Today's Headlines Today's HeadlinesTORONTO, April 21 (Reuters) -- Hopes for an early end to a two-day transit strike that has left 800,000 Toronto commuters scrambling faded early on Wednesday as last-ditch contract talks between the union representing the city's transportation workers and management dragged into the night.
The continuation of negotiations into early Wednesday, although a positive sign on the surface, ensured that residents of Canada's largest city would have to spend a third day getting to work by taxi, car, rollerblades, bicycle or on foot.
The Amalgamated Transit Union, representing 7,800 striking subway, bus and streetcar workers, offered on Tuesday to allow an arbitrator to settle their contract dispute with the Toronto Transit Commission.
The TTC agreed to the part of the proposal dealing with wages, including a tentative rise of 2 percent from April 1 this year, during an emergency meeting on Tuesday. However, it rejected the idea of submitting to arbitration other disputed issues, including health benefits.
The two sides had planned to make an announcement late Tuesday, but the extended discussions made an early morning start to transit services virtually impossible.
The stoppage followed weeks of negotiations that failed to reach a deal. Unionized TTC workers have had only a 1 percent pay rise in the past seven years. At one minute after midnight EDT (4:01 GMT) on Monday, they went on strike, paralyzing the transit system.
The Ontario provincial government, which could pass back-to-work legislation, comes back from a break on Thursday, but legislation would take days to enact.
In an effort to keep traffic moving, the separate suburban commuter rail system, GO Transit, added trains and buses, while the city banned parking on some major streets. Meanwhile, some parking lot operators have increased prices.
Any wage raise is expected to result in fare increases to as high as C$2.35 for a one-way ticket from the current C$2.00. The city has said it is determined to keep tax increases to a minimum while the province has been unwilling to increase grants to municipalities.
The average TTC worker makes about C$52,000 a year.
Toronto was last thrown into gridlock by a transit strike in 1991 that
lasted eight days.
BOSTON -- New England shippers can expect immediate improvements in intermodal service on at least two fronts following the sale of Conrail's operations in Massachusetts, the Journal of Commerce reported today.
The Conrail takeover by CSX Corp. and Norfolk Southern Corp. on June 1 has initiated changes for the region, which has traditionally lagged in intermodal development.
The clearances of antiquated Massachusetts bridges and tunnels have kept double-stack rail efficiency from reaching Boston, New England's economic center.
Although the Conrail sale may not lead directly to an opening of the region, the huge reshuffling in preparation has been one of the forces behind better double-stack access.
The big change has come from Norfolk Southern's agreement with Canada's CP Rail for an interchange with the Guilford Rail system at Mohawk, N.Y. To take advantage of the new link between the two networks, Norfolk Southern and Guilford have worked to raise clearances on both sides of the New York-Massachusetts state line.
The toughest work has been on the Hoosac Tunnel, a century-old rockbound route through the Berkshire Mountains in northwest Massachusetts on Guilford's Boston & Maine mainline.
Recent work on the tunnel and 23 bridges raised the route's clearance to the east from 18 feet, 3 inches to 19 feet, 6 inches, said Guilford Rail's president, Tom Steiniger.
The breakthrough was expected to allow the first double-stack train on the line to reach Ayer, Mass., sometime this month. Guilford's terminal at Ayer, 35 miles northeast of Boston, became a focus of the railroad's intermodal activity several years ago during an earlier partnership with CP.
Guilford is now developing the Ayer facility at the former Fort Devens Army Base with Kellaway Intermodal & Distribution Systems Inc., part of the Kellaway Group based in Randolph, Mass.
The mixed stack trains with high-cube and low-cube containers will run parallel to the Conrail mainline, which has carried a stack service to Worcester throughout the 1990s.
Conrail's Massachusetts track is being taken over by CSX Corp.
Dan Murphy, a CSX spokesman, said the company is spending $220 million on its "intermodal superhighway" from Chicago to New York and New England as part of a $500 million investment in the Northeast. Faster north-south service is also planned, reaching from Florida to New York and beyond.
