Four Akron Railroad Club members watch CSX auto rack train Q276 pass Warwick Park in Clinton during the annual picnic.
The group was train watching next to the tracks before the picnic got underway.
The group is (from left) Tom Reder, Dave Shepherd, Don Woods and Todd Dillon.
Genesee & Wyoming reported that second quarter operating revenue rose 10 percent to $595 million from $540.4 million and operating income increased 3.4 percent to $103.1 million compared with the same quarter a year ago.
Diluted earnings per share fell 1.4 percent to 0.73 cents per share for the quarter compared with last year’s EPS in the same period.
Adjusted diluted EPS in the second quarter of this year rose 17.5 percent to 94 cents compared with a year ago.
G&W repurchased 1.9 million shares of its stock for $134.9 million during this year’s second quarter.
The diluted EPS of 73 cents was “generally consistent” with the second quarter of 2017, primarily because of previously announced restructuring charges related to the company’s U.K. operations, said Chairman, President and Chief Executive Officer Jack Hellmann.
He said the diluted EPS of 94 cents in the quarter were at the “high end of our outlook as business conditions continued to improve in each of our three geographies led by North America.”
“Our same railroad carloads increased 8 percent in North America with particular strength in coal, steel and minerals and stone traffic,” Hellmann said. “While our operating leverage in North America during the quarter was adversely impacted by several variables including the mix of business, the lag in fuel surcharge recovery, and legal fees associated with an arbitration proceeding, we expect to see our customarily strong operating leverage for the remainder of 2018 based on our current volume outlook.”
G&W expects growth in customer demand for rail shipments across most commodity groups — particularly in North America — to continue for the rest of the year.
“In addition, we have refinanced our senior credit facility with improved terms through 2023, we have more than $600 million of capacity under our revolving credit facility, and we continue to evaluate investment opportunities in multiple markets including the opportunistic purchase of our own shares,” Hellmann said.
An Amendment introduced by two Ohio U.S. Senators would direct Amtrak to restore a ticket agent in Cincinnati.
The amendment to the transportation appropriations bill would require Amtrak to staff stations that averaged 25 passengers a day over the last five years
Introduced on July 26 by Sen. Sherrod Brown and Sen. Rob Portman, the measure would also affect the following stations that lost their ticket agents earlier this year: Tuscaloosa, Alabama; Ottumwa, Iowa; Topeka, Kansas; Hammond, Louisiana; Meridian, Mississippi; Havre, Montana; Shelby, Montona; Lamy, New Mexico; Marshall, Texas; and Charleston, West Virginia.
The amendment to the Transportation, Housing and Urban Development appropriations bill is under consideration.
Cincinnati is served by Amtrak’s tri-weekly Chicago-Washington Cardinal.
An Avon-based company has reached a distribution agreement to provide AOC-engineered linings for the railroad industry.
The contract between Advanced Polymer Coatings and Strathmore Products of Houston was described in a news release as “a significant opportunity to combine the strengths of two companies to bring new custom linings solutions to the rail industry.”
APC will use its ChemLINE® coatings technology to formulate and produce specialty rail linings that will be private-labeled to Strathmore, and sold within the Strathmore family of coatings.
Strathmore provided coating products for tank and hopper car applications.
“Now with APC’s technologies, we will be adding new linings to our product offering that deliver an ultra-high level of performance against corrosion, and be able to handle a wide range of chemicals including Sulfuric Acid, Acetic Acid, 37 percent Hydrochloric Acid, Methylene Chloride, 50 percent Sodium Hydroxide and others,” said Strathmore Director of Rail Sales and Southeast Industrial Sales Mike Woo.
A nominee for a seat on the Amtrak board of directors was described as a lifelong “train freak” during a hearing before the Senate Commerce Committee.
The label was placed on Rick A. Dearborn by Sen. Roger Wicker, R-Mississippi, who presided over most of the two-hour hearing.
During the hearing, Dearborn said Amtrak needs to make its long-distance trains more attractive but did not say that he supports government funding of them.
