Wednesday, December 30, 2009

January newsletter

Delmarva Timetable
News of the Delmarva Model Railroad Club
January 2010
Matt Schramm, Editor

Next MeetingThe next meeting will be held on Wednesday, January 6, 2009 in the Club meeting room.

Presidents Message

Well, the first two weekends of Open House are behind us and a huge THANK YOU goes out to all those who helped make it a success. John Steplowski called today to tell me that the grand total received was $ 2871.95. That will be a real help towards our mounting expenses to keep the Club functional.. It would be difficult to thank everyone personally who helped make this program go over so well but I do think an extra thanks should go to Matt Schramm and Tim Burlingame for all their work around the building. Also to Greg Coughlin and family, Ed ( the Conductor ) Stogran, Pete Genero for the white elephant table and Mary Deeter for her help at the door.

Thanks also to all of our Engineers, while it starts out being a lot of fun, it can also wear you down after 3000 trips around the layout. I know I was running my train Westbound all day Saturday and Jeff told me I would have to go Eastbound on Sunday just to unwind. We have two more weekends to go and if anyone has any suggestions for changes or improvements, don’t hesitate to bring them up. Again, thanks for everyone’s help and I think I’m looking forward to the next two events.
Patrick Malronny

Mail vs E-mailWith the cost of postage going up 2 cents on the 11th of May, I would like to make a plea to all the snail-mailers that if you can get an e-mail account, it would definitely help the club. Right now it costs roughly $250.00 per year for postage, ink, and paper to get the snail mail editions out. If any of you can get the newsletter emailed to you, it would cut down on these costs.Jeff

Timetable Special EditionMatt Schramm, EditorWith 2009 being the 25th anniversary of the club, we are planning on a special edition of the newsletter for March. It will contain ONLY club history items. If anyone has any pictures or stories of the last 25 years, please send them to me at NewsAll groups report things are progressing smoothly on all the layouts.

License Plate FramesThese fit over an automobile license plate. Available in Black or Chrome. The top has “Delmar,Delaware” engraved on it, the bottom has“Delmarva Model Railroad Club”. Price for members $15.00, non-members $20.00. Custom orders are accepted.Club ShirtsBill Shehan is accepting orders for club shirts. Two styles are available and come in sizes Small to 4XL.Styles, Sizes and Prices are:Golf Shirts (Short Sleeve Only)S, M, L, XL $22.752XL $26.253XL $28.754XL $31.25Broad Cloth (Long and Short Sleeve)S, M, L, XL $25.002XL $27.503XL $30.004XL $32.50

News From the Rails

Ethanol Terminal Opens on Union Pacific Line

Facility to meet demand as California hikes fuel blend to 10 percent
Ethanol terminal operator U.S. Development Group said its West Colton Rail Terminal at Rialto, Calif., has started handling ethanol railcars from Union Pacific Railroad.
The facility is near gasoline blending terminals that supply California’s San Bernardino and Riverside County-Inland Empire region, plus San Diego and Bakersfield.
USDG Vice President Larry Padfield said the terminal “represents a key addition to the nationwide network of logistics terminals” the company has developed, which include major ethanol hub facilities in Linden, N.J., Baltimore, Dallas and Houston.
West Colton can receive volumes from single railcars to full unit trains, and can offload 15,000 barrels of ethanol a day. USDG said it completed the facility “in time to meet the increase in ethanol demand in California resulting from the January 2010 increase to a 10 percent ethanol blend across the state.”
Future development plans there include putting in a 100-railcar unit train receiving and offloading terminal to be completed by this time next year. The company also said it will eliminate much of its current need for secondary, onsite trucking operations by building a pipeline to a nearby dedicated ethanol storage and gasoline operation.

