Archive for the ‘Railroad News’ Category

CN Net Income Up 20% in 2nd Quarter

July 29, 2017

Canadian National said that its net income rose 20 percent in the second quarter of 2017 due to strong volume growth across most commodity groups.

The company reported net income of CA$1.03 billion or CA$1.36 diluted earnings per share, compared with CA$858 million, or CA$1.10 diluted EPS, during the second quarter of 2016.

Revenue rose 17 percent to CA$3.3 billion, carloadings increased by 14 percent and revenue ton-miles gained 18 percent compared with the same period in 2016.

In a news release, CN attributed its revenue increases to higher volumes across several sectors, including Canadian grain and fertilizers, overseas intermodal traffic, frac sand, coal and petroleum coke exports, crude oil, and finished vehicles.

Another factor was higher fuel surcharge rates, freight rate increases and the positive translation impact of a weaker Canadian dollar.

Compared with 2016, revenue was up 33 percent for metals and minerals, 33 percent for coal, 23 percent for grain and fertilizers, 20 percent for automotive, 17 percent for intermodal, 12 percent for petroleum and chemicals, and 6 percent for forest products.

Operating expenses rose 18 percent to CA$1.8 billion compared with a year ago.

CN posted an operating ratio of 55.1 percent for the quarter, an increase of 0.6 points over the prior-year quarter.

“Once again, CN delivered solid quarterly performance with strong volume growth across most commodity groups, building on the momentum started in the fourth quarter of 2016,” said President and CEO Luc Jobin in a statement. “Our team of railroaders remained focused on balancing operational and service excellence while efficiently adjusting to the growing demand.”

In looking to the second half of 2017, Jobin said the period will present challenges due to a strengthening of the Canadian dollar.

The Montreal-based railroad said its goals for the remainder of 2017 includes an adjusted diluted earnings per share in the range of CA$4.95 to CA$5.10 compared with last year’s adjusted diluted EPS of CA$4.59.

Senate Committee Votes to Fund Amtrak Long-Distance Trains, Save TIGER Funding in FY2018

July 29, 2017

A Senate committee voted this week to provide $1.6 billion in funding for Amtrak and to provide funding for some grant programs that the Trump administration wanted to cut.

The Senate Appropriations Subcommittee on Transportation, Housing and Urban Development said that the funding would assure that Amtrak’s long-distance trains remain in operation during fiscal year 2018, which begins on Oct. 1.

The Amtrak funding was part of a $1.974 billion package for the Federal Railroad Administration and also included $550 million for Transportation Investment Generating Economic Recovery (TIGER) grants.

That contrasts with action by a House committee to end TIGER funding. The Trump administration also sought to end the TIGER program.

In other action, the Senate subcommittee agreed to provide $12 billion for the Federal Transit Administration, marking a $285 million decrease from FY2017 enacted levels.

The bill provides $9.7 billion for transit formula grants consistent with the Fixing America’s Surface Transportation Act and slots $2.1 billion for the FTA’s Capital Investment Grants (also known as New Starts).

That money would fully fund all current Full Funding Grant Agreement transit projects.

“This bipartisan bill is the product of considerable negotiation and compromise, and makes the necessary investments in our nation’s infrastructure, helps to meet the housing needs of the most vulnerable among us, and provides funding for economic development projects that create jobs in our communities,” said U.S. Sen. Susan Collins (R-Maine), who chairs the subcommittee.

STB to Monitor CSX in Wake of Shipper Complaints

July 28, 2017

The U.S. Surface Transportation Board has notified CSX that it will closely monitor the railroad’s performance.

In a letter to CSX head E. Hunter Harrison, the STB said it would conduct weekly service calls with senior railroad executives.

The STB said some shippers have lodged informal complaints with the agency about the deterioration of service between April and June.

It was during that period that CSX began implementing the precision scheduled railroading operating philosophy that Harrison has long espoused.

“In particular, shippers have complained that transit times have increased significantly and/or become unpredictable; loaded and empty rail cars sit for days at yards; switching operations have become inconsistent and unreliable; car routings have become circuitous and inefficient; and CSX customer service personnel have been unable to provide meaningful assistance,” the STB wrote.

Congestion has hindered CSX operations at its St. Louis and New Orleans terminals and the railroad’s performance metrics indicate that trains are moving more slowly and cars are spending more time in yards, while the number of cars online has increased.

“We understand that these disruptions have forced a number of rail shippers and their customers to curtail production, temporarily halt operations, and/or utilize other transportation options,” the STB letter said.

The letter went onto cite CSX for not communicating well with it customers, saying that many shippers have been caught off guard by the service changes and didn’t have the lead time required to adjust their supply chains.

Earlier this week, STB officials and senior CSX officials had a meeting to discuss the railroad’s operations. CSX spokesman Rob Doolittle said the railroad will provide the information the STB has requested.

NS Net Profit Up 23% in 2nd Quarter

July 27, 2017

Norfolk Southern said this week that its second quarter 2017 net profit was up 23 percent and revenue had risen by 7 percent to $2.6 billion.

