WEB EXCLUSIVE: Q&A with Amtrak Chairman Anthony Coscia JANUARY 2013 progressiverailroading.com/cover ProgressiveThe Information Leader for the Railroad Industry AUGUST 2014
OperateOp Amtrak aass a more nimble, ccustomer-focusedu bbusiness?u The rrailroad’sai leaders bbelievee they must
2014-15 C&S PRODUCT INFORMATION DIRECTORY PAGE 35
RailroadR il d IInnovatort Award: Canadian Pacifi c’s KEITH CREEL Product Roundup: RAIL FASTENERS
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C2_PR_0814_lr voestalpine NORTRAK.indd C2 7/28/14 11:30 AM PROGRESSIVEPROGRESSIVE RRAILROADING VolumeVolume 5757,, No. 8 August 2014 | CONTENTS | 1
COVERCCOVEER STORYSTORY • PPAGEAGE 12
Operate Amtrak as a more nimble, customer-focused business? The railroad’s leaders believe they must
FEATURESFEATURES 21 A ssticklertickler forfor ssuperioruperiior seservicervice ForFor CP’sCP’s KeithKeith Creel,Creel, operatingopperating an efficient and reliable railroad is part of his DNA
26 Product development at a consistent clip Eight rail fastener/fastening system Photo courtesy of Amtrak|Chuck Gomez suppliers describe their offerings Cover design by Meredith Jensen
DEPARTMENTS 4 Upfront 53 Reader Information Center SPECIAL SECTION 54 Pr ofessional Services Directory 35 2014-15 C&S Product 54 Classified Information Directory Featuring product and service 56 Fr om the Editor provider listings and more than 75 product categories
”We need to move from a siloed, functionally driven organization to a more nimble, customer-focused business.” — Jeff Clements Chief of Corporate Research and Strategy, Amtrak -p.13
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01_PR_0814 TOC.indd 01 7/31/14 2:37 PM PROGRESSIVE RAILROADING 2 | ONLINE | August 2014 Progressive Sign up for our RSS feed progressiverailroading.com/ rss/prnews.asp Recently posted web-exclusive content:
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Progressive Railroading’s Daily News The most-read Daily News stories last month: ■ “LACMTA’s board OKs Purple Line Extension construction contract” (7/25/14) ■ “Tentative BNSF, SMART Transportation Division pact targets one-man crews” (7/21/14) ■ “Wisconsin swings deal to purchase 70-mile line from UP” (7/17/14) www.progressiverailroading.com/news
LOGGING IN
Angela Cotey Jeff Stagl Julie Sneider senior associate editor managing editor associate editor
exico’s transport ministry opened ecretary Foxx has made improv- orfolk Southern’s latest ad is Ma tender for the construction of “Sing safety, and particularly the “N‘Ya Got Trouble’ meets Busby a 130-mile high-speed rail line con- safe transportation of crude oil, a Berkeley, and I can’t get enough of necting Mexico City and Queretaro, priority in his fi rst year.” dot.gov blog it.” — Matthew Borst, with work scheduled to begin later marking Anthony Foxx’s fi rst anniver- modernmatthew.tumblr.com this year. www.reuters.com sary as U.S. transportation secretary
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03_PR_0814 BlackDecker PROTO.indd 03 7/22/14 9:04 AM PROGRESSIVE RAILROADING 4 | August 2014 Upfront
[ TRANSIT ] ARTIC plunge
By Angela Cotey, Senior Associate Editor
It’s been about 20 years since Intermodal Center (ARTIC) in for Clark Construction Group, which is Anaheim, Calif., officials first November. The facility will transform building the facility. began talking about building an Anaheim’s transportation system, ARTIC also was built to intermodal facility in the down- providing faster, more convenient meet Leadership in Energy and town area. They knew the city connections to various modes and Environmental Design Platinum stan- needed a hub where people could major destinations throughout the dards — the only intermodal facility access various transportation area, city officials believe. in the United States to meet the en- services and reach destinations “We have this core density in our vironmental standards, Burrus says. A such as Disneyland, the Anaheim city, and we needed to be able to number of sustainable features were Convention Center, Honda Center, bring transportation options to it incorporated into the facility, includ- Angel Stadium and area hotels. so we could tie together the various ing a system that air conditions only In 2006, when Orange County destinations,” says Natalie Meeks, the first 12 to 15 feet above the voters approved an extension of Anaheim’s public works director. ground; the rest is natural air that transportation sales tax Measure is kept cool through special flooring M — which included a category Location is everything and strategically placed jet diffusers, for gateway transportation centers ARTIC will replace a small, outdated Burrus says. — city officials were able to piece train station that serves Metrolink Construction coordination was together a funding plan that would and Amtrak. The new intermodal challenging at times. Workers built enable them to design and build the center is located between Angels new half-mile-long platforms on each Anaheim’s new $185 million facility. Stadium and the Honda Center, side of the tracks while trains were intermodal center Construction began in 2012, providing access to the venues that still active, requiring close coordina- is scheduled to and the city is on pace to open the house the city’s two professional tion between Metrolink, Amtrak and open in November. Anaheim Regional Transportation sports teams, the Angels and Ducks. construction officials. ARTIC also is about three miles away “There were probably 20 or 30 from the Disney parks, convention different scopes of work that needed center and hotels that serve them. to be coordinated,” says Burrus. “We In addition to Metrolink and have a full-time person that does Amtrak access, the station will nothing but coordinate with the feature 13 bus bays surrounding railroads.” the building that can connect to The effort will be worth it come the Orange County Transportation November, project officials say. Authority’s bus system, as well as ac- “Orange County is very car-centric, commodate tour buses, charter buses so we needed to be able to show that and shuttles that travel to Anaheim transit is for everybody — not just resorts, says Meeks. people who don’t own a car,” says When the station was designed, Meeks. “We wanted a high-quality fa- city officials sought to make a state- cility that was inviting, aesthetic and ment. The arched, dome-like struc- really spoke to transit being a viable, ture “definitely has a cool factor,” convenient choice and a pleasurable CLARK CONSTRUCTION GROUP says David Burrus, project executive experience.” ■
04_PR_0814 UpfrontLead.indd 04 7/28/14 3:35 PM American-made Solutions - An Answer for Lasting Growth Siemens’ answers for mobility help people and business reconnect with their city and one another.
