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Rail News: Passenger Rail

Updates from US Railcar, FreightCar America, Koppers, RMI and ShipXpress


• Yesterday, US Railcar L.L.C. and American Railcar Industries Inc. (ARI) announced the formation of US Railcar Co. L.L.C., a joint venture to design, manufacture and sell diesel multiple units (DMUs) — and “re-establish FRA-compliant DMU production in the United States,” said US Railcar LLC Managing Member Barry Fromm in a prepared statement. Fromm, who also is chairman and chief executive officer of Value Recovery Group Inc. (VRG), led a group of initial investors that purchased assets from the former Colorado Railcar Manufacturing Co., which ceased operations in 2008. ARI and VRG representatives each will make up half of US Railcar’s board. Said ARI President and CEO James Cowan: “Through this partnership, we look forward to being an integral part of that new growth with modern passenger rail equipment built in the USA.” Added U.S. Railcar Co. President and CEO Michael Pracht: “These are extraordinary times with growth opportunities for passenger rail in the U.S.”

• FreightCar America Inc. reported fourth-quarter 2009 sales of $49.4 million and a net loss of $5.5 million. Sales declined 10 percent from third-quarter sales of $55.1 million and were “down significantly” — as in 81.8 percent — compared with fourth-quarter 2008 sales of $271.9 million, according to a prepared statement. The company delivered 697 rail cars during the quarter, an 80.1 decline compared with fourth-quarter 2008’s 3,624 deliveries. For the year, FreightCar America posted sales of $248.5 million, a 67 percent decline compared with 2008 sales of $746.4 million. “Our performance this year reflects the severity of the industry downturn we are facing,” said President and CEO Ed Whalen. “The first half of the 2009 was relatively strong and exceeded our expectations as we worked off our backlog and gained some additional orders. However, the absence of any meaningful order activity in the second half of 2009 put significant downward pressure on earnings.” So far this year, the car builder has received orders for more than 3,000 new rail cars to be manufactured and delivered over the course of 2010 and 2011. “We expect that the new car market in 2010 will be even more difficult than in 2009, but we will take the necessary steps to protect the company and ensure we are well positioned to capitalize on new business opportunities when the recovery gets under way,” Whalen said.

• Koppers Inc., a wholly owned subsidiary of Koppers Holdings Inc., recently acquired a crosstie procurement business — including land and equipment — from Barham-Sevier Tie Co. Inc. Terms weren’t disclosed, but Koppers execs expect the asset purchase to result in additional revenue of $8 million to 10 million annually. “We intend to continue pursuing accretive incremental business in this distressed environment to enhance our market position,” said Koppers President and CEO Walt Turner in a prepared statement.

• South Carolina Public Railways plans to implement RMI’s RailConnect® Transportation Management System, mCrew module for remote train crew reporting and ShipperConnect® to provide customers with real-time shipment visibility. In other RMI news: The supplier recently received Union Pacific Railroad’s Partnership Award. Within the past year, RMI has “substantially enhanced” its OASIS Terminal Operating System (OASIS TOS) to support UP’s HUB group business, chassis roadability initiatives and enhanced UMLER data utilization, according to a prepared statement. The award marks the second time in less than a year that RMI has been recognized as a “valued service provider” by a Class I due to  benefits derived from OASIS TOS, according to the company.

• Web-based software and service solution provider ShipXpress Inc. recently expanded its sales team by appointing two vice presidents of sales and marketing: John Flournoy and David Kennedy. Flournoy has a range of rail industry sales and marketing experience, including stints with Trinity Industries Inc., GE and CSX Transportation. He’ll be based in the Cincinnati area and will work closely with “large industrial customers.” Kennedy, too, has worked with CSXT, as well as with an ethanol marketing company. He’ll set up shop in Jacksonville, Fla., and will focus on planning, organizing and implementing the development of “specialized service offerings” for the ethanol industry.