Posts Tagged ‘Norfolk Southern’

Supply Chain Congestion Seen as Lasting 6 Months

September 17, 2021

Industry observers expect that the tangled global supply chain will take at least six months to untangle, reported Trains magazine this week on  its website.

The magazine quoted intermodal consultant Larry Gross as saying the strain on the intermodal operations is unprecedented, the worst he has seen in his 41 years in the business.

Gross spoke during a panel discussion at the Intermodal Association of North America’s annual Intermodal Expo event.

Analysts say that a flood of imports driven by an explosion in consumer spending has hindered the supply chain between Asian ports, to U.S. ports to railroad networks and their intermodal terminals.

Also driving the congestion has been the fact that retailers are struggling to keep up with consumer demand because their product inventories dipped during the early stages of the COVID-19 pandemic.

A record 59 container ships recently were reported to be anchored off the ports of Los Angeles and Long Beach awaiting berth space.

Lars Jensen of Copenhagen-based Vespucci Maritime told the panel that some of those vessels have been in San Pedro Bay for more than two weeks, delaying the unloading of more than 400,000 twenty-foot equivalent units, or TEUs, the standard measure of international containers.

Much of that cargo will eventually travel to the Midwest and Texas via BNSF or Union Pacific intermodal trains.

Rail intermodal volume has fallen by 10 percent from its May levels and is down 7 percent compared to where it was a year ago at this time.

 “What we really have here is a system starting to bog down from all the operational constraints, congestion, and lower velocity, shortage of equipment, you name it,” Gross said.

He said all links in the supply chain share some of the blame for that congestion.

One panelist, Evan Armstrong of Armstrong & Associates, said railroads are missing an opportunity to pick up business that is instead going to trucking companies.

Yet railroads say shippers have been slow to pick up their containers at intermodal terminals, particularly in Chicago, and that has had a cascading effect.

 Shippers also have been holding containers at their warehouses, which has created a shortage of chassis used to tote containers.

Tim Denoyer, vice president and senior analyst at ACT Research, said the chassis shortage is unlikely to be resolved for another six to 12 months.

Officials at Union Pacific, Norfolk Southern, and Canadian Pacific all said during the panel discussion that intermodal systems were in “disarray” around the globe.

They said their intermodal networks have capacity to handle current volumes, but only if all links in the supply chain are working relatively smoothly.

“Everything depends on speed,” said Leggett Kitchin, NS vice president of domestic intermodal. “At the current speeds, the box supply is probably tight.To the extent that we can speed up, and the street can speed up, then we’ll have capacity to grow into.”

NS Donates $400,000 to Food Banks

September 11, 2021

Norfolk Southern said this week it will award $400,000 in grants to aid 31 food banks in 22 states served by the railroad.

Among the organizations receiving grants were the Central Pennsylvania Foodbank, Community Harvest Food Bank of Northeast Indiana, Facing Hunger Foodbank of West Virginia, Food Bank of Northern Indiana, Food Finders Food Bank of Indiana, Freestore foodbank of Ohio, Gleaners of Indiana, God’s Pantry Food Bank of Kentucky, Greater Pittsburgh Community Food Bank, Mid-Ohio Food Bank, Second Harvest Food Bank of North Central Ohio, Toledo Northwestern Ohio Food Bank and Tri-State Food Bank of Indiana.

In a news release, NS said it was making the grants to help communities battle food insecurity and to battle the effects of the COVID-19 pandemic.

CSX Willing to Give up PAS Ownership

September 11, 2021

CSX CEO James Foote said during a conference this week that his company is open to giving up its half ownership of Pan Am Southern if it is allowed to acquire Pan Am Railways.

PAS ownership is currently split between Norfolk Southern and Pan Am. PAS provides NS with access to Boston.

CSX has proposed keeping its PAS ownership but giving operating control of it to a neutral party, a subsidiary of short line railroad conglomerate Genesee & Wyoming.

However, some critics of the CSX-Pan Am deal have argued that the G&W subsidiary – Berkshire & Eastern – is not necessarily a neutral party.