“Amtrak trains should be on time, clean, competitive, and a good option for travelers,” Dearborn said. “Long distance service is a critical part of the national passenger rail system. I am committed to it.”
“I get the impression that Amtrak is being reduced, not built, because it’s requiring taxpayer dollars,” U.S. Sen. Jon Tester, D-Montana, told Dearborn. “Do you think taxpayer dollars are necessary to keep Amtrak going?”
“I can’t predict whether or not Amtrak could operate without financial assistance,” Dearborn said. “I would hope that if we focus on creating a good product, then revenues will rise and the dependency on federal dollars would be less.”
“If you had a choice between lowering operating losses and shutting down a long-distance line, what would you choose?” asked U.S. Sen. Catherine Cortez Masto, D-Nevada.
“I hope I’m never faced with that decision,” Dearborn replied.
Dearborn also zeroed in on safety, saying it must be the passenger carrier’s highest priority.
Dearborn expressed optimism that Amtrak will meet the Dec. 31 deadline set by federal law to install positive train control.
In his opening statement Dearborn said he has a collection of O Scale models that includes 75 locomotives and 300 pieces of rolling stock.
He has worked for six senators since the mid-1970s, including 12 years as chief of staff for former Sen. Jeff Sessions, R-Alabama
Dearborn was executive director of President Donald Trump’s transition team and White House deputy chief of staff until he resigned in March.
Also speaking to the committee was Martin J. Oberman, former chairman of Chicago’s Metra rail system, who has been nominated for a seat on the U.S. Surface Transportation Board.
He said he was studying issues facing the STB such as the conflict between carriers and shippers over “captive switching,” and the board’s work on streamlining rate disputes.
“My four years at Metra required my total immersion and continuous education in the railroad industry,” Oberman said. “I quickly learned that all aspects of our national rail system are fundamentally interconnected and the rail system is central to the national economy.”
Oberman pledged to take a “fresh look” at those and other issues. “Honoring precedent and not changing systems that aren’t broken are important values,” he said. “It also critical to be willing to question practices if they appear to be archaic and ineffective in meeting the changing needs of consumers and businesses, or keeping pace with technological changes in the global economy.”
Oberman said he favors negotiation over litigation as a means to resolve issues within the railroad industry.
“As a trial lawyer for 49 years, I know litigation is the worst way to settle a dispute,” Oberman said.
A unit of the Pennsylvania Northeast Railroad Authority has reported handling a 13 percent increase in carloads for the first six months of 2018.
The Delaware-Lackawanna Railroad hauled 4,839 carloads among Carbondale, Scranton, the Pocono Mountains and the Delaware Water Gap in Lackawanna and Monroe counties.
PNRRA President Larry Malski said the rail system handled a record 8,572 cars last year.
The 1,068 carloads handled by the DL during this past June is a monthly record since the Authority was formed in 1982 to acquire and save the regional rail lines that were being abandoned and liquidated.
Malski said the authority is starting the process of relaying some of the double track and yard tracks that were removed in the 1980s, funded in part by a grant of $980,000 from the Pennsylvania Department of Transportation’s Bureau of Rail Freight.
The tracks will allow the DLRR to add expanded capacity needed to handle the increasing carloads moving over the regional rail system. This includes service to two new industries, Scranton Transload in Scranton and Northwoods Paper in Stroud Township.
Chef Martè, a.k.a. Marty Surdyk, places the first burger on the grill at the Akron Railroad Club’s 2018 picnic.
It was nearly a record-setting day for the Akron Railroad Club’s annual July picnic on Sunday and that was a good thing and a bad thing.
It was a good thing because the 10 trains we saw kept us from tying a dubious record of least trains seen during an ARRC picnic at Warwick Park in Clinton.
It was a bad thing because it was just one over the record for the lowest train count.
The record for least number of trains seen at Warwick Park during a picnic is nine, posted several years ago on what Bulletin editor Marty Surdyk described as “just one of those days.”
It also was a hot and humid day, Surdyk recalled.
