Tracking the infrastructure message; RailTrends to present Tea Leaves 2012 webcast — by Pat Foran

— by Pat Foran, Editor

Tracking the Infrastructure Message

We call the April iteration of Progressive Railroading our "Annual Infrastructure Issue," and we've been immersed in all things track the past month or so. On March 28, we presented our Maintenance of Way Virtual Conference & Expo; the event comprised five webcasts, chats and an expo featuring 16 exhibitors (check out the archive). We also recently released Maintenance of Way Spending Report 2012, which provides program breakdowns from 83 freight and passenger railroads. And then there's this issue, which features our "Infrastructure Challenges 2012" coverage. There's a whole lot of infrastructure planning and spending going on, and from where we sit, railroads, contractors and suppliers are meeting their near-term challenges head on.

Longer term, the challenge is a bit murkier: convincing lawmakers that infrastructure investment isn't discretionary, a luxury or an earmark. That it's essential to economic growth and global competitiveness.

The struggle was evident at this year's Railroad Day on Capitol Hill, during which more than 400 railroaders on March 8 observed the painfully partisan surface transportation reauthorization process. It also was an undercurrent during our MOW virtual expo's webcasts and chats, as presenters and attendees wondered what it'll take to make infrastructure a priority in D.C. Meanwhile, the folks at credit risk and ratings firm Standard & Poor's are wondering about the consequences of not making it a priority.

In an April 2 press release announcing the availability of a report titled "Increasingly Unpredictable Federal Funding Could Stall U.S. Transportation Infrastructure Projects," S&P officials noted that even though "transportation infrastructure is the backbone of the U.S. economy," federal funding for it is "discretionary." With Congress focusing on budget deficit reduction, future project funding may be "lower and erratic," which can result in a "domino effect of severe consequences, to the economy and to public safety," S&P believes.

Railroaders know how severe the consequences are, and they continue to do what they can to deliver the rail message. If what I heard at Railroad Day is any indication (see "Climbing the Hill at Railroad Day"), they're delivering it. Lawmakers do seem to get that the growth industry that is rail needs to be part of this country's strategic planning mix. Getting it, of course, isn't good enough.

Regardless of what happens on the Hill in the months ahead, the rail realm's commitment to delivering a clear message is a good thing. Garnering support, even if that support doesn't net an immediately tangible result, is better than the alternative, as unsatisfying a statement as that may be. Long-term thinking may be in short supply on the Hill and in any number of places in SoundBite U.S.A., but rail's going to be part of the big-picture plan, however slowly it unfolds. And railroaders know it. In the meantime, they'll tend the infrastructure garden and continue to climb that Hill, working on their articulation skills and making their voices heard. It's their way of cutting through the murkiness.

RailTrends® to present 'Tea Leaves 2012' webcast

At 11 a.m. (EDT) on May 1, RailTrends®, Progressive Railroading's annual rail finance conference, will present "Tea Leaves 2012: What the Class Is' First-Quarter Earnings Mean to Rail, Transportation and More."

I'll be moderating this interactive panel, which will feature two leading transportation industry analysts: Tony Hatch, president of ABH Consulting, and Donald Broughton, senior research analyst and managing director of Avondale Partners L.L.C.

A Progressive Railroading columnist and RailTrends program consultant, Hatch has been a senior transportation industry analyst on Wall Street for more than 20 years. As an independent consultant, he's worked with a range of railroads, including CSX Transportation, Union Pacific Railroad, BNSF Railway Co., Kansas City Southern and CN. For Avondale, Broughton covers industrials and transportation. Prior to joining Avondale, he served as senior research analyst at A.G. Edwards, where he covered trucking companies, air freight entities, railroads and freight forwarders.

At "Tea Leaves 2012," Messrs. Hatch and Broughton will provide their respective takes on the Class Is' first-quarter performance. They'll also explore broader transportation themes. And they will answer your questions.

The cost to attend/participate is $199. To register, go online: http://bit.ly/HDorvw.