Fast Trains Lead Amtrak List of Needs

Amtrak has been working hard to lure more business travelers to its trains, with advertisements highlighting its advantages over air travel — roomier seats, power outlets on its Acela trains and fewer annoyances.
And its efforts have borne some fruit: the number of riders on its Northeast corridor trains has been rising.
But faster trains are critical to its future. So while Amtrak got some desperately needed financing from the federal government this year, its forecasts suggest that speedier rail travel in the United States remains a daunting challenge.
For the Northeast corridor alone, Amtrak estimates that it will need almost $700 million annually for the next 15 years to maintain the system and to tackle a backlog of maintenance projects and upgrades. Reducing travel times between New York and Washington to two-and-a-half hours and times between New York and Boston to three hours — goals that were established in the 1970s — will require straighter track, improvements to bridges and tunnels, increased capacity through Manhattan and newer trains, among other investments.
Almost all of Amtrak’s lines fail to make money, with a total loss of $1.1 billion in 2008. Even technology enhancements seem to move at a slow pace: developing a new electronic reservation system is expected to take until 2015.
Still, Amtrak officials are more optimistic now than they have been in a long time. “We’re probably in the best position to move forward to get the things done we want to get done and that the government wants us to get done,” said David Lim, Amtrak’s chief marketing officer. “We have an administration that is supportive of rail.”
One of the biggest changes for Amtrak is that after years of bare-bones annual financing that limited the railroad’s ability to make significant upgrades, Congress approved a five-year authorization in 2008 that allocates the system nearly $2 billion a year.
Although the money still needs to be appropriated every year, Mr. Lim said, “the fact that there’s a five-year plan makes a tremendous difference. Asking the government for your annual subsidy obviously makes it difficult to plan and execute capital projects.”
In addition, the economic stimulus package approved by Congress early this year provided $1.3 billion to supplement Amtrak’s capital budget and $8 billion in grants for intercity service and high-speed passenger rail. While those amounts will not go far in developing the bullet trains that operate in Europe and Asia and will probably be distributed among projects throughout the country, Amtrak officials say they view the investment as an important policy shift.
There are also signs that passengers are increasingly embracing trains. The number of Amtrak riders has increased steadily since 2001, surpassing 28 million in 2008, though a dip is expected this year because of the recession.
Amtrak estimates it carried 63 percent of travelers flying or taking the train between New York and Washington in 2008 — an increase from 37 percent before the Acela service began in 2000. Amtrak’s market share between New York and Boston was 49 percent last year, compared with 20 percent before Acela.
Amtrak hopes to push those numbers even higher, Mr. Lim said. The railroad plans to introduce free Wi-Fi service on all Acela trains in the second quarter of 2010, then add Northeast regional trains later in the year.
The ability to work on the train is one of the reasons Brian Silengo says he rides Amtrak for his weekly trips to New York from Washington. He uses a cellular wireless card to get Internet access, but as a sales executive for an interactive marketing agency, he mostly values the Acela trains’ reliability.
“They’re very good at getting you where you need to be on time,” he said.
Although he said he would like to see the trains travel at faster speeds, a more important item on his Amtrak wish list is making the process for ticket changes and refunds easier.
With future improvements to the reservation system, Amtrak plans to allow customers to make ticket changes online, and possibly allow passengers to print boarding passes at home. Mr. Lim said the latter option is more challenging because conductors would have to carry ticket scanners.
Another challenge for Amtrak is to price its fares competitively, yet find a way to improve its financial performance. An analysis by the Pew Charitable Trusts’ project Subsidyscope calculated that 41 of Amtrak’s 44 routes lost money last year. The average loss was $32 a passenger, though the Acela Express line earned $41 a passenger, suggesting that faster trains are crucial to profitability, according to the data.
“The Acela, of course, is the moneymaker,” said Marcus Peacock, project director for Subsidyscope. “And that’s the closest thing we have to high-speed rail right now.”
Amtrak’s Acela fares between New York and Washington range from $133 to $221 one-way, compared with $49 to $139 for the slower Northeast regional train. Advance-purchase airfares for the same route can be $150 roundtrip, an important consideration for travelers.
“Our clients look at the price,” said Dave Kilduff, senior director of ground transportation for Carlson Wagonlit Travel, a travel management company, though he added that service and travel time are important, too, and that many travelers are surprised by their experience with the train.
“Once they try it, they see it’s much more pleasant than they expected,” he said. “The faster they go, the more people will get on them.”
But to achieve those speeds, and turn Amtrak’s blueprints into reality, some industry experts say what is needed is a broader transportation strategy rather than separate approaches to air, highway and rail travel.
“The United States doesn’t really have an integrated transportation plan,” said Robert L. Crandall, the former chairman of the AMR Corporation, the parent of American Airlines. He recently participated in a Transportation Department forum on the aviation industry.
“What is needed is some kind of overall plan, and it has to be done by the government,” he said