Intercity passenger rail ridership is at an all-time Siemens electric locomotives will increase mobility and high, bringing new challenges to cities and transit improve performance with reliable vehicles. Siemens new organizations. Amtrak has seen the highest annual locomotives will better connect our cities, making travel ridership totals since 1971, increasing the demand to easy, reliable and affordable. Somewhere in America our move people and attract business in an environmentally- team of more than 60,000 employees spends every day conscious way. That is why more than 800 Americans creating answers that will last for years to come. are focused on designing and building energy-efficient Amtrak Cities Sprinter electric locomotives for the Northeast and Keystone Corridors.
usa.siemens.com/railsystems
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05_PR_0814 SIEMENS Mobility.indd 05 7/24/14 9:01 AM PROGRESSIVE RAILROADING 6 | UPFRONT | August 2014
Carloads Carried 2014 % change TRAFFIC Numbers from 2013 U.S. CLASS I RAILROADS Upfront BNSF Railway ...... 2,598,884 3.4 CSX Transportation ...... 2,064,071 4.5 LAC-MEGANTIC: ONE YEAR LATER Since the July Kansas City Southern...... 368,155 3.9 Norfolk Southern ...... 1,893,982 0.0 6, 2013, crude-by-rail (CBR) disaster in Union Pacific ...... 2,763,890 5.6 Lac-Megantic, Quebec, railroads have worked to CANADIAN CLASS I RAILROADS improve safety practices for transporting crude CN ...... 1,703,406 3.4 oil. According to the Association of American Canadian Pacific ...... 847,952 -1.1
Railroads, railroads have reviewed and changed MEXICAN RAILROADS operating practices and protocols; raised CBR Ferrocarril Mexicano S.A. de C.V...... 377,424 -0.6 standards above federal requirements; called for Kansas City Southern de México ...... 260,733 8.7 more stringent tank-car design; increased com- munication with communities to reinforce local preparedness with first responders; continued to 377,424 upgrade rail infrastructure to prevent emergen- -0.6 % CHANGE
cies; and worked to ensure responders have been Cumulative, 26 weeks 2014 • Source: AAR Policy and Economics Department properly trained. ■
Frac sand fuels Wisconsin’s rail-traffic Rail is future of Bakken growth A jump in rail traffic across oil transport, CEO says Wisconsin over the past 10 years has fueled The leader of one of the biggest rail shippers an increase in public complaints about of Bakken crude oil from North Dakota says train noise, related motorist delays and that railroads — not pipelines — provide the safety concerns, but the rail-traffic growth better option for transporting crude oil. Global has not led to an increase in grade crossing collisions, reports Partners L.P. Chief Executive Officer Eric Slifka WisconsinWatch.org. Wisconsin Railroad Commissioner Jeff said in a July 14 speech that rail offers “flexibility, Plale attributes the traffic increase in part to the rapid growth optionality, rapid transit, market penetration, all the of frac sand mining in the state. Wisconsin now is the No. 1 frac while requiring low levels of capital,” according to www.rollcall.com’s report sand producer in the United States, producing 26 million tons on the speech. And despite accidents involving Bakken crude transported annually. Track unused for years is now handling traffic daily, via rail over the past year, Slifka said less oil is spilled per ton mile on rail prompting railroads to invest in infrastructure upgrades. ■ than on other transportation modes. “Rail may actually be the safest mode of transportation of crude,” he said. ■
Carloads By Commodity* *carloads originated
U.S. CANADIAN MEXICAN RAILROADS RAILROADS RAILROADS 2014 % 2014 % 2014 % Numbers Change* Numbers Change* Numbers Change* Grain 524,660 19.8 250,500 15.0 28,954 -26.9 238,687 Grain mill 250,991 6.7 40,833 2.0 2,649 -33.5 * Food 162,170 -3.9 54,438 1.4 28,221 2.4 2.4% CHANGE Chemicals 788,477 1.4 300,703 -0.7 36,262 -1.0 Petroleum 380,961 7.0 188,423 7.7 10,816 -4.2 Coal 2,881,380 1.1 238,687 2.4 3,882 5.9 Lumber 92,324 5.8 72,638 -4.8 306 25.4 Paper 157,995 0.0 78,057 -7.6 860 -8.7 2,881,380 Ores 146,593 -8.5 273,393 -15.1 44,703 8.6 1.1% CHANGE* Metals 275,874 2.2 59,170 0.6 46,812 11.4 Iron & steel scrap 111,507 1.5 22,136 -2.5 6,894 -10.1 Autos 434,765 1.2 130,114 -8.2 103,932 13.9 Aggregates 549,092 7.1 88,335 25.7 2,499 38.0 Minerals (nonmet.) 129,083 2.8 32,409 -17.7 752 0.9 * 5.9% CHANGE Stone, class, glass 201,466 6.9 35,596 1.2 51,339 -7.0 3,882 Waste/scrap 81,792 0.4 9,592 5.0 2,205 24.1 Cumulative, 26 weeks 2014 • Source: AAR Policy and Economics Department * Percent change from 2013
06_PR_0814 UpfrontTraffic.indd 06 7/24/14 8:59 AM PROGRESSIVE RAILROADING August 2014 | 7
RailConnect Index® of Short-Line Traffic SHORT LINE Year-to-Date Period Ending 6/28/2014, Week 26 Upfront CARLOADS HANDLED 2014 2013 %Change Coal 399,684 379,895 5.21 Grain 387,430 379,020 2.22 OKLAHOMA O.K. Farmrail System Inc. in June received federal Farm & Food (Excl. Grain) 158,850 148,478 6.99 authorization to proceed with a 14-mile track-rehabilitation project Ores 88,649 100,015 -11.36 between Sayre and Erick, Okla., that won a $2.6 million TIGER V Stone, Clay, Aggregates 427,015 396,884 7.59 Lumber & Forest Products 159,200 155,520 2.37 grant last year. Farmrail expects work to be mostly completed by Paper Products 198,581 198,080 0.25 year’s end to facilitate the construction of a regional frac-sand Waste & Scrap Materials 150,576 155,639 -3.25 Chemicals 650,888 648,048 0.44 distribution facility. ■ Petroleum & C oke 130,068 140,597 -7.49 Metals & Products 276,102 262,777 5.07 A ‘STRONG’ COMMITMENT TO VETS Pacific Harbor Motor Vehicles & Equip. 74,706 79,528 -6.06 Intermodal 540,590 541,485 -0.17 Line Inc. is a partner in the “10,000 Strong” initia- All Other 64,464 64,518 -0.08 tive introduced by Los Angeles Mayor Eric Garcetti TOTAL 3,706,803 3,650,474 1.54 in mid-June that calls for over 100 private and 40 public companies in the area to hire 10,000 military veterans by 2017. Other partners include BNSF 2014 20132 Railway Co. and Union Pacific Railroad. ■
