Sierra

Northern Railroad

In August 2003, the S i e r r a R a i l r o a d

Company and the Yolo Short Line Railroad merged to create the Sierra Northern Railway (SERA). Now operating on approximately 105 miles of track in Northern California, right through the heart of a number of California’s prime industrial areas and serving the Port of Sacramento, the railroad serves a wide variety of customers and interchanges with both the BNSF and Union Pacific Railroad. Sierra Northern Railway handles approximately 6,000 carloads per year. Through its sister companies, the railroad also owns and operates 3 tourist railroads throughout California: Sacramento River Train, Skunk Line Railroad and the Sierra Dinner Train. RII has had a long standing relationship with this short line railroad, assisting with its

original merger in 2003. RII Chairman and CEO sits on the Board of this railroad in an advisory capacity, and RII has partnered with the short line on projects from developing a promotional package for all of its business operations to expert witness services. RII recently partnered with SERA on the Tulare County project (see our October 2010 issue). SERA actively seeks additional projects in the Northern California and Nevada areas for expanding its rail operations portfolio. As traffic and interest in rail continue to pick back up, SERA looks for many new opportunities to grow.

Ohio Department of Transportation

The state of Ohio is home to over 7,000 railroad employees and 5,200 miles of rail. Being sandwiched between the Great Lakes

and the Ohio River, Ohio enjoys a large and vibrant industrial base, rich in coal, iron and agricultural production. With 4 Class

I’s and 1 regional railroad operating within the state (not to mention numerous short line railroads), Ohio expects to continue to be

one of the largest and most concentrated industrial zones in the U.S. To position the region for continued economic growth, OH

DOT and neighboring states have initiated a public-private partnership between CSX Transportation and the states of Ohio, West

Virginia, Maryland, Pennsylvania, Washington DC, Virginia and North Carolina to link Mid-Atlantic ports to population centers.

Recently, $98 million has been released from the ARRA funds to kick off construction during the first quarter of 2011 on a key corridor. The

momentum behind this gateway continues with private funding coming in at $400 million of this $842 million project.

The state has also recently released RFP’s for a series of state rail studies covering all aspects of rail transportation, infrastructure, freight movements,

capacity and integrated facilities for every region. RII has joined teams on 3 of these studies: Northeast Ohio Intermodal Facilities; Northwest Ohio

Freight Mobility and Infrastructure; and Central Ohio Freight Trends Study. RII is also currently teaming with Bergmann Associates as the on-call Rail

Consultant for METRO Regional Transportation Authority in Akron. This is a 3 year task order contract which is just getting under way and presently

has one project in progress where RII will be supporting the team in a track inspection capacity later this year.

Additional projects in the state have included improvements at the major airports and river ports to improve multimodal integration. The Ohio State Rail

Commission clearly has a vision of maximizing the advantages its state holds by investing in its rail infrastructure.

Inside this Issue:

Client Spotlight on Sierra

Northern Railroad

Industry Events

Service Highlight on

Maintenance of Way

Planning

DOT Junction on Ohio DOT

Who’s Who In the Industry?

—Todd A. Howell

Safety Corner—Recap of

2010 Incident Numbers

Rail Performance Statistics

I Rails—Crossword

As reported to

the FRA, as of

October 31st,

2010 there

have been 665

railroad

incidents in

the US

compared to

2009’s 592!

See the chart

below for

information on

the numbers

by individual

state.

As rail traffic

continues to

Across

4. Enclosed railroad car, carries general

freight

7. Underground passage

9. Printed booklet containing schedules and/

or special instructions affecting train

movement

Down

1. Person "in charge" of a train and its crew

2. A fossil fuel made of carbon and sulfur

3. America's largest operating model

railroad show under one roof

5. Intersection of two railroad tracks

6. Loud sound a train makes when

approaching a crossing

Maintenance of Way Inspection, Planning & Auditing

One of the areas of rail operations at risk in a tight economy is maintenance of way. As an intensive capital costs of operations, it is an easy category to put of on spending and “defer maintenance.” Unfortunately, this usually means that extra maintenance will need to be spent at some

point to catch up the condition of the rail. A strong maintenance of way plan budgets an annual amount for maintenance that ensures the rail corridor remains in the same condition year after year. This is based on annual traffic and materials/labor costs, and should be adjusted as these variables change. Typically, an annual maintenance of way plan should be renewed every 3-5 years.

Railroad Industries Incorporated (RII) has been assisting its clients since 1983 with all aspects of maintenance of way assessments and planning. RII’s expertise includes conducting track inspections, maintenance planning, traffic analysis and annual budgeting, as well as performing contractor audits,

maintenance of way plan adjustments, working upgrade costing into a maintenance of way budget, and scheduling/prioritizing repairs and maintenance concerns over the course of the 3-5 year plan. RII brings together the expertise of track experts with operations, traffic development and finance to ensure a comprehensive approach to maintenance of way planning. Whether you are a short line railroad, a public or private entity that owns a railroad operated by someone else or any other organization with a vested interest in the sustainability of the rail assets and operations, RII can help ensure they are protected for current and future operations. Please contact is at 775-329-4855.