The train count began at 8:45 a.m. when ARRC President Craig Sanders arrived and ended about 8:40 p.m. when he and Surdyk departed for home.
The first train, a westbound auto rack, was logged at 9:08 a.m. and the last one, an eastbound stack train, passing through at 7:52 p.m.
Between those were numerous long lulls, one of which lasted two hours and 22 minutes.
Auto rack traffic dominated the action with five of the 10 trains being predominantly auto racks and one of the two manifest freights that passed through having a cut of auto racks in its consist.
There were two purely intermodal trains, the Q137 and the Q016, but trains Q276, Q292 and Q216 all had blocks of stacked containers.
The pure auto rack trains were the Q299 and Q277. We also spotted manifest freights Q348 and Q369, both of which passed through within 22 minutes of each other.
The detector at Easton to the west counted 690 axles on the Q348. The crew of that train told the IO dispatcher that it would be dropping off its first 49 cars of stone at Ohio Junction and taking the rest of the train to New Castle, Pennsylvania.
Breaking the monotony of stacks and racks was the K182 coke train.
All of the trains featured CSX motive power with the lone except being a Norfolk Southern unit trailing on the Q137.
There have been reports of Southern Belles of Kansas City Southern making regular appearances on New Castle Subdivision trains, most often on the Q292. But there were no Belles for us today.
The local based at Warwick didn’t operate and neither did R.J. Corman. It was from a railroad perspective a rather quiet Sunday.
As for the picnic itself, approximately 30 ARRC members and guests munched on hamburgers and hot dogs along with chips, cookies, pie, brownies, deviled eggs, baked beans and some raw vegetables.
There were a lot of stories told and past good times shared beneath the pavilion of the park.
As always Chef Martè manned the grill and arranged for the burgers, buns, condiments and drinks. Most members had departed by 4 p.m. as things wound down.
The weather was partly sunny, but pleasant. Rain was reported in the Akron area and we saw some dark clouds, but it remained dry in Clinton.
Alethea Rantanes checks out the snacks and desserts during the ARRC picnic on Sunday.
From left to right Bob Farkas, Denny Romain and Bill Kubas sit and wait for the burgers and hot dogs to be grilled during the ARRC picnic, held at Warwick Park.
Tom Ward fills his plate at the buffet tables as Rick Houk (back to camera) dresses his burger.
Todd Dillon (seated) and Paul Woodring review images on Todd’s smart phone during the ARRC picnic.
The engineer of the Q016 gives us a wave as his train passes Warwick Park during the 2018 ARRC picnic. It would be the last train of the day that any ARRC member saw on the day in Clinton.
Two months ago I presented a report about former Grand Trunk Western 2-8-2 No. 4070, which now lies in a state of disassembly at the former Baltimore & Ohio roundhouse in Cleveland.
The light Mikado is owned by the Midwest Railway Preservation Society and is best known for having pulled trains between 1975 and 1990 on the Cuyahoga Valley Line, now known as the Cuyahoga Valley Scenic Railroad.
The engine broke down in September 1990 and hasn’t operated since.
I saw the 4070 at the roundhouse earlier this month while attending a meeting there of the Forest City Division of the Railroad Enthusiasts.
The body of the 4070 had been moved onto the turntable and the tender had been moved into a roundhouse stall.
A MRPS member said restoration work had recently resumed with replacing staybolts.
That is a start, but the 4070 has a long way to go before it can be fired up again, let alone run on the road.
Members of the Akron Railroad Club who attend tonight’s meeting will see the 4070 in better days during Bob Todten’s slide program.
He’ll be showing the 4070 back when it pulled excursion trains in Chicago, when it worked out of Conneaut Lake Park in Pennsylvania and, of course, when it ran on the Cuyahoga Valley Line.
Despite setting performance records in the second quarter, Norfolk Southern CEO James Squires found himself having to defend his railroad after some Wall Street analysts wondered why NS has not closed a widening operating ratio gap with CSX.
James Squires
The analysts asked why NS isn’t moving as fast as CSX in cutting costs and boosting profitability.