SEEKING PRIVACY The American Short Line and Regional Railroad 387,430 379,0203 Association (ASLRRA) in June announced the U.S. Department of Defense is considering whether to privatize the U.S. Army’s military +2.22%+2 CHANGE railroad operations, which would involve 73 installations with switch- ing operations. ASLRRA partnered with the Association of American Source: GE Transportation’son’s Optimization SolutionsSollutioti ns (Data (Data from 428 U.S. U S and Canadian railroads) Railroads to coordinate responses to a request for information. ■
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07_PR_0814 UpfrontShortLine.indd 07 7/23/14 12:44 PM PROGRESSIVE RAILROADING 8 | UPFRONT | August 2014
MINDING THE GAP New York’s OPEN FOR SERVICE Last Metropolitan Transportation month, two new transit-rail Authority is facing a $12 bil- lines opened for service. The lion gap in its 2015-19 capital Washington Metropolitan Area TRANSIT program, which is projected Transit Authority launched the Upfront to clock in at $26.6 billion. 11.7-mile first phase of the The agency expects to receive Silver Line, running between about $14 billion from bonds, the East Falls Church Metrorail HIGH-SPEED PROGRESS IN CALIFORNIA Last month, as well as state, federal and city station and the Reston area of the California High-Speed Rail Authority launched early funding. ■ Fairfax County, Va. A second construction work on the first phase of its statewide phase will extend the line to BIG APPLE BOUND The Dulles International Airport and high-speed rail system between Fresno and Bakersfield. Massachusetts Department of Loudon County, Va. Meanwhile, Workers are demolishing structures to clear the way for Transportation recently pur- Tuscon, Ariz., officials marked chased 37 miles of track from the opening of the Sun Link California High-Speed Rail Authority rail infrastructure. Private invest- the Housatonic Railroad Co. Streetcar, which operates along ment in the project might soon for $12 million. Running from a four-mile route connect- follow. The authority has received Pittsfield to the Connecticut ing the University of Arizona border, the segment is a “major and University of Arizona formal letters of interest from step forward” in establishing Medical Center with the Tuscon the private sector, following Gov. passenger-rail service from Convention Center, 4th Avenue Jerry Brown’s budget deal that allocates a portion of western Massachusetts to New Business District, downtown York City, state officials said. area and Mercado District. ■ the state’s cap-and-trade money to the project, ac- In the meantime, the state will cording to an article posted on the Oakland Tribune’s spend about $35 million to website. The cap-and-trade dollars create the first state upgrade the track for passenger service. ■ funding stream for the high-speed rail program.
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08_PR_0814 UpfrontTransit.indd 08 7/30/14 1:36 PM PROGRESSIVE RAILROADING August 2014 | 9
People FREIGHT Rio Grande Pacific man James Cummings as Corp. named Bob Howery vice chair. Also, SFRTA named senior VP of operations and Richard Chess director of Spotlight promoted Scott Wollack finance. to general manager of the Anacostia Rail Holdings has named John Goldman New Orleans and Gulf Coast LABOR Brotherhood of president of the Louisville & Indiana Railroad Railway. … Union Pacific Railroad Signalmen members (L&I). He succeeds Mike Stolzman, who joined Railroad VP of Engineering re-elected W. Dan Pickett Colo Railroad Builders L.L.C. Goldman joined the Joseph Santamaria was as president for the next L&I in late 2012 and most recently was vice presi- elected American Railway four years. … The National dent. He has 19 years of railroading experience Engineering and Maintenance- Mediation Board elected Harry and previously served CN as superintendent of the Iowa and Valley of-Way Association governor Hoglander chairman through Zones. He began his railroad career as a switchman in 1995 with for the 2014-17 term. June 30, 2015. Norfolk Southern Railway in Louisville, Ky.
TRANSIT Stephen Bland SUPPLY SIDE John O’Bryan was named chief execu- was named CEO of American tive officer of the Nashville Railcar Leasing L.L.C. … GE and Travis Chamberlain, GM & Co. Inc., Engineers & Metropolitan Transit Authority. named Mark Hutchinson of the Wallula switching site Architects. ... South Florida Regional integration leader for the pro- in Washington. … Robert Transportation Authority’s posed acquisition of Alstom’s Clifford was named VP and IN MEMORIAM Richard (SFRTA) board elected Miami- power and grid businesses. … manager of the Tampa, Fla., Sprague, 85, a retired Dade County Commissioner Watco Transportation Services area at Parsons Brinckerhoff. senior vice president of the Bruno Barreiro as chair and named Stacy Grant GM of the … Kenneth Hancock was former Bangor and Aroostook Broward County business- Great Northwestern Railroad appointed chairman of Wilson Railroad, died July 5.
