Through June 24, passengers are urged to call Amtrak at 800-USA-RAIL if they have travel plans through the affected areas on routes of the Los Angeles-Chicago route of the Amtrak Southwest Chief; Seattle/Portland-Chicago Amtrak Empire Builder and the San Francisco Bay-Chicago route of the Amtrak California Zephyr.

Those passengers with telephone contact information in their reservations are being called by Amtrak and offered options including future travel dates.

Southwest Chief, Trains 3 & 4

Service by the Southwest Chief between Kansas City and Chicago has been temporarily suspended since June 17 due to flooding on the BNSF Railway route in Iowa.

Alternate transportation by chartered motorcoaches will be provided between Kansas City and Galesburg or Chicago, with the exceptions of La Plata, Mo., Fort Madison, Iowa, and Mendota and Naperville, Ill. Passengers ticketed at those stops are being offered travel at other Amtrak stations or on other Amtrak trains.

Empire Builder, Trains 7/27/807 & 8/28/808

Service by the Empire Builder between St. Paul and Chicago has been temporarily suspended since June 10 due to flooding on the Canadian Pacific Railway in Wisconsin and the closing of a detour route since June 15.

Alternate transportation by chartered motorcoaches will be provided between St. Paul and Chicago, with the exception of Glenview, Ill., where passengers are being offered travel on Hiawatha Service trains are available as alternate transportation between Glenview and Chicago.

California Zephyr, Trains 5 & 6

Service by the California Zephyr between Chicago and Denver has been temporarily suspended since June 13 due to flooding on the BNSF Railway route in Iowa.

Alternate transportation by chartered motorcoaches will be provided between Denver and points in Nebraska, including Omaha. No alternate transportation is available to or from points in Iowa. Alternate transportation between Chicago and other points in Illinois will be provided by other Amtrak trains.

Amtrak regrets any inconvenience. This information is correct as of the above time and date. Information is subject to change as conditions warrant. Passengers are encouraged to call 800-USA-RAIL or visit Amtrak.com for schedule information and train status updates.

Since deregulation of the freight railroad industry in 1980, Class 1 freight ton-miles have increased 93 percent, while miles of track have decreased 40 percent, U.S. Rep. Corrine Brown, D-Fla., said. The U.S. Department of Transportation estimates that the demand for rail freight transportation will increase 88 percent by 2035, and their studies estimate that an investment of $148 billion in infrastructure expansion will be needed over the ext 28 years to keep pace with economic growth and to meet DOT’s expecteddemand, the Congresswoman added.

“Unfortunately, as freight movements have grown, so have the conflicts between freight and passenger trains, even though under existing federal law, Amtrak trains have priority over freight trains,” Brown said during a hearing last month. “This demand for space in the rail system has also caused unintended consequences for shippers.”

Freight traffic on U.S. railroads in 2007 was the second highest on record, according to the Association of American Railroads (AAR), following only 2006.

“Additionally, there is growing demand on the rail network for more than just freight movements,” U.S. Rep. James L. Oberstar, D-Minn., said during last month’s hearing. “In 2007, Amtrak moved 25.8 million passengers, the fifth straight year of record ridership. Additionally, commuter rail providers recorded 460 million trips in 2007.

“Congestion, heightened concerns over global warming, and rising gas prices will continue to push the demand for these alternatives to highway travel, and Amtrak and commuter rail must be able to continue to expand to accommodate their growing ridership,” Oberstar added. “Amtrak and commuter rail utilize portions of the freight rail network to provide service. However, their capacity needs are different from those of the freight railroads, meaning different capacity investments will be necessary if we want to continue to favor these modes.”

To help ease the congestion, some members of Congress are looking whether federal legislation needs to be passed, according to Oberstar.

“Unlike other modes of transportation, there is no dedicated stream of funding for rehabilitating, reconstructing, or expanding our nation’s rail network,” Oberstar said. “Some legislative proposals to deal with capacity concerns are circulating in Congress, including one to provide the railroads with a 25 percent infrastructure tax credit. I am currently reviewing that legislation.”

– Railfanning.org News Wire

– PRNewswire-FirstCall

The dividend is payable on July 28 to holders of record at the close of business on June 27 and is an eligible dividend pursuant to the Income Tax Act.

– PRNewswire-FirstCall

The Surface Transportation Board made its determinations of revenue adequacy for the seven Class I freight railroads (the Nation’s largest) for 2006.

A railroad is considered to be revenue adequate if it achieves a rate of return on net investment (ROI) equal to at least
the current cost of capital (i.e., the cost of borrowing) for that railroad. Congress directed the Board to conduct such revenue adequacy determinations on an annual basis.

In its April 15, 2008, decision in the Board proceeding entitled Railroad Cost of Capital, the agency determined that the 2006 rail industry cost of capital was 9.94 percent.

