Posts Tagged ‘Class 1 railroad service issues’

AAR Closing Performance Data Website

July 26, 2019

A website that provided railroad performance measures has been shut down by the Association of American Railroads.

The railroad trade group said the site, which reported weekly Class I figures for terminal dwell, average train speed, and cars online, had outlived its usefulness.

The site was created following Class 1 railroad megamergers of the 1990s.

Canadian Pacific and CSX Transportation stopped providing information to the AAR site after they changing their metrics to a non-standard methodology.

CP, CSX and Canadian National  report weekly performance data in their own formats on their own websites.

Kansas City Southern and Union Pacific report weekly AAR-standard data on their websites while Norfolk Southern has begun providing monthly performance data on its website.

BNSF provides detailed network updates every other week.

All Class 1 railroads still provide AAR-standard performance metrics weekly to the U.S. Surface Transportation Board, which makes that information available to the public.

Some believe that ending the user-friendly Railroad Performance Measures site makes it more difficult for shippers to gather rail performance data.

Shippers and regulators use that date to monitor the rail network as a whole and individual railroads.

When train speeds decline and terminal dwell increase over a period of weeks, it might be a sign of congestion and service problems.

“It does make it harder on shippers and other industry participants to be able to compare how carriers are doing,” Todd Tranausky, a rail analyst with FTR Transportation Intelligence told Trains magazine.

“With each carrier adapting its own methodology, you can only really compare the carrier to itself over time and not to other carriers. It also puts the onus on shippers to pull the data from the STB’s website, and to reconfigure existing systems they had in place to easily pull the data off the RPM website to point to the STB’s spreadsheets and formatting. I think shippers care from the standpoint of it making it harder to have transparency into how carriers are doing and performing. The more sophisticated shippers will find the STB data and update their systems accordingly, but the smaller shippers will be turned off by it as one more example of carriers not wanting to be open and work with them on service performance.”

Analyst Says Cost Cutting Leaves Railroads Vulnerable

May 26, 2019

Class 1 railroads in North America are captive to the desires of Wall Street and that has left them vulnerable to unexpected although predictable calamities.

Rick Patterson, who works for Loop Capital Markets and was one employed as a railroader in Australia, said that as a result railroads get caught with shortages of crews and locomotives and can’t recover quickly from such things as hurricanes or polar vortexes.

Speaking at a meeting of the North American Rail Shippers Association, Patterson said that in the past five years rail service has been poor more often than it’s been good. He said the industry is trying to please Wall Street stock analysts who are laser focused on operating ratios, which are the percentage of revenue earned by a railroad that goes to pay operating expenses.

That has led to widespread cost-cutting moves, including idling locomotives and reducing the workforce, most often in the name of implementing the precision scheduled railroading model.

Patterson said as a result railroads try to perfectly match crew and motive power resources with their current traffic levels, a process that leaves then with no margin for error.

He said rail service can either be bad, good or truck-like.

Bad service occurs when operating metrics fall 10 percent or more below average and take six to 15 months to recover.

Good service occurs when freight generally arrives on the right day but is neither time-definite nor dependable.

Truck-like service occurs when service has day- and time-definite reliability and predictability.

By his calculations, Patterson said over the past five years service was good only in the past 22 percent of the quarters. It was bad in 35 percent of the quarters and showed no clear trend in the remaining quarters.

Patterson called CSX the best operating railroad in North America at present with its service composite is 41 percent higher than its historic average.

However, it had service problems during a polar vortex in 2013-2014 and during the early months of its transformation to PSR under the late E. Hunger Harrison.

“Hunter Harrison cuts the merchandise network over to PSR without apparently telling anybody, including his own operating people,” Paterson says. “But as usual, he was right and everything worked out and all was forgiven.”

Although PSR encourages cost cutting, Patterson said the operating model is a good one, noting that CSX recovered quickly after a pair of hurricanes last year that hindered service.

However, Norfolk Southern, which was hindered by the same storms, saw its velocity sink to the lowest levels since the Conrail split of 1999.