09_PR_0814 UpfrontPeople.indd 09 7/28/14 11:42 AM PROGRESSIVE RAILROADING 10 | UPFRONT | August 2014
Marketplace M&A AECOM Technology Skanska, Traylor and Shea Spotlight UNION TANK CAR CO. Corp. and URS Corp. reached joint venture to construct the a definitive agreement under 3.9-mile first phase of the Union Tank Car Co. (UTLX) which AECOM will acquire all Purple Line Extension subway. recently met a milestone outstanding shares of URS for ... AXION International with the fabrication and a combination of cash and Holdings Inc. received an in-to-service completion stock valued at $4 billion. … $890,000 purchase order for of its 5,000th compressed gas tank car since 2010. The jumbo cars are The Greenbrier Cos. Inc. and ECOTRAX® composite ties from designed to transport propane, butane and other liquefied petroleum Watco Cos. L.L.C. completed a large, multinational industri- gasses, the production and distribution of which is associated with the their formation of a joint al company. … Ballast Tools growth in North American natural gas supplies. At current production rail-car repair venture, GBW Equipment launched btequip. levels, UTLX expects to build more than 6,000 units before 2014’s end, Railcar Services L.L.C. com for customers to research according to the company. Over the past 25 years, UTLX manufactured MOW equipment attachment more than 25,000 similar pressure tank cars ranging in capacity from MECHANICAL Bombardier options. … Bechtel Corp. 25,000 to 34,000 gallons. Transportation recently and Network Rail completed a massive expansion of Reading marked the official opening La Robla and Pola de Lena. ... communication signals as Station in London. … Sweco of its new Bogie Technical A CAF Signalling-led part of positive train control received a $14.8 million Center in Siegen, Germany. ... consortium obtained a implementation. contract to modernize the I.D. Systems Inc. received an $132.8 million contract to rail line between Stockholm’s order from a U.S. railroad to implement a Level 2 ERTMS Central and Southern stations. deploy the VeriWise™ Track system for the Vandellos- and Trace system on a fleet Tarragona section of the CORRECTION of intermodal containers. The C&S The Spanish Ministry Mediterranean Corridor. Loram Maintenance of Way Inc. HP 60-month contract is valued of Development awarded a ... Martin Environmental Shoulder Ballast Cleaners feature at more than $500,000. $63.6 million contract to an Solutions Inc. expanded its digging buckets that are up to Ansaldo STS-Instalaciones industry services to include 30 inches wide. A photo cap- MOW Los Angeles County Inabensa joint venture to Class I, short line and regional tion in an article (“Better Ballast Metropolitan Transportation deploy and maintain ERTMS railroads that are installing Management”) published in our Authority’s board approved a signaling systems on a high- wayside poles on rights-of- June issue incorrectly reported the $1.6 billion contract with the speed-rail line between way to transmit and receive digging bucket width.
Meetings
SEPT. 3-8 — GLXS 2014 grade crossing SEPT. 21-23 — Railway Supply Institute OCT. 12-15 — American Public symposium. University of Illinois at Urbana- and Coordinated Mechanical Associations Transportation Association’s Annual Champaign. http://ict.uiuc.edu/railroad/GLXS/ Annual Conference. Meeting and Expo. Houston. Visit www.apta. overview.php Montreal. www.rsiweb.org com for information on the meeting, and www.aptaexpo.com for details on the expo. SEPT. 10-11 — Fundamentals of Railway SEPT. 23-25 — North East Association of Train Control and Signaling. Philadelphia. Rail Shippers 2014 Fall Conference. State OCT. 14-16 — Railway Tie Association www.epd.engr.wisc.edu College, Pa. www.nears.org Annual Symposium and Technical Conference. Orlando. www.rta.org SEPT. 14 — Progressive Railroading’s Rising SEPT. 23-26 — InnoTrans 2014. Berlin, Stars recognition dinner. Chicago. To be held Germany. www.innotrans.com NOV. 20-21 — RailTrends® 2014. W New in conjunction with the American Association York Hotel. www.railtrends.com SEPT. 28-OCT. 1 — American Railway of Railroad Superintendents Annual Meeting. Engineering and Maintenance of Way JAN. 7-10 — NRC Conference & NRC-REMSA www.progressiverailroading.com/risingstars Association Annual Conference and Exhibition. Hollywood, Fla. www.nrcma.org SEPT. 14-16 — American Association of Exposition. Chicago. www.arema.com Railroad Superintendents Annual Meeting. OCT. 7-9 — Maintaining and Inspecting Chicago. www.supt.org For more meetings, see Railroad Track. Madison, Wis. www.epd.engr.wisc.edu Progressive
10_PR_0814 UpfrontMarketplaceMeetings.indd 10 7/28/14 11:32 AM FREE INFO: Circle 109
11_PR_0814 PDI - POWER DRIVES.indd 11 7/22/14 7:58 AM PROGRESSIVE RAILROADING 12 | COVER STORY | August 2014
Operate Amtrak like a more nimble, customer-focused business? The railroad’s leaders believe they must
AMTRAK | CHUCK GOMEZ
12-20_PR_0814 CoverStory.indd 12 7/30/14 2:56 PM PROGRESSIVE RAILROADING August 2014 | 13