Last issue’s Topic:

Regulations under TSA for Rail in the works,

There are now new regulations in the works for passenger AND freight rail from the TSA. Is this a positive step toward improving rail safety for all modes under TSA/DHS or does it convolute rail safety by not having it all come through the FRA or at least USDOT?

Comment 1: All of the regulations should go through the FRA. They deal with the railroads all the time and have an understanding of what is feasible and what is not. TSA has never dealt with the railroads before and may not even know that the regulations they are putting out are very similar to ones the FRA already has, yet just different enough to cause issues and confusion.

Comment 2: This is not a positive step for our industry. We should be working with one regulatory agency and have TSA work with FRA for implementing rules and regulations.

Comment 3: TSA should take a more active role in what security the railroads have but they should work with the FRA and make sure the rules are good for both agencies while keeping the FRA in control.—specially since the FRA does most of the things TSA is proposing already.

Comment 4: TSA will need to be conscious of what regulations are doable for the railroads if they get involved. I understand that TSA will be looking for different things than the FRA but things will need to be spelled out specifically so that what falls under who will not be confusing and take more time (or cost more) than is reasonable.

Comment 5: TSA is going to take over a chunk of the Railroad dealings, and especially in the state of California, they are going to become more active. Along with the FRA, the TSA will become more active especially when it comes to terrorism and such.

Comment 6: TSA has already released rules for railroads—most railroads just don’t know it yet and TSA has not yet been able to enforce them. These require security plans, special haz-mat procedures beyond what the FRA requires and special training. Once TSA gets its own people better trained in rail, expect them to start enforcing these new regulations. The public is behind it, so best get used to it.

(Comments are posted on behalf of respondents, and do not represent the position or opinions of RII or its officers, employees or associates. Comments are edited for appropriateness and

selected by the editor. Not all comments

can be posted in the print issue.) This Month’s Topic: STB jurisdiction over specific commodities: For over 30 years, certain commodities have been exempt from STB jurisdiction over rates and complaints. These commodities were exempted because there was assumed

to be sufficient competition for transportation and shippers of these items supported

the exemptions at the time. Times have changes, many of those shippers say they

do want STB jurisdiction now, and the STB is considering removing some exemp-tions.

What do you think? Should any commodities be exempt? Will this

solve problems or cause more? Will this improve railroad competi-

tion or harm railroad service? Send Responses to hah@railroadindustries.com

Todd also is a certified Microsoft Partner in networking and security, maintaining his certifications annually.

Todd A. Howell—Manager of Marketing and Technology

Todd joined RII in 2006, bringing with him 8 years experience in computer information systems & graphics design. This allowed RII to expand its capacity with cutting edge communication systems, higher quality deliverables, logistics software systems and mapping technologies. His in depth understanding of multimedia advertising, marketing and graphics capabilities have contributed not only to RII’s image and capacity, but also offers a new line of services for our clients in marketing materials, image development, multimedia exposure and target marketing. He has spent the last 5 years with RII developing skills in logistics and rate negotiation to match his data systems expertise. This has provided a specialized understanding of rail negotiations, which is unique to any other mode for pricing and contract negotiation.

Some projects of interest include ongoing negotiations for rates for some of our world class chemical and recycling clients, transportation costing for all equipment types and tenders, unit trains analysis and backhauls, volume

shipments, assessing STCC applicability for reducing rates and comparison with other modes, including truck costing, transload location, pricing and contract negotiations.

Upcoming Events 2011—Lots of Activity Coming Up in March! Feb 8th - 10th - High Speed Rail Summit Washington, DC Feb 16th - American Railway Development Association (ARDA) Executive Forum Atlanta, GA Feb 27th - Mar 1st - American Association of Railroad Superintendents (AARS) Winter Conference Jacksonville, FL Mar. 2nd - 3rd - Southwest Association of Rail Shippers (SWARS) Annual Meeting Galveston, TX Mar. 6th - 9th - Rail Equipment Finance Conference La Quinta, CA Mar 9th - 10th - Pacific Northwest Association of Rail Shippers Meeting Portland, OR Mar 15th - 16th - 16th Annual AAR Research Review Pueblo, CO Mar 15th - 17th - North American Rail Mechanical Operations Seminar (NARMO) St. Louis, MO Mar 16th - 18th - American Society of Mechanical Engineers (ASME)/ The American Society of Civil Engineers (ASCE)/ The Institute of Electrical and Electronic Engineers (IEEE) 2011 Joint Rail Conference Pueblo, CO Mar 20th - 23rd - Federal Economic Development Forum Washington DC Mar 28th - 29th - 2011 Washington Freight Transportation Policy Forum Arlington, VA Mar 29th - 31st - Southeast Association of Rail Shippers Meeting Savannah, GA

Industry Events January 2011

Jan. 5th - 8th - National Railroad Construction & Maintenance Association (NRC) Conference Fort Lauderdale, FL Jan 11th - 13th - Midwest Association of Rail Shippers Meeting Oakbrook, IL Jan 27th - 28th - Southwestern Rail Conference in Dallas, TX