RailTrends 2012 preview by Tony Hatch

— by Tony Hatch

Fall means back to school, the start of football and baseball pennant races. It also means it's time to make plans to come to New York City Nov. 1-2 for RailTrends® 2012 — possibly our best but certainly our most eclectic event to date. While most equity conferences feature the standard CFO/investor relations parade with an update on recent events, RailTrends 2012 is future focused and therefore changes the mix to provide, we hope, a deeper insight.

On the D.C. front, we have Dan Elliott, chairman of the Surface Transportation Board, which is charged with big regulatory issues these days as legislative efforts recede.

From the Federal Railroad Administration, Deputy Administrator Karen Hedlund will join us. Deborah Hersman, chairman of the National Transportation Safety Board, will be there, as well.

Shippers will be represented by National Industrial Transportation League President and CEO Bruce Carlton; and the rail-car segment by Railway Supply Institute President Tom Simpson and consultant Toby Kolstad.

Setting The Stage

Our annual analysts' panel (featuring yours truly and my friend Donald Broughton) will give a Street perspective on the industry and cover competing modes, our views of capex vs. ROI, etc. We hope to set the stage for the regulatory and external framework for the rail industry's truly dynamic stories: energy, intermodal, and the passenger and the short-line segments. Political prognosticator Jamal Simmons will talk about the outlook for Election Day 2012.

We also will delve into the shale opportunity, focused these days on the Bakken; Canadian Pacific VP Tracy Robinson will discuss North Dakota's second-leading originator. Also on hand will be Watco Cos. L.L.C. Chairman and CEO Rick Webb and Dakota Plains Holdings Inc. VP of Operations Robert Henry. Shale volumes will be a big part of the potential growth in the presentations by the chief marketing officers of CN (Jean-Jacques Ruest) and Kansas City Southern (Pat Ottensmeyer). The two also will talk intermodal/cross NAFTA border opportunities. Rounding out the intermodal focus will be separate presentations with a Florida angle from CSX Corp. VP of Intermodal Bill Clement and Fortress-owned Florida East Coast Railway (FEC) President and CEO Jim Hertwig.

Back to short lines: Not only do we have Richard Timmons of the American Short Line and Regional Railroad Association, and Chuck Baker of D.C. lobbying firm Chambers, Conlon and Hartwell L.L.C. (wearing his National Railroad Construction & Maintenance Association hat), but we have a "ripped from the headlines" panel led by Jack Hellmann, CEO of Genesee & Wyoming Inc. (GWI), which is wrapping up its deal to buy RailAmerica from Fortress and become a 108-carrier short-line holding company behemoth. Joining Jack will be the aforementioned Rick Webb of Watco, one of the industry's most dynamic and entrepreneurial companies.

The Growth Story

As the rails seek growth, and as governments look to them to help solve infrastructural and social problems (tax, carbon, congestion, safety, etc.), passenger rail has re-entered the national discussion. RailTrends 2012 examines this from a variety of angles, including a presentation by Amtrak President and CEO Joe Boardman.

Also joining us is Husein Cumber, who is heading FEC/Fortress' efforts to develop All Aboard Florida, a privately financed passenger operation on the old Flagler lines running down the eastern coast. If completed, it would be unique in modern railroading history.

Completing the investigation of the passenger/freight dynamic will be Chris Aadnesen, president and CEO of the Alaska Railroad Corp., which already is a hybrid freight/passenger carrier running in some of the world's roughest conditions.

Finally, we offer a rare U.S. opportunity to hear from Queensland National Railway out of Brisbane, Australia, which was privatized within the past two years and is ahead of revenue and ROI projections despite the flooding hit to its export coal and ore projections. Queensland has an aggressive target to become a benchmark with the Class Is.

Recurring issues and developing ones — we think we have them covered. Suggestions are always welcome. Talk to me at RailTrends.

Tony Hatch is an independent transportation analyst and consultant, and a program consultant for Progressive Railroading's RailTrends® conference. Email him at abh18@mindspring.com.