been coached on ways to improve the passenger experience. Spending has been curtailed and revenue increased in order to keep Amtrak’s operating sub- sidy to a minimum. Meanwhile, man- agement is trying to ensure the right people with the right skills are in place to help support the railroad’s end goals. “Every time we spend money in the wrong way, that’s a problem. Every time a train is late, that’s a problem,” says Coscia. “Our job is to create pas- senger-rail alternatives for a large cross- section of the American public, and do it in a way that is wrapped around a sustainable business model.” Regarding the latter, Amtrak al- ready has made some strides. In fi scal year 2010, the railroad’s operating sub- sidy stood at $565 million. In FY2014, it was $340 million. Chief Financial Offi - By Angela Cotey, Senior Associate Editor cer Gerald Sokol expects that fi gure to drop further in FY2015. IN 2011, AMTRAK OFFICIALS un- preservation,” says Amtrak Chairman He attributes the lower subsidy to veiled a strategic plan that called for di- Anthony Coscia. “Today, Amtrak is in what he would characterize as “fairly viding the organization into six business the business of selling a service that is robust revenue growth for an industry lines in order to help the railroad better in great demand.” that is relatively mature.” The past sev- serve customers and manage operating Now, it’s time to capitalize on it. To eral years, revenue has increased any- and fi nancial performance. Since then, that end, Boardman & Co. have institut- where between 2 percent and 4 percent Amtrak leaders have appointed manag- ed an “operate like a business” directive annually, in large part because of grad- ers to oversee the business lines. that calls for taking a hard line on ex- ually increasing ridership and “modest” Now comes the hard part: executing penses, continually seeking to grow rev- ticket price increases, Sokol says. the plan. And in order to meet customer enue, becoming more fi nancially trans- service and fi nancial sustainability ob- parent and accountable, and providing The value of a dollar jectives, Amtrak’s culture needs to shift. the best possible customer service. Amtrak offi cials are more closely exam- “Historically, Amtrak has been a very Of course, Amtrak, which relies on a ining expenses, too. Boardman took a strong railroad command-and-control government subsidy, never will be able harder line on spending when he joined organization,” says Chief of Corporate to operate the way unsubsidized enti- the railroad, says Sokol. Research and Strategy Jeff Clements. ties try to. “He has adopted this philosophy “We need to move from a siloed, func- “Amtrak is required by their main of running the railroad like a business, tionally driven organization to a more funding source — the U.S. government and the defi nition of that is that every nimble, customer-focused business.” — to do all sorts of things they wouldn’t dollar we spend has to create value for The national intercity passenger have to do if they were operating like a Amtrak,” he says. “The company has railroad is positioned to meet the chal- business, and that puts them in a very taken a hard look at its costs, making lenge, Amtrak offi cials believe. For one, challenging situation,” says Joshua strategic decisions on where we should President and Chief Executive Offi cer Schank, president and CEO of the Eno and shouldn’t be spending money.” Joe Boardman has been with the rail- Center for Transportation, a nonprofi t The railroad is going through the road for nearly six years now, making organization that aims to improve FY2015 budget process now, and fi - him the second-longest-serving chief transportation policy. “They have long- nance offi cers have grown more ag- in Amtrak’s history. The leadership sta- distance routes that are not profi table, gressive about questioning department bility has given the management team so what’s the business reason for pro- managers on every budget request as time to not only create a long-term plan, viding those services? There’s a social they try to determine why each dollar but see it through. And they are able to service aspect to it.” is being spent, Sokol adds. focus more on the long term because of That said, Amtrak’s customer-ser- “What value is it bringing? Is it in- federal funding stability and — perhaps vice and fi nancial-sustainability shift creasing revenue? Is it government as a prerequisite to that — strong rider has been a noticeable one, Schank says, mandated? It forces people to go back demand. and in that respect, it’s no longer busi- and analyze and question themselves “I think the focus at Amtrak for ness as usual. Technology has been on why they’re coming forth with bud- many years was on survival and self implemented and employees have get requests,” he says.
12-20_PR_0814 CoverStory.indd 13 7/30/14 2:56 PM PROGRESSIVE RAILROADING 14 | COVER STORY | August 2014
Amtrak offi cials have worked to reduce debt, as well, which Amtrak offi cials hope the new reporting method will give peaked at $3.9 billion in the mid-2000s and today stands at about Congress a clearer picture of the fi nancial progress Amtrak has $1.5 billion, says Sokol, who joined Amtrak in November 2013. made, as well as where capital infusions are needed. Continu- “Amtrak went through a pretty active period of using capital ing to lower the operating subsidy could make political lead- and grant dollars to pay off high-yield debt, refi nance and put ers more willing to invest capital money in the railroad, too. things into leases,” he says. “The operating subsidy can continue to come down, no The railroad also has changed the way it reports its fi nancial question, if we simply hold expenses fl at and continue to grow information to Congress. Amtrak previously reported num- revenue — it’s simple math,” he says.