The railroad said traffic and revenue growth combined with productivity gains enabled it to achieve a record operating ratio of 66.3 percent. That compared with 68.6 percent during the same period in 2016.

Citing gains in coal and intermodal traffic, NS said it posted a 6 percent increase in volume. Income from operations was up 15 percent, to $888 million.

Intermodal traffic increased by 6 percent overall during the quarter with domestic business up 6 percent due to highway conversions and new service offerings.

International intermodal business rose 5 percent due partly to a 13 percent increase in volume from East Coast ports.

The company said it continues to see international volume shift from West Coast ports to the East Coast as a result of the expanded Panama Canal.

Coal traffic was up 27 percent with utility and export metallurgical coal both posting increases in traffic. Some of the traffic came from a 23 percent rise due to lower utility stockpiles and higher natural gas prices.

Export coal volume skyrocketed by 78 percent due to constrained Australian supply and increased steel making in China.

Merchandise traffic was flat with metals and construction the only categories seeing increases. There were declines in chemicals, automotive, agriculture, paper, clay and forest traffic.

NS reported earnings per share of $1.71, which beat the forecast of Wall Street analysts of $1.65 per share, according to Thomson Reuters I/B/E/S.

“Norfolk Southern’s strong financial results and all-time record operating ratio reflect the power of our team, successful execution of our dynamic plan, and focus on operating even more efficiently while providing high quality service to customers,” CEO Jim Squires during an earnings call.

NS Chief Marketing Officer Alan Shaw said the railroad has seen some traffic come its way from CSX, but it is a small amount. Trucks remain the chief competitor of NS, Shaw said.

Some key operating metrics suffered during the quarter due in part to flooding near the Cincinnati terminal and on its line linking Louisville, Kentucky.  There was also flooding near Kansas City and operating issues related to fires in northern Florida.

Average train speed decreased, while terminal dwell grew. “We’ve turned the corner on that,” Squires said. Train speed has increased 10 percent and terminal dwell bounced back to previous levels.

NS expects to achieve $100 million in productivity gains in 2017. It has retired 100 locomotives and cut the work force by 10 percent compared with 2015.

Chief Operating Officer Mike Wheeler said NS set quarterly marks for locomotive productivity, fuel efficiency, and train length,

In looking toward the rest of 2017, NS management expects continued growth in intermodal and coal traffic while merchandise traffic is likely to decline slightly due in part to slowing auto production and assembly plant downtime.
NS plans to increase its share buyback program by 25 percent to $1 billion for the year.

CSX Running Daily Freight on ex-Clinchfield

July 27, 2017

CSX has resumed run-through freight service on its former Clinchfield Railroad route, but the move is expected to be temporary.

Trains magazine reported that trains Q696/Q697 are running between Cincinnati and Hamlet, North Carolina.

The magazine noted that trains have operated the full length of the Clinchfield in recent months although those moves were sporadic unit train moves and CSX has yet to re-establish the crew bases at each end of the route.

Nos. Q696/Q6967 are currently the only regularly scheduled daily trains on former Clinchfield.

CSX Coal Customer Rips the Railroad’s Service

July 26, 2017

CSX head E. Hunter Harrison and Murray Energy chief Robert Murray might not be exchanging Christmas cards this year even though Murray’s company is a major CSX shipper.

Murray said CSX service has gotten worse since Harrison took over as CEO of the railroad in March. Furthermore, Murray thinks CSX service has been poor for years.

To borrow a phrase from a popular movie of several years ago, Murray is mad as hell and is not going to take it anymore.

“We cannot sit idly by while CSX fails to provide agreed-to service, breaks their own charter from the federal government, and jeopardizes our company’s existence,” Murray said in a statement released last week.

As Murray sees it, CSX has for several years caused “countless” delays and cancellations of trains scheduled to haul coal from his company’s mines.

Murray’s shot across the bow of CSX came about the same time that Harrison was proclaiming that the fossil-fuel era is over.

As for Murray’s complaints about CSX service, “CSX strongly disagrees with Murray Energy’s statements and will respond fully and factually to any STB complaint,”said CSX spokesman Rob Doolittle said. “CSX will continue, as it has, to work with Murray Energy to provide rail service in accordance with CSX’s commitment to service excellence and compliance with regulatory obligations.”

Doolittle was referencing a statement made by Murray that the company has filed a complaint with the Surface Transportation Board.

But Trains magazine reported on Tuesday that no formal complaint had been filed as of Monday.

The magazine said that Murray Energy might have notified the STB’s Rail Customer and Public Assistance Program, which quietly referees disputes between railroads and their customers.

Harrison made his comments about fossil fuels during a conference call with investors during which he discussed the company’s second quarter financial performance.

When asked about the future of coal and how it will affect CSX, Harrison said, “my personal view . . . is fossil fuels are dead. That’s a long-term view. It’s not going to happen overnight. It’s not going to be two or three years. But it’s going away, in my view.”