BNSF wants monopoly suit heard in federal court

BNSF Railway and state officials are engaged in a legal skirmish over whether a shipping monopoly lawsuit should be heard in federal or state court — a disagreement that could have far-reaching consequences for grain farmers in central Montana's Golden Triangle.
The dispute centers on the 87-mile Geraldine Line near Lewistown. For years, Central Montana Railroad has battled in federal court to force Texas-based BNSF to make payments for the line under a 1984 agreement.
After Montana Attorney General Steve Bullock last month stepped in and tried to move the matter to state District Court in Fergus County, BNSF balked.
BNSF — the country's second-largest railroad — accuses the state of "shopping" for a favorable venue.
A decision over which court has jurisdiction is pending before U.S. Magistrate Judge Keith Strong in Great Falls.
State attorneys say that if BNSF wins, Central Montana could go out of business and farmers in Cascade, Chouteau, Fergus and Judith Basin counties would have to drive long distances to unload their grain.
That would put new pressures on Montana's agriculture industry at a time when high fuel costs and widely fluctuating grain prices already are causing a strain.
In court documents filed Dec. 21, attorneys for the state asked Strong to remand the case to the state court.
But after consistently getting its way in federal court, BNSF is eager to block the move.
BNSF says the state is engaged in a transparent ploy to subvert federal authority. They point out that the grievances filed by the state are largely the same as complaints Central Montana Railroad unsuccessfully pursued in federal court.
"The new lawsuit is merely a tactic by (Central Montana) and the state to elude the federal forum and undermine rulings by this (federal) court," BNSF attorney Matthew Hayhurst wrote.
BNSF's payments to Central Montana under the 1984 agreement at one point were worth about $1 million annually. After an arbitration panel ruled that BNSF could back out of the agreement, the payments ceased this fall.
The state also claims BNSF has unfairly subsidized construction of a rail loop in Moccasin to give preference to a private unloading facility that competed with Central Montana.
In recent months, traffic along the Geraldine Line has dropped sharply — from about 1,150 carloads a year on average to just over 500 in 2009.

Wednesday, December 2, 2009

December news letter

Delmarva Timetable
News of the Delmarva Model Railroad Club
December 2009
Matt Schramm, Editor
Next Meeting
The next meeting will be held on Wednesday,December 2, 2009 in the Club meeting room.

Mail vs E-mail
With the cost of postage going up 2 cents on the 11th of May, I would like to make a plea to all the
snail-mailers that if you can get an e-mail account, it would definitely help the club. Right now it costs
roughly $250.00 per year for postage, ink, and paper to get the snail mail editions out. If any of you can
get the newsletter emailed to you, it would cut down on these costs.

Timetable Special Edition
Jeff Shockley, Editor
With 2009 being the 25th anniversary of the club, we are planning on a special edition of the newsletter
for November. It will contain ONLY club history items. If anyone has any pictures or stories of the last
25 years, please send them to me at

Layout News
All groups report things are progressing smoothly on all the layouts.

License Plate Frames
These fit over an automobile license plate. Available in Black or Chrome. The top has “Delmar,
Delaware” engraved on it, the bottom has
“Delmarva Model Railroad Club”. Price for members $15.00, non-members $20.00. Custom orders are

Club Shirts
Bill Shehan is accepting orders for club shirts. Two styles are available and come in sizes Small to
Styles, Sizes and Prices are:
Golf Shirts (Short Sleeve Only)
S, M, L, XL $22.75
2XL $26.25
3XL $28.75
4XL $31.25
Broad Cloth (Long and Short Sleeve)
S, M, L, XL $25.00
2XL $27.50
3XL $30.00
4XL $32.50

Is Buffett's BNSF takeover a good move at a good price?