Since 2010, Amtrak has reduced its The price is right operating subsidy by $225 million. A new revenue management system could help on the revenue-growth front. Offi cials in the sales and marketing department are in the midst of implementing a system that can automate pricing based on ridership and demand. “We can make pricing much more dynamic and fl uid, sort of like the airlines have now,” says Sokol. “For example, if we know the fi ve o’clock Acela is booked, we can automatically AMTRAK | CHUCK GOMEZ adjust pricing to try and push people to the four o’clock or six o’clock train, which might have some seats left.” bers for the railroad as a whole. This year, for the fi rst time, In many respects, the focus on customer satisfaction and the railroad presented fi nancial information for each business fi nancial sustainability go hand-in-hand. One of the best ways line, which shows the profi ts and/or losses for the Northeast to increase revenue is to grow ridership, and Amtrak’s sales Corridor, state corridors and long-distance routes. Offi cials also and marketing team has launched a series of initiatives dur- outlined capital requirements for each service. ing the past several years to improve the passenger experience. “That way, they can see much more clearly where the rev- Chief among them is an electronic ticketing system imple- enue is coming from, what the expense base is, how much mented two years ago that enables passengers to download money we’re making, where we’re breaking even, where we’re tickets on their mobile device. losing money,” says Sokol. “Say you wanted to switch to an earlier departure time. Be-
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15_PR_0814_lr RAILWORKS.indd 15 7/23/14 10:52 AM PROGRESSIVE RAILROADING 16 | COVER STORY | August 2014
fore, you’d have to go to the ticket coun- sengers informed, too. Railroad workers side dedicated radio network that would ter and hope you could get through early now can track in real time where trains support broadband and WiFi on trains. enough to get a ticket issued,” says Chief are across the entire system, and Amtrak The railroad plans to conduct a pilot Marketing and Sales Offi cer Matt Hardi- has developed algorithms that enable along 10 miles of track in the Northeast son. “Now, you can do it right on your the railroad to more accurately predict Corridor to determine if it provides the phone, get confi rmation, and get right train arrival and departure times, says level of service Amtrak offi cials want. on the train.” Hardison. Now, offi cials are working to If so, they hope to expand the network Amtrak since has been working to create a new national standard for dis- throughout the Northeast Corridor. update the “nuts and bolts” of the e-tick- playing the information in stations and “Our goal is to deliver true broadband eting system, which enabled the railroad on platforms. to customers that allows them to use to begin issuing electronic vouchers last the Internet on the train much like they year. Riders previously had to visit a sta- Staying connected would at home — if they want to stream tion to obtain a printed voucher if they Going forward, one of the biggest pas- Netfl ix or send or receive very large fi les, wanted to exchange or refund tickets. senger demands — and Amtrak technol- they can do that,” says Hardison. The railroad also is continually up- ogy challenges — will be upgrading WiFi Improving the passenger experience dating apps for iPhone, Android and on trains. The railroad fi rst launched always is top of mind for those in the Windows phones, and updating the WiFi on Acela trains in 2010, and since sales and marketing department, regard- mobile website. The efforts have given has expanded it to trains throughout the less of what the latest company directive riders more options, such as the ability Northeast, California and the Midwest. might be. Arguably, the technologies that to view multiple fare classes or check But demand for bandwidth shot up and have been and will be implemented are schedules while on the go. slowed the system. not so much about increasing customer “Incrementally, we have been able So in 2013, Amtrak implemented focus as they are about ensuring passen- to remove impediments to travel for a fourth-generation wireless backhaul gers are provided with the modern-day our customers, and improve the entire that supports communications from the amenities they have come to expect. But reservation and ticketing experience,” train to trackside in an effort to speed the in Amtrak’s case, with limited resources, says Hardison. WiFi service. To develop a longer-term technology investment has become a A locomotive telemetry system im- solution, Amtrak earlier this year issued choice. plemented in 2011 is helping to keep pas- a request for proposals to build a track- “The strategic plan has given us more
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17_PR_0814 Plasser American.indd 17 7/22/14 9:01 AM PROGRESSIVE RAILROADING 18 | COVER STORY | August 2014
“Incrementally, we have been able to remove impediments to travel for our customers.” — Matt Hardison, CMO
AMTRAK | CHUCK GOMEZ
clarity on what our priorities are. As a result, when we get Operations DJ Stadtler. around the table to talk about capital improvements — know- “It’s created a competitive environment where everyone ing that customer service and fi nancial performance are critical wants to be the best,” he says. “We didn’t always have that here.” — we’re making trade-offs, with the goal of meeting those pri- Keeping customers happy has proven to be more diffi cult orities,” says Hardison. “That has signifi cantly accelerated the of late, particularly on long-distance routes. On-time perfor- investments we’re making.” mance has suffered because host freight railroads are dealing On the operations side, those priorities have led to an in- with traffi c surges they didn’t necessarily expect, says Stadtler. creased focus on keeping passengers happy, from the conduc- As a result, it’s become more diffi cult for the freight railroads tor addressing riders to department managers ensuring the to get passenger trains through the network in a timely fashion. right equipment is in place at the right time. “In those cases, we can’t control on-time performance, but Amtrak’s operation department recently launched a praise- we can control the customer experience,” says Stadtler. “When to-complaint program, under which conductors hand out we have late trains, we’re becoming more vocal with announce- cards to passengers asking about their onboard experience. The ments, telling riders why we’re delayed, what we’re doing to responses are tracked by employee and by train, and opera- fi x it and the estimated schedule from here on out.” tions offi cials now are issuing scorecards that show which lines If a train is going to be too far off schedule, operating of- have the best praise-to-complaint rate, says Vice President of fi cials now will consider canceling it.
