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Rail News Home Rail Industry Trends

9/23/2003



Rail News: Rail Industry Trends

RSI convention: Expect more supplier consolidation, BNSF's Rose says


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Attendance was low, but rail-industry supplier interest was high during opening session keynote addresses at Railway Supply Institute Inc.'s (RSI) 42nd annual convention Sept. 22 in Chicago.

Burlington Northern Santa Fe Chairman, President and Chief Executive Officer Matthew Rose told attendees the rail supply industry should expect more consolidation and change to meet the Class I's needs.

"We want to have two large manufacturers in every component [we purchase]," he said, adding that the industry would need to add and subtract suppliers to enable BNSF to achieve that goal.

However, suppliers can expect Class Is' recent workforce subtractions to end and employment levels to rise modestly next year. Half of large roads' workforce will reach retirement age in six years and Class Is have added few skilled craftsmen to help implement emerging technology, Rose said.

Meanwhile, Association of American Railroads President and CEO Ed Hamberger told attendees that Transportation Equity Act for the 21st Century Act (TEA-21) reauthorization bills have stalled on Capitol Hill. He expected Congress to pass a short-term, five-month extension to TEA-21 this week, while reauthorization debates continue. However, Hamberger doubts Congress will be able to agree on a reauthorization bill next year.

American Short Line and Regional Railroad Association President Richard Timmons offered slightly better legislative news on Local Railroad Rehabilitation and Investment Act of 2003 (H.R. 876), which would provide short lines and regionals an income tax credit to help fund track- maintenance projects tied to 286,000-pound cars. The bill has 137 co-sponsors — inching closer to the association's goal of 200 — because the short-line industry is getting its message out, Timmons said, adding that the railroad industry still could be a better self-promoter.

During the convention's annual luncheon, RSI Chairman George Kline said more than 250 railroad and more than 800 supplier officials registered for the event, down from 2002 convention registrations. A few attendees noted that the absence of exhibits at this year's event might have affected attendance.

Jeff Stagl


Contact Progressive Railroading editorial staff.

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