By comparing that figure to 2006 ROI data filed with the agency by the Class I railroads in their Annual Report R-1 Schedule 250 filings, the Board made revenue adequacy calculations for each railroad operating as of Dec. 31, 2006.

“Each year we remember those employees who have lost their lives or suffered injury in occupational incidents in an effort to continuously strengthen our focus on workplace safety,” said Executive Vice-President and Chief Operating Officer Kathryn McQuade. “Safety is our number one priority.”

Trains across Canadian Pacific’s 13,500-mile North American rail network, locomotives in CP yards and terminals, and crane operators in intermodal terminals will stop at safe locations for one minute of silence followed by one lone whistle as a further salute. CP employees working on the road will safely park their vehicles and observe one minute of silence at the same time. Shop workers and office employees, too, will observe a minute of silence.

“As a result of dedicated joint union-management Occupational Health and Safety teams across our rail network, Canadian Pacific has one of the best on-the-job safety records in the North American rail industry,” added McQuade.

Canadian Pacific’s personal injury frequency for 2008 is currently about 1.4 injuries per 200,000 employee hours, comparing favorably to a North American industry average of approximately 1.6 injuries per 200,000 employee hours according to Federal Railroad Administration (FRA) statistics, the railroad said. Personal injuries have declined 76 percent in the past decade and 24% in the first quarter of 2008 in comparison to the first quarter of 2007.

Measured by train incidents, CP has been North America’s safest large railway in six of the last seven years, according to the railroad.

On March 31, Canadian Pacific became the second large railroad to join the Confidential Close Call Reporting Pilot Project, a FRA-funded study of workplace incidents that could have resulted in an accident, but did not. The pilot project involves the FRA, Canadian Pacific, and employees represented by the Brotherhood of Locomotive Engineers and Trainmen (BLET) and United Transportation Union (UTU) in Portage and Milwaukee, Wisc., as well as certain BLET and UTU represented employees based in St. Paul, Minn.

– PRNewswire-FirstCall

Diluted earnings per share, excluding the effects of foreign exchange gains and losses on long-term debt and other specified items, decreased $0.03 as there was a favourable change in provincial tax rates which partially offset the impacts of severe winter operating conditions and the increase in fuel costs. However, foreign exchange gains and losses and other specified items, discussed below, reduced earnings by a further $0.20.

Among the highlights:

-   Total revenues rose three per cent to $1.15 billion from $1.12 billion
-   Income before foreign exchange gains and losses on long-term debt and other specified items decreased five per cent to $116 million from $123 million
-   Adjusted diluted earnings per share decreased to $0.75 from $0.78
-   Operating ratio was 82.7 per cent compared with 79.5 per cent

“The first quarter brought many challenges as we continued to face remarkable year-over-year increases in both fuel prices and the Canadian dollar,” said Fred Green, President and CEO. “At the same time, we had a difficult winter with prolonged cold spells and record snowfall which affected the entire supply chain and resulted in very tough operating conditions throughout the central and eastern parts of our network. Although our busy western corridor remained fluid, the winter weather had a significant impact on our overall ability to move traffic efficiently.”

“The team will continue to focus on execution excellence and we intend to exploit all opportunities to improve efficiency including cost management, yield improvement and other strategic initiatives. Despite the tough first-quarter and continuing headwinds, our goal is still to deliver positive earnings growth in 2008.”

Freight revenues increased 10 per cent in the quarter, as global demand for bulk products remained solid, but the foreign exchange impact of a stronger Canadian dollar reduced this growth to three per cent. Grain, coal and sulphur and fertilizers all saw growth in the six to seven percent range. Industrial and consumer products increased 10 per cent over first-quarter 2007, built on a foundation of continued strength in Alberta. Intermodal revenues were also up four per cent. These gains were offset, in part, by decreases in forest products and automotive of 19 per cent and 12 per cent respectively, reflecting a weaker US economy.

Operating expenses in the quarter increased 13 per cent, but the positive foreign exchange impact of a stronger Canadian dollar reduced the increase to seven per cent. The majority of this increase was due to higher fuel costs and less efficient operations resulting from the challenging winter operating conditions.

“We faced a tough first quarter with substantial headwinds, and as we look to the balance of the year, we anticipate the continuing effects of a slowing North American economy on our business. Although demand remains strong for our bulk portfolio, we expect to see an impact on our intermodal business, and further deterioration of our merchandise business. We also expect high fuel prices, including the price of WTI and refining margins, will continue,” said Mike Lambert, CFO. “As a result, we are reducing our earnings guidance for 2008 and due to the ongoing economic uncertainty we are also widening the range of our guidance. We now expect that diluted earnings per share (before foreign exchange gains and losses on long-term debt and other specified items) will be in the range of $4.40 to $4.60, a change from $4.65 to $4.80.”

The 2008 estimate assumes an average currency exchange rate of the U.S. dollar at par with the Canadian dollar. Crude oil prices are expected to average US $98 per barrel, while crack spread is expected to increase an average of US $7 per barrel in 2008 compared with 2007 with an estimated all-in fuel price of US $3.35 per US gallon for the year. WTI is updated from US $87 per barrel.