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12-20_PR_0814 CoverStory.indd 18 7/30/14 2:56 PM Since 2010, Amtrak crews have installed WiFi on trains operating in the Northeast, California and the Midwest. “We were frequently celebrating the fact that we got a train through, even if it was 12 hours late or even if we had a lot of issues associated with it,” says Stadtler. “But what was the customer experience? Would we have been better off canceling the train, apologizing to passengers, and then booking them on another train?” Optimal solutions Optimizing train consists will go a long way toward limiting the frequency of such occurrences, Stadtler believes. Planning for the Thanksgiving holiday, for example, now begins in March so the railroad can ensure it has enough cars on routes that have had sold-out trains in recent years. Staffi ng and train- consist planning will be a top priority heading into this winter, too, after Amtrak was caught off guard in some areas during the particularly nasty winter of 2013-14. Again, it traces back to making sure customers are provided with the type of transpor- tation service they expect, says Stadtler. “It’s not the trains that create revenue — it’s the customers. The goal should be that every passenger that gets off the train says they had a great trip and can’t wait to ride again,” he says. All employees play a role in helping Amtrak achieve its fi - nancial and customer satisfaction goals. It’s crucial, then, for workers to understand and support the mission. To that end, offi cials in the human capital department are working to create more of a performance-oriented culture within Amtrak. “We’re looking at developing a competitive advantage for the business by ensuring we have the right workforce aligned AMTRAK | CHUCK GOMEZ
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12-20_PR_0814 CoverStory.indd 19 7/30/14 2:56 PM PROGRESSIVE RAILROADING 20 | COVER STORY | August 2014
to the strategy,” says Chief Human The railroad also has implemented a beyond that, and it needs to be some- Capital Offi cer Barry Melnkovic. “We pay-for-performance plan that rewards thing that will move the performance have to enroll the hearts and minds of all workers who meet their assigned goals. needle for Amtrak.” employees.” At the beginning of each fi scal year, Non-agreement employees meet One way to do it is by showing them Amtrak managers set three to fi ve goals with their manager several times each the money. After the strategic plan was for non-agreement employees that align year to get a feel for how they’re stack- introduced, Amtrak created a short-term with strategic plan goals. ing up against the goals. Employees are incentive program for non-agreement “Goals were set before, but a lot of reviewed at the end of each fi scal year; employees based on reducing losses, them weren’t really goals — they were those who meet or exceed their goals re- becoming more effi cient and improving just part of that person’s job description,” ceive a merit increase; those who don’t customer satisfaction. says Melnkovic. “A goal typically goes won’t get an extra dime, says Melnkovic. Hiring help The human capital department also is moving toward behavior-based inter- view training, using profi le and assess- ment software that help hiring manag- ers ensure they fi nd candidates that are the best fi t for Amtrak. The program analyzes a candidate’s integrity, as well as his or her ability to deliver customer satisfaction, be collaborative and operate with a safety focus. For existing employees, Amtrak is implementing a Total Rewards and Inte- grated Talent Management Strategy. The initiative will better link benefi ts — such as compensation, wellness programs and educational assistance programs — with professional-advancement initiatives such as career and executive develop- ment, training, succession planning and talent management protocols. “An employee here once told me that Amtrak is a great place to come to ob- solete your career,” says Melnkovic. “We’re out to change that dynamic, to show Amtrak is a great place to grow Amtrak King Street Coach Yard (Seattle, WA) your career.” New Equipment Maintenance Facility and Administration Building To that end, Amtrak is looking to ink Baker’s Role: Construction Management and Value Engineering deals with “some major universities” for CMAA Project Achievement Award-Winner executive leadership development, and is piloting a professional development program, Melnkovic adds. A tradition of excellence in passenger rail services ... FY2014 served as a transitional year of sorts for Amtrak, with the business A future of innovation with global reach and mobility. lines offi cially set up and functioning. In FY2015, railroad managers will be better able to gauge how their efforts are mak- Planning • Permitting • NEPA • Railway Design ing a difference by measuring changes in Yard & Related Facilities Design • Program Management operating performance, operating ratio, Construction Management/Inspection safety and customer satisfaction, says chief strategy offi cer Clements. “Making our strategy operational is David C. Wilcock, P.E., Vice President–National Market Leader - Railroads and Transit the heart of what we’re working on,” he [email protected] says. “Our mission is to move America where it wants to go, and we’re getting clear about what we’re about.” ■ 1.800.553.1153 • www.mbakerintl.com Email comments or questions to [email protected].
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12-20_PR_0814 CoverStory.indd 20 7/30/14 2:56 PM PROGRESSIVE RAILROADING August 2014 | RAILROAD INNOVATOR AWARD | 21 A stickler for superior For CP’s Keith Creel, operating SERVICE an effi cient and reliable railroad is part of his DNA
By Jeff Stagl, Managing Editor
KEITH CREEL LONG HAS BEEN a believer that an extremely well-run railroad is more fl uid, reliable and profi table. Since he was appointed Canadian Pacifi c’s presi- dent and chief operating offi cer 18 months ago, Creel has been trying to turn CPers into believers that the Class I — which had been struggling both operationally and fi nancially for several years — could become a well-oiled railroad. Creel, 46, has served as Chief Executive Offi cer E. Hunter Harrison’s right-hand man at CP in trying to instill reliable operational performance, forge an operating- focused management team and engage employees in performing tasks more con- sistently. The railroad’s second-quarter fi nancial and operational results released on July 17 revealed some fruits born from those efforts. Figures from what constituted the strongest second-quarter fi nancial perfor- mance in the Class I’s history show total revenue climbed 12 percent to $1.7 bil- lion, operating income jumped 40 percent to $587 million and the operating ratio dropped 6.8 points to a record 65.1 compared with second-quarter 2013 results. In terms of operations, train weights rose 9 percent, train lengths increased 7 percent, fuel effi ciency improved 5 percent and locomotive productivity posted a 5 percent gain on a year-over-year basis. Keith Creel (second from left) prefers CP is benefi ting from Creel’s “strong leadership and operational expertise” as to keep “his boots on the ground” by the railroad continues to post progress, said Harrison in an email. Harrison’s been engaging employees in the fi eld to impressed by Creel since the two worked together at the Illinois Central Railroad discuss problems, he says. (IC) in the mid-1990s and at CN in the 2000s. Creel hit the ground running at CP after “a very successful operating career” CANADIAN PACIFIC
21-25_PR_0814 ProfileKeithCreel.indd 21 7/30/14 10:01 AM PROGRESSIVE RAILROADING 22 | RAILROAD INNOVATOR AWARD | August 2014