Patterson said railroads should plan for adverse weather, saying that climate change is likely to produce more extreme flooding, cold snaps, and wildfires.

The carriers could keep a buffer supply of crews and motive power relatively at low cost, which Paterson said would help maintain service levels during trying conditions.

He predicted that the pursuit of lower operating ratios will someday halt as carriers are unable to justify above-inflation freight rate increases and will be forced to seek more robust volume growth, which will require more power and crews.

Patterson called on shippers to encourage railroads to provide more consistent service by doing a better job of communicating expected freight volumes to the railroads.

He also said railroads could reduce locomotive risk by supporting multiple manufacturers and reduce crew risk by moving toward partial autonomous operations.

Another Shipper Group Unhappy With Railroads

March 27, 2018

A shipper group representing fertilizer producers has joined a growing chorus of customers that is giving the U.S. Surface Transportation Board an earful about service issues.

“Rail service challenges have been ongoing and increasingly pervasive,” wrote Chris Jahn, president of The Fertilizer Institute, in a letter posted on the STB website.

Although Jahn mentioned CSX, he went on to say the carrier, which underwent major operational changes in 2017, is not the only problem spot for his members.

If anything, Jahn said, CSX service has improved recently. But fertilizer produces continue to experience “serious service disruptions” when shipping on Canadian National, Canadian Pacific, Norfolk Southern and Union Pacific.

“Unfortunately, these service challenges are becoming increasingly pervasive,” Jahn wrote.

Some railroad industry analysts say service problems are a missed opportunity for railroad companies during a time when truck capacity is limited. Instead, carload freight volumes have been falling this year.

“This isn’t a crisis — but could lead to a gigantic missed market share opportunity,” Anthony B. Hatch of ABH Consulting said in an interview with Trains magazine.

STB Ending CSX Weekly Service Reports

March 22, 2018

The U.S. Surface Transportation Board has decided to stop requiring CSX to provide weekly service updates.

The Board, citing service improvements at CSX, said the reports will end effective April 1.

“We recognize that CSX Transportation has shown a marked improvement in its service metrics since the serious service disruptions that occurred throughout last summer and into the fall,” Chairman Ann Begeman and Vice Chairman Deb Miller said in a letter to CSX CEO James M. Foote.

After service issues arose last summer, the STB began requiring the reports last August. However, CSX will, along with other Class 1 railroads be required to provide the STB with a service outlook for the rest of the year.

That request was made this week following the receipt of letters from grain shippers and automakers that complained about slow and erratic service.

The STB said performance metrics at BNSF, CSX, and Kansas City Southern have held steady or improved but the performances of Canadian National, Canadian Pacific, Norfolk Southern and Union Pacific have deteriorated.

STB Seeks Class 1 Service Outlooks

March 21, 2018

America’s Class 1 railroads have been directed by the Surface Transportation board to submit service outlooks for 2018.

The action came in the wake of complaints the Board has received from two major rail shipper associations about deteriorating service.

Information being sought from the railroads includes locomotive availability; employee resources, including current train and engine employee headcount and managerial resources; local service performance, including locations where performance is trending below norms; this year’s service demand; communication with shippers; and capacity constraints.

“In recent weeks, the Board has become increasingly concerned about the overall state of rail service based on the weekly data collected by the Board,” the STB said in a letter dated March 16 that was sent to the CEOs of the railroads. “Although there are exceptions, most Class I railroads’ data indicate that service is deteriorating.”

The shipper groups that have complained to the STB are the National Grain and Feed Association and the Alliance of Automobile Manufacturers, both of which said their members have seen a significant deterioration in rail service in recent months.

The automobile alliance said there has been a serious shortage of bi-level and tri-level rail cars for transporting finished vehicles.

The grain shippers believes the root cause of the service decline is the “Class I railroads’ aggressive effort to reduce their operating ratios to impress Wall Street investors and shareholders.

“This, in turn, has resulted in the systemic shedding of resources by Class I carriers, including locomotives and crews, that has degraded service to unacceptable levels, and resulted in virtually nonexistent surge capacity to meet rail customers’ needs,” NGFA said in a March 10 letter to the STB.