CP expects to grow total revenue by four to six per cent in 2008, unchanged from previous assumptions as volume declines will be offset by fuel recovery. Total operating expenses are expected to increase by six to eight per cent, revised from the original assumption of three to five per cent due principally to higher fuel cost.

CP expects its tax rate to be in the 27 per cent to 29 per cent range, a change from the original outlook of 29 per cent to 31 per cent as a result of decreasing Canadian tax rates.

CP expects free cash to be approximately $200 million, adjusted downwards from the original outlook of in excess of $250 million in 2008, resulting from the expected decline in Operating Income.

The 2008 outlook includes the projected earnings of the Dakota Minnesota & Eastern Railroad (DM&E) on an equity accounting basis for the full year.

– PRNewswire-First Call

“This risk-reduction program provides an indispensable opportunity to analyze ‘close-call’ events to help identify and correct potential safety problems across the industry,” said Boardman, adding that the pilot program is a key element of his agency’s National Rail Safety Action Plan.

Under a waiver granted by the Federal Railroad Administration (FRA), the Canadian Pacific Railway (CP) this week joins the Union Pacific Railroad in the Close Call Reporting System Demonstration Pilot Project. Approximately 350 Wisconsin-based CP employees can report ‘close call’ incidents without fear of sanction or penalty from the railroad or the federal government.

Boardman said that FRA currently requires railroads to routinely report a wide range of accidents and incidents. Even though ‘close calls’ are not accidents in the technical sense, they are potentially serious nonetheless such as failing to properly test an air brake before leaving a yard, proceeding beyond approved track authority while operating a train in dark (non-signaled) territory and lifting objects that place employees at risk for minor personal injuries, he explained.

The cumulative results of ‘close call’ reports are being studied to determine areas of potential risk and to develop solutions to prevent and minimize their occurrence in the future, Boardman said. Any reports that require immediate action will be handled promptly. Similar programs already exist in the aviation and mining industries.

In order to participate, the CP, the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the United Transportation Union (UTU) each ratified an agreement with the FRA to allow employees to make confidential reports of ‘close calls’ to the U.S. Department of Transportation’s Bureau of Transportation Statistics.

UP employees at the nation’s largest rail yard in North Platte, NE, began reporting ‘close calls’ in February 2007. FRA is actively working with the Alaska Railroad so that it may become the third railroad in this program. In addition, the Bush Administration has requested $1.2 million in its proposed FY09 budget to operate and expand this pilot program.

For more information, visit http://www.fra.dot.gov/us/content/1913.

The Memorandum of Settlement will now be sent to the union membership for ratification, which is expected to conclude within the next eight weeks.

Details of the tentative agreement will be released following ratification of the agreement by union members.

– PRNewswire-FirstCall

“We had a very open and constructive dialogue and we left with a mutual understanding of each others needs and concerns,” said Glenn Forbes, CEO of the Mayo Clinic. “We both expressed a strong and firm commitment to work collaboratively, both together and with the community of Rochester, to ensure the highest degree of safety moving forward.”

In September, Canadian Pacific said it planned to purchase the DM&E and its subsidiaries for nearly $1.5 billion. Pending the Surface Transportation Board’s approval, the DM&E will become part of Canadian Pacific’s U.S. rail network.

The STB review process is expected to take less than a year.

In the meeting, the Mayo Clinic and Canadian Pacific outlined their respective priorities and expectations for rail operations in the Rochester area, should the STB approve the transaction, the clinic said.

In February, the Federal Railroad Administration denied the DM&E’s controversial $2.3 billion Railroad Rehabilitation and Improvement Financing loan application, saying it posed an unacceptably high risk to federal taxpayers. DM&E applied for the loan to finance construction of a new 280-mile rail line to Wyoming’s Powder River Basin coal mines and to reconstruct approximately 600 miles of existing track in South Dakota and Minnesota.

The loan application had been a source of contention between the DM&E and many community members, including the Mayo Clinic. According to the clinic, Canadian Pacific said it has made no decisions about its potential to access new coal haulage business in the Powder River Basin area.

“CP has a best-in-class process for relationship development and issues resolution with neighbors and communities in the areas through which we operate,” said Fred Green, President and CEO of Canadian Pacific. “Our solid community reputation is fundamentally based on CP’s commitment to operational safety and environmental stewardship. We were pleased to share this with the Mayo Clinic representatives.”

Officials from both sides consider the meeting a success.

“This meeting was the beginning of a long-term constructive relationship based on open dialogue, mutual understanding and compromise,” Forbes said. “We look forward to hosting CP officials here in Rochester during the first quarter of 2008 to build on the progress made in this first meeting, and the opportunity for CP officials to meet with other members of the Rochester Coalition and other key stakeholders on this critically important issue.”

– Railfanning.org Wire Reports