Early in November, the world's second-richest man made a deal to buy America's largest railway,
swallow it whole and take it off the market.
At a total value of $34-billion (U.S.) it is Warren Buffett's biggest deal ever. If shareholders finalize the
deal as expected early in 2010, it can be argued that his purchase of Burlington Northern Santa Fe
(BNI-N98.530.070.07%) (BNSF), based in Fort Worth, Texas, will do good things for the U.S.
economy and cement Mr. Buffett's legacy as the Sage of Omaha. When you're pushing 80, that's a good
But what does it mean to ordinary investors? There are those who are argue that the deal isn't very good
for shareholders of Mr. Buffett's company, Berkshire Hathaway (BRK.B-N3,336.78-15.52-0.46%) , or
those of BNSF, even though Mr. Buffett has offered the equivalent of $100 a share in cash and stock.
Hard on the heels of the deal's Nov. 3 announcement, three lawsuits were filed alleging that BNSF
management shortchanged shareholders, rushing into a deal for their own benefit and failing to get the
highest price for the railroad's shares.
You could argue that the litigants are all wet, as the deal for the 77 per cent of the stock Berkshire
Hathaway does not already own represents a 32-per-cent premium over BNSF's closing price on Nov.
2, the day before the deal was announced. At one point last March, the stock had dipped to $51.20. Too
bad for his own shareholders, Mr. Buffett wasn't able to make the deal then. Still BNSF stock had
climbed to $113 on its own in May, 2008, before the recession took the steam out of its locomotives, so
maybe Mr. Buffett hasn't lost all is marbles.
Even Mr. Buffett concedes that BNSF doesn't come cheap, unlike some of his other legendary deals.
And he's doing some things in this deal that he doesn't normally do – like issuing stock. He's offering a
50-to-one split on Berkshire Hathaway's B shares, which means that Berkshire's B shares, which are
currently trading at about $3,354 will trade around $67 after the deal is approved.
At least you won't have to mortgage your house to buy one, which will still be the case with Berkshire's
A shares, currently trading at about $100,600 – the most expensive stock on the market.
You could dismiss the litigants as greedy, as did BNSF spokesman John Ambler, who told the Fort
Worth Star-Telegram, “Unfortunately, it has become almost a universal occurrence for certain law firms
to file lawsuits of this type around any corporate M&A activity.”
Yet a Scotia Capital Markets report indicates that Mr. Buffett paid too much for his railroad. A report
issued at the end of November indicates that profit estimates for the Big Six North American railroads
are inflated and may have to be adjusted downward. Since the deal was announced shares of the other
five railways are up 12 per cent on average, and that includes Canadian National Railway Co. (CNRT56.15-
0.15-0.27%) , up five per cent, and Canadian Pacific Railway Ltd. (CP-T52.300.400.77%) , up
more than eight per cent.
“In the short term, we would not be surprised to see the group retrace the gains made post the
announcement of the bid,” writes Scotia analyst Cherilyn Radbourne.
Not a ringing endorsement of railroads.
Even Alice Schroeder, former Wall Street analyst, Bloomberg columnist and Buffett biographer, thinks
Mr. Buffett paid too much for BNSF. “I'm not surprised he bought it,” she told Bloomberg on the
Economy. “I was certainly surprised at the price … he's getting a five-per-cent return on his initial
investment which is considerably less than half of what he likes, and he's issuing stock.”
So when that stock becomes available to trade, will it indeed be overpriced at one-fiftieth of its current
Despite what Ms. Schroeder thinks, UBS analysts point out that while Mr. Buffett paid within the
acceptable range of earnings multiples of 8 to 9, the multiple was based on recession-depressed
earnings. If his offer was based on that May, 2008, price of $113, for example, it would fall below 8
times earnings, which is why some shareholders are going to court.
Still, when your railroad is coming out a deep hole, $100 a share sounds pretty good, and it's likely the
deal will go through as scheduled early in the new year.
Which leaves a lot of people still asking the fundamental question: A railroad? There was, a time, not
so long ago, when Buffett and Co. were leery of investing in railroads because they were capitalintensive,
mired in union strife and make-work rules, but the Sage has changed his tune in recent years.
Rail is more environmentally sound than trucking. One freight train can move a ton of cargo 436 miles
on a single gallon of diesel and can carry the load of 280 trucks.
According to Sharon Dunn, the executive director of the Georgia Railroad Association, if one per cent
of freight currently moved by trucks went on rail instead, the reduction in greenhouse gases would be
1.2 million tons and the fuel savings would be 110 million gallons.
As the price of fuel increases, rail becomes an increasingly attractive alternative – and that capital
intensive disadvantage becomes an advantage: no one is going to start a railroad. In defending the deal,
Mr. Buffett told CNBC: “I basically believe this country will prosper and you'll have more people
moving more goods 10 and 20 and 30 years from now and the rails should benefit.”
Mr. Buffett has famously called the deal “an all-in wager on the economic future of the United States.”
And, he added: “I love those bets.”
Ok, it's not high-tech or bio-tech or Google. But it's certainly one of the most intriguing deals of the
21st century, and it puts the spotlight on railroads. Many analysts believe that Canadian Pacific, which
has none of the foreign ownership restrictions of the larger Canadian National, could be the next
railroad on the block. So you may not have to buy into BNSF at a premium – CP is up in the wake of
the BNSF deal, but nowhere near the 30-per-cent range – to get in on the next big thing. All aboard!

