As freight train volumes continue to grow on railroads across the country, applications submitted to the Federal Railroad Administration (FRA) for the establishment of Quiet Zones – stretches of railroads over which trains receive special permission not to blow horns at highway/railroad grade crossings –continue to increase as well. RLBA remains a leading national provider of Quiet Zone feasibility studies for both public and private entities across the United States. In 2016, RLBA completing three such assignments for the Town of Atherton, CA, the City of Garden City, GA and Oak Tree Development Group.
All three assignments began with an on-site inspection of applicable grade crossings to enabled RLBA to determine the condition of the existing infrastructure and to evaluate the potential improvements required to meet Federal Quiet Zone regulations. Additionally, in each assignment, RLBA utilized the FRA Quiet Zone Calculator to determine the least cost necessary to establish each Quiet Zone, in accordance with the minimum infrastructure requirements needed at each of the observed grade crossings. Finally, RLBA presented each client with an explanation of the steps involved in the qualification process, along with a preliminary estimation of costs to meet minimum initial requirements and a final report on RLBA’s findings and conclusions.
In early June of 2016 the Pacific Imperial Railroad (PIR) and Baja California Railroad (BJRR) formally agreed to a subleasing agreement in which BJRR would restore and operate PIR’s section of the long-dormant Desert Line. The Desert Line, which is owned by the San Diego Metropolitan Transit System (MTS), is leased to the Pacific Imperial Railroad between Plaster City, CA and the international boarder at Division, CA. Once in Mexico, the remainder of the railroad to Tijuana is operated by BJRR. The sublease agreement is the culmination of over a year’s worth of negotiation between the two railroads and MTS.
As part of these on-going negotiations, RLBA was engaged by MTS to facilitate the exchange of ideas and to recommend interchange and operating agreements between the two railroads. Due the extreme environment in which the rail line is located, RLBA quickly determined that the successful reactivation of the railroad required close cooperation between the two railroads beyond typical short line partnerships. To that end, several RLBA staff members spent a week on site in San Diego to meet with PIR, BJRR and MTS managements, as well as to conduct a physical inspection of the railroad. After evaluating the information gathered during the week in San Diego, the RLBA staff combined its extensive knowledge of the railroad industry and the circumstances on the ground in the subject territory to produce recommendations jointly to PIR, BJRR and MTS as to how the Desert Line could be operated most successfully.
In a detailed final report, RLBA made the strong recommendation that a PIR sublease of the line to BJRR would create the most efficient operation possible. RLBA also suggested that as part of the sublease, BJRR take on most, if not all, of the rehabilitation work on the line. Prior to RLBA’s recommendation, neither railroad nor MTS had considered such an arrangement, instead favoring a more traditional interchange arrangement. After reviewing the RLBA report and engaging in several follow-on discussions, all parties came to understand both the serious issues of implementing a traditional interchange agreement between the two railroads, as well as the numerous advantages of RLBA’s sublease recommendation. All three parties have since come to a formal agreement closely based on RLBA’s recommendation, resolving several years of contract disputes and achieving a significant milestone for the Desert Line.
On April 1 of 2016 RJ Corman Railroad Group, a leading short line railroad operator in the U.S., formally began operations of the former Carolina Southern rail line in North and South Carolina. The restoration of operations is the culmination of nearly two years’ worth of effort by local community leaders to save the rail line. As part of the these efforts, RLBA was engaged by a consortium of local North and South Carolina economic development interests to value the out of service rail line. RLBA inspected the line and produced a net liquidation valuation of the railroad. The RLBA valuation was then used as a starting point for negotiations with the then-owner of the railroad, who lacked the resources to bring the line back to service. These negotiations resulted in RJ Corman Railroad Group successfully acquiring the line and restoring rail service to the area.
RLBA was engaged by a confidential client to conduct an investigation of a flatcar that spilled its load and derailed. Within 24 hours of being notified of the derailment, RLBA was able to have an investigator on location. Following meetings with the plant manager, the individuals responsible for loading the railcar and the director of operations, RLBA investigator analyzed the derailment site. The field inspection included an analysis of the derailed equipment, inspection of the spilled load, and an examination of the track structure. RLBA also took time to assess the way in which the loads were secured on yet-to-be-shipped flatcars at the client’s facility, which was also verified by photographs the Client had taken of the derailed railcar prior to its leaving the facility. Following the trip, RLBA’s Manager of Mechanical Services, two Senior Mechanical Associates and its Director of Transportation Engineering worked collaboratively to determine the cause of derailment. Within one week of being engaged, RLBA had determined the cause of derailment and supplied the client with a detailed derailment report, complete with custom diagrams, photographs and engineering analysis.