The emergence of competing east-west stack services in Massachusetts comes despite the uncertain fate of a $110 million state-sponsored rail development plan signed by former Gov. William Weld in 1996 after three years of legislative battles.
The deal to raise bridges though cost-sharing with the railroads became law, but it was subject to a master agreement that was never signed. Guilford felt the plan favored the competing Intransit Container Inc. terminal in Worcester by assessing an extra charge on boxes moving farther east.
As a result, Guilford pursued its clearance work without drawing on state funds. The rail plan remains on the books, however, leaving open the possibility of further clearance upgrades all the way into Boston on the old Conrail line. CSX spokesman Bob Sullivan said the company will take over Conrail's commitments under the state plan.
Bill Rennicke, vice president at Mercer Management Consulting Inc. in Lexington, Mass., said the state can shed its image as an intermodal backwater, if it stops dwelling on its failed efforts to create networks that include dockside access to the Port of Boston.
The Massachusetts Port Authority's recent merger of container operations
at Conley Terminal in South Boston ended Massport's box business at Moran
Terminal in Charlestown, taking with it the last chance for dockside intermodal
service, which Guilford had tried to develop with a rail link to Moran.
MONTREAL, April 20 (Reuters) -- First-quarter profit at Canadian National Railway Co., Canada's largest railway, rose as its operating costs fell faster than the 4 percent decline in its revenues, the company said on Tuesday.
The Montreal-based railway reported first-quarter net income of C$138 million, or C$1.42 a share, compared with C$104 million, or C$1.21 a share, in the year-earlier quarter. Revenues slipped to C$1.02 billion from C$1.06 billion.
"We are very pleased with the results. I think that this is for us a critical quarter," CN President and Chief Executive Paul Tellier told reporters during a telephone conference call.
More than offsetting the 4 percent drop in revenues, CN's operating expenses for the latest first quarter declined 11 percent to C$782 million from C$875 million in the 1998 period. Costs dropped mainly because of lower expenses for labor and fringe benefits, material, fuel and equipment rents.
As a result, CN's operating ratio, a key measure that declines as a company becomes more productive, dropped to 76.8 percent in the latest first quarter from 82.6 percent a year earlier.
CN said automotive sector revenues rose 12 percent in the first quarter from a year earlier, while those for industrial products, forest products and intermodal operations increased 2 percent each.
But revenues from grain and grain products fell 30 percent, reflecting lower overseas sales. Coal, sulfur and fertilizers revenues declined five percent, affected by depressed demand for metallurgical coal, the company said.
Tellier said it is questionable whether grain sales and coal shipments will rebound in 1999, but the company expects the growth rates for its other business sectors to continue at the pace set in the first quarter.
CN said it expects the merger of its operations with those of Chicago-based Illinois Central Corp. to become effective on June 24. The U.S. Surface Transportation Board approved the merger last month. CN bought Illinois Central in 1998 for US$2.4 billion, forming a railway stretching along some 18,670 miles (30,045-km) of track in eight Canadian provinces down through Chicago to the Gulf of Mexico.
Merrill Lynch said on Tuesday it raised its rating on CN shares to long-term
buy from accumulate. CN shares rose C$0.80 at C$89.30 on the Toronto Stock
Exchange and were flat at $60 on the New York Stock Exchange on Tuesday.
LAREDO, Texas -- Federal Railroad Administrator Jolene Molitoris joined City of Laredo Mayor Elizabeth G. Flores today to discuss highway-rail grade crossing safety.
"Record levels of investment are bringing about improved rail safety, demonstrating President Clinton's leadership and emphasis on safety as the highest transportation priority," U.S. Secretary of Transportation Rodney E. Slater said. "We need to do more by continuing to work with state and local officials to increase state and local investment and enforcement on grade crossings."
In fiscal 1999, the U.S. Department of Transportation (DOT) provided $154.8 million to states to be used exclusively for highway-rail crossing improvements or elimination. An additional $314.8 million of funding for hazard elimination also may be used for eliminating or improving grade crossings. As part of TEA-21, Texas received $10.9 million in fiscal 1999 for highway-rail crossing improvements. In addition, $31.5 million in hazard elimination funds can be used to eliminate grade crossing hazards.