Speaking to the North American Rail Shippers conference on Thursday, Foote said, “It was our partner in that initiative that thought we should do it this way.”

PAS oversees the former Boston & Maine west of Ayer, Massachusetts, and a north-south route along the Connecticut River in Vermont, Massachusetts, and Connecticut.

Among those opposing CSX plans for PAS are the U.S. Justice Department, Canadian Pacific, and Vermont public officials.

All have said the manner in which CSX has proposed to handle PAS raises competitive concerns, saying CSX is already the dominant freight railroads in New England.

Foote said he is baffled by why CP wants to route its New England traffic through the Hoosac Tunnel, which cannot accommodate double-stack intermodal traffic.

 “We’ve got a super deluxe double-stack railroad, but they don’t like it for some reason,” Foote said about his company’s Boston & Albany route.

A UP Kind of Day

September 10, 2021

This past Wednesday was a Union Pacific kind of day. It began with catching a former Union Pacific 10-6 sleeping car on the rear of Amtrak’s westbound Lake Shore Limited in Chesterton, Indiana.

The car, now owned by Webb Rail, was built in June 1950 by Budd. In its current reiteration, it read “Pullman” in the letterboard and “Pacific Union” in the car name space.

A few hours later I had ventured further east to Otis, Indiana, where I caught Norfolk Southern train 39E coming around a curve with a pair of UP motors.

The train originates in Elkhart and goes to the UP at Proviso Yard in Chicago.

Indiana Short Line Loses Lease on Track

September 7, 2021

An Indiana short line railroad will cease operations on Sept. 20 after losing its lease of track owned by Norfolk Southern.

The Connersville & New Castle, a Class III carrier, has leased track between New Castle and Beesons, on a former Nickel Plate Road branch.

NS canceled the lease and said it planned to assumed common carrier service obligations on Sept. 20.

However, NS also indicated in a recent filing with the U.S. Surface Transportation Board that it planned to contract with another short line, the New Castle Southern, to operate the line.

The C&NC began operating the 21-mile route between Connersville and New Castle in 1997, taking it over from Indiana Hi Rail.

At its peak, Indiana Hi Rail operated 461 miles of track in Indiana, Illinois and Ohio. It filed for bankruptcy protection 1994 and it assets were sold piecemeal.

Officially, the Connersville & New Castle is known as the C&NC and uses the reporting marks CNUR.

Storm Disrupts Some NS Service

September 3, 2021

Norfolk Southern said this week that some freight service has been disrupted by the effects of Hurricane Ida.

It issued a service advisory saying several of its facilities are inaccessible due to flooding.

Intermodal terminals in Croxton, New Jersey; Elizabeth, New Jersey; and Morrisville, Pennsylvania, are closed to incoming traffic.

Although some traffic continues to leave those facilities, NS said traffic may experience areas of standing water.

In the meantime, NS has resumed interchanging traffic in New Orleans as well as local service in Mobile, Alabama. However, the NS New Orleans Intermodal Terminal will be closed for the rest of the week.

Chasing the NKP 765 Ferry Move on Monday

September 1, 2021

Crossing the Vermilion River on the NS Chicago Line in Vermilon.
Soaring over Baumhart Road between Vermilion and Amherst. The sign indicates this is in Lorain.
Crossing Ridge Road. Seeing smoke prompted someone to call the fire department.
Crossing the Cuyahoga River in Cleveland.
Backing into Campbell Road Yard in Cleveland

I went out to chase the Nickel Plate 765 ferry move on Monday. We tried to get it west of Bellevue but just missed it.  We then got it at Vermillion and Baumhart Road. 

We then chased it to Eastland Road in Brook Park but got cloud skunked there.  The 765 was supposed to overnight at Rockport yard but instead continued to Campbell Road yard in the flats so we chased it down there, too.

Photographs by Todd Dillon

Amtrak, CP Wants Conditions on CSX-Pan Am Merger

August 31, 2021

Canadian Pacific and Amtrak are asking the U.S. Surface Transportation Board to impose certain conditions on the CSX acquisition of Pan Am Railways.

