among suppliers to meet the needs of those systems. In fact, the magazine reported, the number of global equipment suppliers seeking to cash in on the growth of North American rail systems is expanding, too.

That includes suppliers from China that have been courting the North American markets.

“The numbers counter pessimistic claims that North America’s rail renaissance had run its course in 2014,” the magazine observed. “Indeed, 2014 saw several huge orders for new equipment that added to a backlog of healthy equipment orders from previous years, judging by the numbers of Railway Age’s 2015 Passenger Railcar Outlook.”

The order books of rail car manufactures are filling up with orders from coast to coast, including orders from BART in the San Francisco Bay area and the Boston-based MBTA system.

New urban rail systems are being established in cities where no rail transit systems now exist. In some instances, city governments have gone forward with plans to establish rail systems without a corresponding or outside “agency” or even “authority” to do so.

That triggered grumbling by some old line transit systems about the manner in which the Federal Transit Administration has been encouraging these city government efforts.

How widespread are these efforts by cities to start laying rail and running streetcars and light rail transit systems?

A short list of cities eyeing streetcar purchases and/or new systems includes Anaheim and Santa Ana, Calif., Miami and Miami Beach, as well as St. Augustine, Fla., Grand Rapids, Mich., Minneapolis and St. Paul, Minn., Winston-Salem, N.C., Providence, R.I., and El Paso, Texas. On the brink of coming to fruition are systems in Oklahoma City, Fort Lauderdale, Fla., and Milwaukee.

Rails are being laid in Charlotte, N.C., and in Detroit. In Ohio, the Cincinnati streetcar system is under construction, having survived efforts by the newly-elected mayor to kill the project.

Some proposed city rail systems are likely to fall victim to NIMBY opposition and/or forces trying to kill rail transit for ideological reasons.

Rail systems are expensive and opponents have seized on that with a vengeance in seeking to scuttle proposed streetcar and light rail systems.

Anti-rail forces succeeded in killing a streetcar project in San Antonio and Tampa Bay voters rejected an effort to create a light rail transit system. The St. Louis Loop trolley project may be the next to fall by the wayside.

Much media attention was also paid to the challenges facing three rail projects in the Washington, D.C., area.

This included a pair of proposed streetcar proposals that died in Arlington, Va., the threatened status of the Purple Line light rail transit project spanning two Maryland counties northeast of Washington, and the District’s slow-to-open streetcar line on H Street.

Railway Age said that media accounts cited these examples and concluded that that U.S. urban rail transit growth had peaked.

“But such setbacks failed to encompass the full breadth of U.S. rail passenger progress,” the magazine said, noting that even as San Antonio’s streetcar plan faltered the project in El Paso continues to move ahead.

Urban rail projects as well as intercity and high-speed rail projects continue to face the challenge of obtaining federal funding.

The FY 2015 budget approved by Congress reduced TIGER spending from $600 million to $500 million. That means stiffer competition for those dollars.

The budget bill also funded Amtrak at levels comparable to what it received in FY 2014. Railway Age termed that a modest victory given how much flack Amtrak has taken over its long-distance trains.

Amtrak will be seeking to order new high-speed trains this year to upgrade its Northeast Corridor service.

Funding for passenger rail equipment also continues to come from state governments and regional compacts.

Last year California and some Midwest states added to their order with car builder Nippon Sharyo by adding 45 bi-level intercity cars to an existing 130-car order.

California will add 11 cars to its initial 42-car order while the Midwest states will boost their 88-car order by 34 cars.

With so much interest in passenger rail equipment, Railway Age observed that the days have ended when “build it new” was the only option for suppliers to North American passenger rail entities.

Suppliers are finding a brisk market for retrofitting existing rail cars while also building new equipment for transit agencies that will work alongside the existing fleets.

Such is the approach being taken by Kawasaki Heavy Rail Industries. It will build up to 440 R-188 cars at a factory in Yonkers, N.Y., for use in New York City. But Kawasaki will also be retrofitting numerous R-142 cars that have been in operation for several years.

Kinkisharyo will deliver 35 “mid-section” light rail transit cars to New Jersey Transit for use with existing rolling stock on the Newark Light Rail and Hudson-Bergen Light Rail lines. This will enable N.J. Transit to increase capacity on those routes.

Earlier, Kinkisharyo used a similar approach for Dallas Area Rapid Transit’s enhancement of its existing light rail transit fleet.

There remain, of course, plenty of new car orders to be had. Bombardier continues to work on building 300 new R-179 subway cars for MTA New York City Transit. It also won a BART add-on order of 365 rapid transit cars.

China’s CNS Changchun landed a Massachusetts Bay Transportation Authority contract to supply 284 rapid transit cars for Boston’s “T” system.

A bid is expected this year by at least one Chinese firm, likely in a joint venture, to manufacture high speed rail trains for California.