"We are conducting a series of community meetings around the country to raise awareness about the dangers of highway-rail crossings and discuss the tools available to assist Americans in reducing the risks at these crossings," Molitoris said.
"These kinds of meetings are important because they bring everyone to the table to discuss how we can become better equipped to deal with these highway-rail crossings. We live in a community dissected by railroads, and they are part of our everyday lives, so it's very important to recognize the dangers that these highway-rail crossings represent," Mayor Flores said. "But recognizing their danger isn't enough -- we must try every means to put the appropriate measures in place to ensure safety for the thousands of motorists who drive across them every day."
There are more than 259,000 existing highway-rail grade crossings in the United States. States and localities, working with DOT, have closed more than 33,000 such grade crossings since 1991. Texas has closed more than 2,000.
Five years ago, the DOT launched a multi-faceted initiative to save lives
at highway-rail grade crossings. Since 1993, there have been dramatic results
-- almost 29 percent fewer highway-rail crossing collisions, 32 percent
fewer highway-rail crossing fatalities and 30 percent fewer highway-rail
crossing injuries.
PARKVILLE, Mo. -- Parkville officials would like a railroad track switch eliminated and track relocation considered to avoid a repeat of last week's coal train derailment, the Kansas City Star reported.
The 26-car derailment heavily damaged two buildings, threatened others on Main Street and hampered business for days in the historic downtown district.
"The city needs to look at the whole thing to see that it doesn't happen again, period," said Mayor Bill Quitmeier.
Parkville officials hope to discuss safety issues such as track configuration and train speed with the Burlington Northern Santa Fe Railway.
But addressing those concerns falls to the railroad or federal law. And history plays a role. The rail line dates to the 1860s; many of the buildings near the tracks date to the 1880s.
"Both Parkville and the railroad are very old," said Steve Forsberg, a railroad spokesman. "It's a very tough situation for us to examine."
The railroad is studying the accident and operations in Parkville. "I think we share Parkville's concern about where people are accessing buildings and where they park vehicles," Forsberg said. "I've not seen another location where those two phenomena were so close to a main-line track. We're probably going to sit down with the city (officials) and talk through a number of these issues."
Among them:
Forsberg said grade improvements and crossing gates were city and state responsibilities, although the railroad would cooperate with improvements. He said he was not aware of a grade crossing ever having caused a train derailment.
Some community leaders say the tracks should be moved several yards south, away from the business district. That would eliminate a curve for the railroad. The current rail bed could be converted to pavement and used to connect Missouri 9 and Route FF, which would eliminate some traffic congestion downtown.
But the change would require the purchase of private property and state highway approval and expenditures.
"Moving tracks is extremely expensive," Forsberg said. "It costs $1 million a mile to build track from scratch."
Parkville would like to slow trains to 25 mph. Burlington Northern sets a 45 mph speed limit for itself inside the city, Forsberg said. The accident happened at 31 mph.
But train speeds are regulated by federal interstate commerce laws, said Missouri Rep. Fred Pouche, a Republican whose district includes downtown Parkville. Federal regulations were intended to supersede local laws so trains would not be unnecessarily slowed, said Pouche, who researched state regulations on Tuesday. Cities can file complaints with state commerce officials but are rarely successful in overriding railroad or federal policy.
Forsberg said speed was not a factor in the Parkville accident. Also, he said the coal cars are so heavy, at 110 tons apiece fully loaded, that slowing them would not eliminate the rumbling noise and rattling of buildings.
The danger is from having people and buildings so close to the tracks, he said.
Despite recent strong investment in Mexican railroads, a shortage of intermodal terminals has limited growth opportunities for intermodal business.
However, if Transportacion Ferroviaria Mexicana has its way, terminal availability will be changing soon, the Journal of Commerce reported.
Since winning the tender for the Laredo-Mexico City-Veracruz line in 1996, TFM -- the joint venture among Kansas City Southern Industries, Transportacion Maritima Mexcana and the Mexican government -- has been investing heavily in its rail network.