In its filing, CP contends that the merger will threaten the viability of the former Boston & Maine Hoosac Tunnel route that provides competition for CSX’s own New England main line.

CP said most of its New England traffic operates via Mechanicville, New York, and the former Boston & Maine route that is now part of the Pan Am Southern joint venture between Pan Am Railways and Norfolk Southern.

James Clements, CP’s senior vice president of strategic planning and technology transformation, said in the filing that if CSX becomes a half owner of PAS it will have an incentive to downgrade PAS’s competition against CSX single-line routes

“Though PAS’s Hoosac Tunnel Route hosts relatively few daily freight trains, it serves as a vital and unique competitive discipline to CSX, which dominates traffic volumes,” Clements wrote.

“CSX will have a veto over capital maintenance and other investments in the viability of the competing PAS route,” he wrote in the filing.

CP fears that NS plans to divert its intermodal traffic to the former Boston & Albany route now operated by CSX would reduce NS’s incentive to support the viability of the Hoosac Tunnel route.

CSX has proposed having a Genesee & Wyoming subsidiary, Berkshire & Eastern, serve as a neutral operator of the PAS.

But CP questioned whether B&E would be a neutral carrier due to G&W’s ownership of neighboring lines in New England, including New England Central, Providence & Worcester, and Saint Lawrence & Atlantic.

CP wants the STB to require that CSX and G&W keep open all Pan Am Southern gateways via the Hoosac Tunnel route, that PAS maintain the former B&M main line at or above pre-merger levels; and that PAS maintains current service levels, including frequency, transit times, and consistency.

The STB should also monitor the effects of the merger on the B&M and maintain the ability to impose additional conditions to “protect the viability of the route,” CP said.

CP projected that post-merger traffic on the line would fall by about a third due to the diversion of NS intermodal and auto trains and the shift of CSX-Pan Am Railways carload traffic to CSX’s former Boston & Albany line.

Clements said there is a risk that PAS would not restore service if there were another collapse in the Hoosac Tunnel as happened in 2020 when it took almost two months to reopen the tunnel.

As for Amtrak, it wants protection for current and potential expansions of passenger service in New England, noting that the CSX-Pan Am merger involves some routes on which passenger trains account for the majority of traffic.

In its STB filing, Amtrak said Pan Am has cooperated with efforts to improve Downeaster service between Boston and Maine as well as the launch of the Valley Flyer service in western New England.

“In contrast, CSXT consistently has taken the approach of obstructing the expansion of passenger rail, and to limit access to its facilities, despite the fact that CSXT is statutorily required to provide Amtrak with access to its rail lines,” Amtrak wrote. “Indeed, as the Board is aware from the current Gulf Coast dispute, CSXT has a history of stonewalling Amtrak’s requests for additional service.”

Amtrak cited CSX obstruction of an effort to launch seasonal, weekend-only Berkshire Flyer service between Albany-Rensselaer, New York, and Pittsfield, Massachusetts, which would be an extension of an existing Empire Service train.

Amtrak noted that CSX has demanded a traffic study and capacity improvements yet did not conduct a traffic study or require capacity improvements as part of its merger-related trackage rights agreement that would allow NS to divert a daily pair of intermodal trains to the former B&A route that Amtrak wants to use.

“Instead, CSXT now claims in its Application that the entire Albany-Worcester line ‘has excess capacity,’ directly contravening the position it continues to take with regard to the proposed seasonal, weekend Berkshire Flyer service that would operate over only a small portion of the line,” Amtrak wrote.

Amtrak also fears the merger could interfere with proposed service expansions in New England, including linking Boston with Concord, New Hampshire; an increase in Boston-Albany service to two daily round-trips; and increased Downeaster service from Boston to Brunswick, Maine, and a summer seasonal extension of Downeaster service to Rockland, Maine.

CSX has said that its acquisition of Pan Am would have no negative impact on passenger and commuter service in New England.