at CN and the IC, said Harrison — one style of John McPherson, who was the that included his evolution as a tactician IC’s senior VP of operations when he of “precision railroading,” which calls worked with Creel from 1996 to 1999, for strictly meeting train schedules to and later became the railroad’s president reduce terminal dwell time and im- and CEO. McPherson engaged all types prove asset utilization. of employees and was comfortable with “I have worked with many talented all people, says Creel. railroaders over the last four decades “He treated everyone the same,” he and Keith is by far one of the best oper- says. “I like to engage with people and ating talents that I have ever seen,” said have my boots on the ground, and see Harrison. things for myself.” A strategic thinker, Creel is renowned Creel quickly learned how vital yard in rail circles for his operating acumen and terminal operations are to running and passion for service-performance an effi cient railroad, says McPherson. excellence — traits he believes have “He understands that traffi c patterns seeped into his DNA. are dynamic and will roll up his sleeves Because of the talents he’s developed and work with schedule design to con- and displayed over the past 20 years “If you don’t sweat tinually improve the transportation ser- while boosting operational performance vice plan,” says McPherson. “Not only at three Class Is, Creel is the 2014 recipi- the little stuff, you did Keith become profi cient in transpor- ent of Progressive Railroading’s Railroad can’t take care of tation, but he spent considerable time Innovator Award. He will receive the the big stuff.” getting to understand the mechanical award — which recognizes an individ- and engineering facets of the business.” ual’s outstanding achievement in the rail — Keith Creel In preparation for the CN/IC merger, industry, and counts Harrison among its Creel was transferred to Battle Creek, recipients — at Progressive Railroading’s Mich., in early 1999 to serve as super- annual RailTrends® conference to be held intendent of operations for the Grand Nov. 20-21 at the W New York in New Truck Western (GTW), and in mid-2000, York City. weekends off,” he says. “But I got he was appointed general manager of into operations fi rst to understand the the Michigan Zone within the Midwest A railroading newbie product, and it gets into your blood.” Division. Although he’s now considered an Creel later served as a terminal When he started, the GTW was a operating guru, Creel had no idea he trainmaster in Tulsa, Okla., and a divi- terrible performer in every way pos- would be entering the rail industry sion trainmaster in Wichita Falls, Texas. sible and wasn’t a fun place to work at, after he graduated from Jacksonville In 1996, he joined the IC as a termi- says Creel. It took three years to boost State University in 1992 with a bach- nal trainmaster in Memphis, Tenn., to performance along with morale. elor of science degree in marketing. He be closer to his Alabama home. Soon Then, Creel began to see “people also served the military in active and afterward, he had his fi rst encounter with smiles on their faces” around the reserve duty from 1985 to 1993, includ- with Harrison, the IC’s CEO at the time, GTW as employees developed more of ing time as a U.S. Army commissioned who called Creel at the Memphis yard a sense of pride, he says. offi cer during the Persian Gulf War in tower to fi nd out why 10 cars had been “They felt the success,” says Creel. Saudi Arabia. left off a train. In 1992, a friend told Creel about an “I had heard he had a big personality Setting an example operating job at the Burlington Northern and I heard that big voice on the line. Some of the key drivers to Successville: Railroad. It seemed appealing, based on It wasn’t what I envisioned as a CEO, treating all employees with dignity and his degree and Army background. to be involved at that level,” says Creel. respect, eliminating department and “I had operations and management “I wanted to get to a point to know the craft/offi cer lines of separation, and experience in the military,” says Creel. business as well as him, to be always leading by example. “I liked how a railroad is similar to the questioning. If you don’t sweat the little Case in point: While Creel was military, a 24/7 operation and you’re stuff, you can’t take care of the big stuff.” superintendent of operations at GTW on-call all the time.” Creel later served as director in 1999, the assistant superintendent He joined BN as an intermodal of corridor operations in Jackson, in Battle Creek Yard contacted him at ramp manager in Birmingham, Ala. — Miss. During his three years at the 2 a.m. on a Saturday about a crew hous- his native state — then entered a cor- IC, he learned the business “from ing problem. porate management trainee program in A to Z” and “how to make it all Creel was told there was nowhere 1993 to utilize his degree. work,” says Creel. He also began to to house arriving train crew members “You could choose either a market- absorb what it takes to motivate peo- because all hotels in the area were ing or operations path, and I chose ple to do well, especially those who sold out and all the rooms at the typi- marketing because I thought it was don’t perform to their potential. cal crew hotel were occupied or dirty a Monday-through-Friday job with It helped to emulate the management with no staff available to clean them
21-25_PR_0814 ProfileKeithCreel.indd 22 7/30/14 10:01 AM
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23_PR_0814 RailTrends.indd 23 7/24/14 3:46 PM PROGRESSIVE RAILROADING 24 | RAILROAD INNOVATOR AWARD | August 2014
until 9 a.m. Creel got dressed, went to the crew hotel and That transformation was guided by Creel in part because of persuaded the managers to allow himself and the assistant management-style lessons he drew from Gordon Trafton, a superintendent to clean the rooms, he says, adding that they former CN SVP he’s known for about 20 years, including 15 immediately made rooms available as each one was cleaned. years they worked together at the IC and CN. “Crews were able to tie up and get their much-deserved Trafton “wasn’t a screamer or a yeller” and didn’t demean rest so they could run trains as soon as they were rested in people, but employees knew what his expectations were and order to keep our customers’ freight moving,” says Creel. what would happen if they didn’t meet them, says Creel. “As leaders, we get paid to solve problems and make things “I wanted to be that type of leader,” he says. happen — at times, extraordinary circumstances require Creel has become an effective leader even though he didn’t untypical solutions and efforts to get the job done.” know railroading from the get-go, says Trafton, adding that Creel’s an information sponge with a passionate drive. ‘Success breeds success’ “I felt I had that drive myself, but Keith’s drive is second The level of performance you receive from employees is to none,” he says. the level you demonstrate you are willing to accept, Creel Creel hasn’t changed much over the years, either, remain- believes. Anything less than best efforts are unacceptable ing energetic and easy to get along with, yet “he’s gotten because “success breeds success,” he says. smarter and more savvy,” says Trafton. In early 2002, Creel was promoted to vice president of “Keith hones in on something and tries to fi gure it out and CN’s Prairie Division in Winnipeg, Manitoba. He later was what the issues are, then drives for an end result,” he says. named senior VP of the western region, followed by SVP of “He is dedicated to solving issues.” the eastern region, then executive VP in mid-2007. Creel completed the Advanced Management Program at Winds of change continue to blow Harvard Business School in spring 2009. He was promoted Now at CP, Creel continues to problem-solve to help drive to COO in early 2010. improvements in fi nancial and operational performance. The During his tenure at CN, Creel played a role in merging three Class I previously was managed from a marketing instead of different railroads — the GTW included — that are considered an operations perspective, and didn’t properly invest capital the three legs of the Class I’s system. As operations improved at to foster more reliable service, he says. all three, CN became a “last place to fi rst place story,” says Creel. So far, Harrison, Creel & Co. have assembled an operating-
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