At a recent breakfast given by President Ernesto Zedillo Ponce de Leon for foreign investors, Landon Rowland, president and chief executive of KCSI, said TFM plans to invest $800 million during the 1999-2002 period. That's in addition to the $1.6 billion invested to date.
A large portion of this investment will be for TFM's intermodal service. Although intermodal business accounted for only 5 percent of TFM's total sales last year, things are changing quickly. The company expects intermodal to account for 8.4 percent of sales this year, according to Dan Beers, who heads up TFM's intermodal and automotive division. For 2003 Beers expects intermodal to represent up to 18 percent of TFM sales, or $170 in revenue.
"We are in the process of getting these trucks on the rail," he said, referring to the fact that more than 80 percent of cargo in Mexico is moved by highway.
To meet these ambitious goals TFM has been busy building terminals. By mid-2000 the company expects to have six projects completed that will greatly expand Mexico's intermodal options.
"Our growth estimates will seem conservative once the terminals are finalized," Beers said.
About 85 percent of Mexico's intermodal business today is centered in the Mexico City terminal of Pantaco. TFM has a 25 percent stake in the terminal, and Beers said expansion plans will double its capacity by the end of this year.
As part of the plan, TFM is building a terminal in the city of Toluca that is scheduled to open in July. Although the site is primarily designed to service Chrysler's truck plant in the area, Beers expects that within five years about half of the terminal's business will come from other shippers.
TFM is also building a terminal in Queretaro, a growing industrial town north of Mexico City. The site is scheduled to open by the first quarter of next year and will offer customers an alternative to the GMG facility, now the area's sole terminal.
A terminal should also be ready in the transportation junction of San Luis Potosi by the end of this year. Although there is currently a temporary terminal in the area, it is limited to container movement. The new site will be managed and operated by TFM and will have a customs area for trailers as well as containers.
Also slated for the end of this year is the inauguration of a new facility in Monterrey. Beers said the existing terminal is landlocked with no room for growth. The new terminal is designed to handle both containers and trailers and comes with its own in-bond facility.
Perhaps the most attractive new facility for cross-border clients will be the Jose Serrano Yard, commonly known as "mile-post nine." Located just outside of Laredo, the border town on the Tex-Mex line, (of which TFM is a part owner) the new terminal will allow for run-through customs clearance before entering Laredo, which should eliminate some sizeable bottlenecks in the region. The facility will also include a classification and storage yard.
"This allows traffic to flow from all U.S. railroads across the Tex-Mex and directly through Laredo," Beers said.
Since its privatization in 1996, TFM has made important equipment purchases. Company managers say that recent locomotive purchases make TFM's fleet the youngest in North America.
Beers also said TFM will be receiving 200 new 89-foot cars this year, as well as 60 double-stacks. However, it's essential to convince U.S. railroads that it's now safe to bring equipment into Mexico.
"There's a history of Mexico being a black hole for equipment," Beers said.
Long turnaround times and equipment losses when railroads were under government management has left some U.S. carriers with sour experiences. While keeping equipment in Mexico for over a month was the norm for government-run railroads, less fortunate carriers became absentee landlords as boxcars were converted into makeshift housing. However, Beers said things are changing.
"We now pay car hire and we're a member of the AAR," he said, referring to the Association of American Railroads. "We have taken the concern away."
In the past the turnaround time for a car from Laredo to Mexico City and back was 30 to 40 days. It now turns them around in eight to 10 days, and Beers expects that to be six days by next year.
Beers is confident that these changes will make a difference in the way U.S. railroads view Mexico. "Once they start letting equipment flow in and out of Mexico, cars will flow as free runners through the city just as in any city in the United States."
To make rail service more secure, TFM has beefed up its security force in the past year from 70 guards to more than 1,000 now. TFM management said the investment has paid off, with theft down 60 percent last year from 1997 levels.
Beers said theft for automobile service is at a level similar to that
of the United States. Most importantly, however, is that TFM currently insures
cars to up to $50,000 at no charge, with additional coverage available for
incremental fees.
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