The Blanchard Company

Marketing and Management Support
for Feeder Railroads

The Railroad Week in Review 5/31/97
featuring: The Breakup of Conrail

Ready reference: homepages for Conrail | CSX | Norfolk Southern

(NOTE: This week's issue is abbreviated and late due to my involvement with the ASLRA's Eastern Region meeting in Burlington VT.)

Canadian National has told the Canadian Transportation Agency that losses incurred by the Canadian Wheat Board in connection with grain sales in the 1996/97 crop did not come as a result of railroad negligence. In its filing CN said it had taken "reasonable steps" to have the right equipment in the right place at he right time and invited the CTA it can "identify ways in which the Canadian grain handling system as a whole can be improved and lead to essential reforms."

In a joint release CSX and NS announced they have accepted more than 94% of CR's outstanding shares for payment, which will be made "promptly" through the jointly owned acquisition company, Green Acquisition Corp. According to the release, "All Conrail shares acquired will be placed in a joint voting trust pending STB approval of the deal. Shares not purchased in the tender offer will be converted into the right to receive $115 per share following closure of the deal. The joint voting trust precludes either acquiring railroad from controlling CR ahead of the STB's official blessing.

The STB has announced a 350-day schedule to review the Conrail transaction. Don Seale, NS VP for Merchandise Marketing, said in his remarks to the ASLRA Eastern Region, notes that one reason for the longer schedule may be due to a desire to avoid reopening the case later on environmental issues. This is evidently what's happened on UP-SP and the Board does not want a repeat. Seale also notes that shipper response had been generally in favor of the 255-day expedited process.

For a good list of railroad websites, including those of shortlines and regionals, see the RailServe homepage, Several of the small railroads' pages are the work of Mike Klass, a shortline consultant out of Ohio. Others are listed as "unofficial," and it would appear they were developed by local enthusiasts and model makers. By and large, the information is helpful and in some cases even entertaining. One disturbing aspect of the site, however, is the "Train Hopper's Page" which is an education on how to ride freight trains.

Railroad employees, regardless of the size of the employing railroad, ought to be genuinely concerned with the message: "Hopping freight trains is OK if you don't get caught or hurt and it's fun." Wrong message. Train-hopping is not only illegal but hazardous to one's health. Given the number of trespassers killed every year the exposure to lawsuits train hopper represent to the railroads, the practice must be discouraged. Please e-mail the site sponsors, them know of your concern, and ask that the page be pulled.

RailAmerica has brought on more rail talent. Peter Espy, formerly with LTK and Amtrak in operations analysis, moves to Chili as GM on the Empresa de Transporte Ferroviario S.A. ("Ferronor"). Tom Hawksworth moves to Marketing Manager - Western Region from sales management on the SP. Jim Nichols was named Chief Mechanical at the West Texas & Lubbock, where he's joined by new hire Richard Thull as GM. Nichols comes from Guy Brenkman's Pioneer Rail Group; Thull joins RailAmerica from a 21-year stint in operations on the UP.

From Greenbrier (NYSE: GBX) comes word that they now have on the books some $88 MM in major new orders for approximately 1,700 rail cars. There are 975 double-stack cars to be built for TTX Company, and 725 conventional rail cars to be built for various customers. The cars will be built at the company's Gunderson and TrentonWorks. Anticipated earnings for the quarter ended yesterday range from three to six cents a share, below expectations, due in part from a highly competitive one car market. As these new orders reflect a more favorable product mix, the company anticipates improved earnings beginning in its fiscal fourth quarter ending in August.

Wisconsin Central is starting operations between Wausau and Hayward WI over a former CNW branch recently bought from UP. The 18-mile line connects with the WC main at Hayward Jct. and has a two-mile over to Schofield from Kelly. The two line segments serve ten principal customers that generate about 12,300 carloads annually. Principal commodities include roofing granules, paper products, steel, lumber and building materials from Wausau. Nearly 13,000 cars on 13 miles is a nice transaction.

To wrap up this week in review, a bit of serendipity. My 20-year old niece Emily, a budding economist and newly-minted Honors grad from Wellesley, was telling me what she'd uncovered working on a paper on the role of transportation in developing markets and improving communication. On returning to this project, I found this gem on my screen: "LITTLE ROCK, Ark., May 29 /PRNewswire/ -- Artrain's month long tour to Arkansas, begins here June 3-5. In an effort to recognize and pay tribute to the arts, the Arkansas Arts Council has awarded grants to seven communities to make an Artrain visit possible. Artrain, the nation's only traveling fine arts museum on a train is touring the exhibition Art in Celebration! from the Smithsonian Institution. The rolling art gallery offers an incomparable museum experience and features more than 30 commissioned artworks from 28 artists. Union Pacific Railroad is contributing its services to transport Artrain's five rail car museum to each community in Arkansas."

So much for the Week in Review; please don't forget to write to The Train Hoppers Page!

--Roy Blanchard

Ready reference: homepages for Conrail | CSX | Norfolk Southern

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