In its April 2014 issue, Railway Age magazine named the Coos Bay Rail Link its Short Line Railroad of the Year. The magazine “has followed the rapid rise of Coos Bay Rail Link with interest and continuous coverage,” the article claims. “Coos Bay Rail Link’s rapid rise to prominence caught the attention of editors and industry officials alike.”
R.L. Banks & Associates, Inc. was engaged multiple times between the initial embargo of the rail line by its former owner in 2007 and restoration of rail service in 2011, and the RLBA staff is proud of the progress the line has made.
“My company has enjoyed assisting the Coos Bay Rail Link from its inception before the Surface Transportation Board to securing financing, rebuilding the rail line and soliciting a contract rail operator that ultimately began operating trains over the line in 2011,” said RLBA President Charles H. Banks. “The tenacity for success that the railroad, the communities through which it operates, Union Pacific and on-line shippers have displayed is the reason this unique railroad operates today.
A tunnel collapse resulted in an embargo of freight service on the line in 2007, forcing all rail shippers west of the collapse to haul their freight to Eugene or Portland by truck before it was transloaded into railcars. The additional costs associated with the double haul and transloading activities and the belief that the previous operator, CORP, had not acted in good faith to fix the tunnel problem caused the Port of Coos Bay to investigate the potential replacement of CORP by another short line railroad.
RLBA prepared six Verified Statements in support of a Feeder Line Application filed with the Surface Transportation Board (STB), pursuant to the Feeder Railroad Development Program. The Verified Statements addressed RLBA’s estimate of the: 1) Going Concern Value (GCV); 2) Net Liquidated Value (NLV) – Track Assets and 3) short line service startup and mobilizing the rail operator. A Self-Contained real estate appraisal report also was produced in this engagement under the direction of RLBA. The Port engaged RLBA to assist it in assessing the economics of the rail operation and to assist it in retaining a short line operator.
Specifically, RLBA’s President and other RLBA staff interviewed representatives of all major shippers on the line to ascertain: 1) historical rail traffic volume and shipper requirements information so as to develop future railroad freight traffic projections; 2) determine how much more it was costing shippers to ship by a combination of a truck haul to a rail transload than an all rail haul and 3) how volume might change in the future. RLBA’s Director of Transportation Engineering physically inspected the right of way and estimated future rehabilitation and maintenance costs. Also, RLBA is developing a Business Plan which will be used to both attract necessary financing and solicit short line operator interest.
RLBA also assisted in the preparation of a 2009 Federal Stimulus Program funding requests to return the Coos Bay Rail Link back to sustainable service. These requests funded repairs to four tunnels which were the initial cause of the rail line being removed from service. RLBA’s Director of Transportation Engineering physically inspected the line to determine other necessary repairs to return the line to a serviceable condition and assisted in the cost estimating those repairs. RLBA assisted in the development of additional ConnectOregon III funding requests.
Canadian Pacific, Ltd. (CP) engaged RLBA in 2013 to perform select, detailed studies in support of its then recently-announced sale of the former Dakota, Minnesota & Eastern (DM&E) “West End.”
RLBA’s Staff, under the leadership of John McLaughlin and Charlie Banks, performed a study to assist potential buyers in understanding costs and cost drivers associated with operating the West End as a 660 mile-long shortline railroad as opposed to a piece of a 14,000 mile-long Class I.
The five areas of study included: 1) determining the capital and maintenance costs associated with track infrastructure and equipment over the next decade, assuming current traffic levels; 2) ascertaining the number of mechanical, engineering and operating employees needed to operate the West End as a shortline railroad; 3) estimating the number of locomotives necessary to haul traffic of the West End as an isolated short line; 4) analyzing and forecasting trends in grain volumes by type and 5) opining as to management changes that could be employed to make the operation more efficient if performed by a third party purchaser.
In support of those five tasks, RLBA undertook an on-site inspection of nearly the entire DM&E West End, performed analysis of train size and routing, and employed available historical data concerning grain flows, species and climate to determine trends in future agriculture volumes by commodity. The final deliverable to CP, an investment-quality written report, was provided to interested buyers, one of whom, Genesee & Wyoming, Inc., is the company that has ultimately won the contract to acquire the 660 mile-long railroad for $210 million.