Harrison followed that up by saying that CSX would not be making capital investments in its coal network.

CSX management had taken a similar view long before Harrison arrived, saying that in the face of declining coal traffic it was focusing capital investments on its high-density core routes that form a triangle connecting Chicago, New York, and Florida.

CSX earned $3.7 billion handling 1.5 million coal carloads in 2011 but in 2016 that had fallen to $1.8 billion and 838,000 carloads of coal.

NS to Auction Locomotives, Passenger Cars

July 25, 2017

More Norfolk Southern locomotives are about to go on the auction block.

The railroad plans to sell more than 70 EMD GP38-2 high-hood locomotives and five passenger cars on Aug. 17 in Roanoke, Virginia.

The lot includes former Southern Railway 2,000 horsepower high-hood locomotives in the 5000 and 5100 series that are in mothballs.

The units worked largely in local switching service on the Pocahontas, Piedmont, Georgia and Alabama divisions and are said to be unique due to their Southern-affiliated sub-lettering.

This includes initials for the Central of Georgia, Alabama Great Southern Railroad, Georgia Southern & Florida Railway, Carolina & Northwestern Railway, and Cincinnati, New Orleans & Texas Pacific Railway railroads.

Also being auctioned are two ex-Southern EMD MP15Es (2393 and 2416) and Railpower RP20CD genset 3830.

NS passenger cars being offered for sale include five Tuscan red cars once used in steam excursion service: Nos. 43, 44, 45, 46, and 47.

These cars were once used in commuter train service in Pittsburgh and by the Connecticut Department of Transportation’s Shoreline East service before going to NS.

The auction, being conducted by Blackmon Auctions, also will include extra passenger car seats, and such locomotive parts such as injectors, radiators, filter kits and other items.

Class 1 RR Employment Continued to Fall in June

July 25, 2017

Class 1 Railroad employment continued to fall last month the U.S. Surface Transportation Board said.

The railroads employed 148,627 as of mid-June, down 0.27 percent since mid-May’s employment figure and down 2.49 percent compared with mid-June 2016.

Four out of six employment categories fell in mid-June including executives, officials and staff assistants, down 0.53 percent to 8,699 employees; maintenance of way and structures, down 0.34 percent to 34,042; maintenance of equipment and stores, down 1.54 percent to 27,300; and transportation (other than train and engine), down 0.34 percent to 5,805.

The number of professional and administrative employees rose 1.43 percent to 12,685, while transportation and engine employment rose 0.04 percent to 60,096.

On a year over year basis, the number of executives, officials and staff assistants was down 6.32 percent; professional and administrative, down 8.11 percent; maintenance of way and structures, down 6.17 percent; maintenance of equipment and stores, down 4.98 percent; and transportation (other than T&E) down 5.5 percent. The number of T&E employees increased 3.29 percent.

CSX Seeking to End Pusher Locomotives

July 24, 2017

CSX is seeking to end pusher locomotive operation various accounts say.

Trains magazine said on its website that United Transportation Union Local 1162, which represents employees on the former Clinchfield Railroad in eastern Tennessee, reported the news on its Facebook page on July 14.

“Our office is being informed that the carrier has made the decision today to cut off all the pusher assignments on our property,” the union said.

Trains said it has learned that CSX is also attempting to remove pusher locomotives from the former Baltimore & Ohio mainline over Sand Patch grade in Pennsylvania.

The magazine reported that is learned from a CSX employee that pusher assignments in Brunswick, Maryland, have been abolished.

The efforts to end pusher service out of Hyndman and Connellsville did not work well, creating a traffic log jam. Those pusher assignments have reportedly been reinstated.

CSX also is reportedly seeking to end pusher operations on its Mountain Subdivision at Grafton, West Virginia.

Management has instructed crews to double the hill or borrow motive power from other trains to assist them.

In some instance, CSX has shortened train length, particularly on the former Chesapeake & Ohio lines in West Virginia and Virginia where unit coal trains are common.

Unit trains of 150 cars have been cut to 100 cars and three locomotives are being assigned to the head end rather than using two locomotives and a pusher on the rear in territories where grades are steep.

“As part of an ongoing comprehensive review of company operations, CSX continues to make changes across its network, including changes to operating rules, to improve safety, efficiency and service to customers,” CSX representative Rob Doolittle told Trains. “As these operational changes are made, CSX managers are communicating with employees and any other stakeholders who may be impacted to implement changes safely and effectively.”

Amtrak to Skip Buffalo Exchange Street on July 23-24

July 22, 2017

Amtrak’s New York-Toronto Maple Leaf and New York-Niagara Falls Empire Service trains will not stop at Buffalo Exchange Street Station on July 23 and 24 due to track work being performed by CSX.

Alternative transportation will be provided between the Exchange Street station and Buffalo-Depew station.

Affected are Trains 63, 64, 281, 283, 284 and 288 on July 23, and trains Trains 63, 64, 280, 281, 283 and 284 on July 24.