Santa Is At Railroad Museum Saturdays In December

posted November 30, 2009
Santa will be at the Tennessee Valley Railroad Museum Grand Junction Station on Dec. 5, 12
and 19 from 10 a.m.-4 p.m.
While at the station ride the Missionary Ridge Local for a 55 minute adventure that includes
riding the train, pulled by steam engine #610, over bridges, through the historic Missionary
Ridge Tunnel, and watching the engine turn on an operating turn table. Adult tickets are $14
and child tickets (age 3-12) are $8.A few tickets are still available for the North Pole Limited
- the nighttime train ride to the North Pole. Call 894-8028 or check for
available dates and reservations. Departure times are 5:45 and 7:30 p.m. Tickets are $22
(ages one and up).

GE Transportation pressing for Amtrak deal

Team lobbies for new locomotives
Amtrak hopes to replace 54 of its oldest passenger locomotives, and Lawrence Park-based GE
Transportation wants to bid for the contract.
But at least for now, there's no money in the government's 2010 budget to pay for them.
In what might have once seemed like an unusual collaboration, company officials and its main union
are making a joint plea for Congress to include an appropriation for new locomotives.
"We have the best technology and we know the customer requirements and believe we are best
positioned," Lorenzo Simonelli, the company's chief executive, said in an interview Monday.
"This comes down to funding. Funding for Amtrak for the purchase of diesel electric locomotives isn't
currently planned for in the 2010 appropriation."
Jim Pifer, president of Local 506 of the United Electrical Radio and Machine Workers of America, who
joined Simonelli in the interview, said union and management share the same goal.
"We have been trying to work together," Pifer said. "This is important for the community. As GE goes,
the community goes. We are all together on this."
The federal government's $787 billion stimulus bill did include billions of dollars for rail infrastructure
and high-speed rail.
What it didn't include is money to buy higher-speed locomotives that could bridge the gap between
existing passenger service and the arrival of true high-speed rail.
GE Transportation recently signed an agreement with the Chinese Rail Ministry to jointly pursue
opportunities in true high-speed rail, in which locomotives are capable of topping 200 mph.
But the company is ready today to build machines that will run at 124 mph, and both Simonelli and
Pifer are asking employees and members of the community to press lawmakers for Amtrak funding.
His plea comes just days after GE Transportation collected company IDs from the last of about 1,480
employees who lost their jobs as part of a massive reduction at the local plant. The number includes
about 550 who agreed to retire early.
Winning a contract to build 50 or so Amtrak locomotives wouldn't bring workers back, but it would
help keep employees on the job, Simonelli said.
Pifer said he's hoping ultimately that more sales will mean more employees.
"Hopefully, this is just the first of orders to come," he said. "I have a personal commitment to people
who got laid off. My job is to get as many people back as quickly as we can."
Both Simonelli and Pifer said members of Congress have been supportive.
In a statement from her press secretary, U.S. Rep. Kathy Dahlkemper, of Erie, D-3rd Dist., said she's
committed to securing funding that could produce local jobs and is advocating for passenger-rail
Along with Dahlkemper, Pennsylvania's U.S. senators, Democrats Arlen Specter and Bob Casey, sent a
letter in September to Amtrak's chairman, calling for the replacement of outdated locomotives.
In an Oct. 1 letter to the Senate subcommittee on transportation, Specter and Casey offered their
support to provide the funding.
What would be an order for 54 passenger locomotives mean to Erie County's largest employer?
Simonelli didn't offer a monetary estimate, but he did say the contract would be worth more than a
recent agreement to sell 300 locomotive kits to the Chinese.
Funding for Amtrak doesn't automatically mean a contract for GE Transportation, but it would give the
company a chance.
"It's a competitive bidding process, but I think we are the best-equipped," Simonelli said