Squires expressed optimism that NS would meet its 2020 sub-65 operating ratio goal ahead of schedule, although he would not say when that would occur.
NS set a record 64.6 percent operating ratio during the quarter, but it was 6 points higher than the CSX operating ratio of 58.6 percent, also a record.
The NS operating ratio was last among publicly traded North American Class 1 railroads.
In response to question by an analysts as to why NS has a different return profile than CSX, Squires said NS recognizes that boosting profitability is important, and consistent improvement in the operating ratio is part of its plan that balances growth and productivity gains.
“We’re going to continue to push on operating ratio,” Squires said. “When we get to the current goal of sub-65 we certainly won’t stop there.”
When pressed if NS has more of a growth focus than CSX, Squires responded: “I will say this. This is a terrific environment in which to grow. And we have been executing on growth by sending that growth to the bottom line.”
Squires pointed to the railroad’s improvements in operating income and noted that the railroad business is cyclical. “You better jump on that growth opportunity when you have it,” Squires said.
At the same time, NS saw an increase in traffic of 6 percent during the second quarter of 2018 compared with the 2 percent gain posted by CSX, which was the lowest among the publicly traded Class 1 railroads.
In response to another analyst, Squires said he watches the performances of other railroads and adopts their best practices.
He raised doubt about whether NS should do what CSX did last year in making disruptive operational changes to quickly reduce structural costs and then pursue more profitable growth.
In response to another question as to whether NS has a better network than CSX, Squires said he likes the NS network a lot.
“I think we have an outstanding network with a lot of potential for both efficiency and growth. I’ll take our network any day,” he said.
Squires also noted that NS has taken steps to reduce structural costs, including consolidating dispatching in Atlanta by the end of the year, simplifying its local operating plan by collaborating with customers, and rationalizing its yard network.
“A classification network that can provide good local service is one of the keys to growth in the merchandise network,” Squires said.
One analyst wondered if NS has considered hiring operations people with precision scheduled railroading experience as a way to cut the workforce as CSX has done.
By comparison, CSX had 22,942 employees at the end of the second quarter, which was down 11 percent from a year ago, while NS had 26,535, a decrease of 2 percent.
“I’m very, very confident in our operations team and their ability to drive productivity while maintaining a foundation for growth. We’re in great shape with the team,” Squires said, adding that a railroad’s cost structure comes down to people and assets and NS remains focused on both as it looks to balance cost cuts with growth, service, and safety.
Squires didn’t bite when an analyst asked if CSX was enjoying short-term profits at the expense of long-term goals.
“We believe in our plan, and our plan is a balance of efficiency and growth, as I’ve said several times this morning,” Squires said. “That really is the right formula in our view.”
Squires elaborated by saying companies need to make investments for growth and that requires having a certain level of resources available, particularly in times that are conducive to growth.
“So while we are definitely focused on productivity going forward, right now is the time to make sure you have the workforce in place to handle the business so that you can grow when that’s possible. So I think our plan will be the right plan for our shareholders in the future,” Squires said.
CSX is expected to pay $2.2 million in penalties to settle an action stemming from a 2015 derailment and subsequent oil spill.
The railroad would pay $1.2 million to the federal government and $1 million to the State of West Virginia to settle water pollution violations.
In a state-negotiated agreement, CSX will pay $500,000 to a state-administered fund to upgrade a water treatment facility in Fayette County, West Virginia.
The federal agencies involved in the case were the Environmental Protection Agency and the Department of Justice.
The derailment occurred on Feb. 16, 2015, at Mount Carbon, West Virginia, when 27 cars of a CSX train with 109 rail cars carrying crude oil derailed. The train carried 29,000 gallons of Bakken crude and about half of the cars ignited.
Some of the oil flowed into the Kanawha River and Armstrong Creek.
The explosions and fires destroyed an adjacent home and garage. A local state of emergency was declared, nearby water intakes were shut down and area residents were evacuated.
The settlement is subject to a 30-day public comment period and final court approval. CSX officials declined to comment on the settlement.
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