Amtrak said regulators failed to impose conditions to protect passenger service in previous merger cases and Amtrak service consequently suffered.

The passenger carrier cited CSX’s lease of the Buckingham Branch in Virginia; the split of Conrail between CSX and Norfolk Southern; Canadian National’s acquisition of Illinois Central; and the Union Pacific-Southern Pacific merger.

Amtrak wants seven conditions imposed on the CSX-Pan Am merger including requiring CSX to fulfill all of its merger-related promises regarding passenger service.

That will include a commitment that the NS trains will be scheduled to operate over CSX’s B&A line outside of the Lake Shore Limited’s operating windows and that the NS trains don’t interfere with the Valley Flyer and Vermonter service at the diamond in Springfield, Massachusettts, where their routes cross.

Amtrak also wants the STB to require that CSX negotiate in good faith with Amtrak and its state partners for service expansions, improvements, and additional weekend and seasonal service, particularly on its route between Albany and Worcester; that CSX be ordered to cooperate with Amtrak and its partners to identify what improvements would be required to raise passenger train speeds on Pan Am and CSX routes, then work in good faith to promptly make improvements.

CSX should be ordered to not make operational changes that would result in a deterioration of on-time performance of Amtrak trains and that non-emergency trackwork be undertaken during non-peak passenger periods.

Amtrak also wants CSX to be ordered to provide for the operation of up to four weekend Berkshire Flyer trips in the summer between Albany and Pittsfield within 90 days written notice from Amtrak and without any Amtrak-funded capacity improvements.

As Amtrak was being critical of CSX in its filing, the agency that sponsors Downeaster Service wrote to the STB in favor of the merger.

The Northern New England Passenger Rail Authority said CSX had worked with it to address a number of issues, including station locations.

 “As the State Sponsor of the Amtrak Downeaster, which operates over approximately 106 miles of railroad to be controlled by CSX if this transaction is approved, NNEPRA expects to maintain strong and productive working relationships with the host railroad,” Executive Director Patricia Quinn wrote.

The Massachusetts Department of Transportation said it hoped it could reach a written agreement with CSX that would satisfy the state’s concerns about ensuring that the merger does not have a negative impact on passenger and commuter service.

But it also asked the STB to order CSX to turn over dispatching of commuter lines to the Massachusetts Bay Transportation Authority and to cooperate in the launch of new passenger service west of Worcester on the B&A, and west of Ayer, Massachusetts, on Pan Am, as well as Berkshire Flyer service.

Yet more concerns about the CSX-Pan Am merger have been raised by the Vermont Rail System and the Vermont Agency of Transportation.

Both wrote to the STB to argue that having B&E operate PAS would reduce rail competition in Vermont because it would give G&W railroads “a near monopoly on interchange with VRS.”

“This seems akin to NS having to interchange all of its traffic with CSX to get to BNSF or UP in the west,” R.L. Banks & Associates consultant James Cunningham wrote in the railroad’s filing. “In this hypothetical, CSX would not know the rates under which NS traffic was moving but it would see the commodities and volumes to obtain a much better picture of the overall market. NS would never tolerate that commercial disadvantage and neither can VRS.”

But VRS, the filing notes, would be at more of a disadvantage because Berkshire & Eastern would have access to its rates.

“Choosing GWI as the third party is the wrong choice. It gives the world’s largest short line and regional railroad holding company another puzzle piece in the New England area where its presence is already one of, if not the, largest,” Cunningham wrote. “Other short lines and short line holding companies that have the ability and credentials in the industry to operate the PAS in a truly independent manner. By choosing GWI, CSX and NS have solved one problem by choosing the course of least resistance but creating another which can only be fixed by selecting another operator of PAS.”

DOJ Raises Concerns About CSX-Pan Am Merger

August 27, 2021

The U.S. Department of Justice has recommended to the U.S. Surface Transportation Board that CSX be ordered to sell its stake in Pan Am Southern as a condition of its merger with Pan Am Railways.

CSX wants to acquire Pan Am, which owns half ownership of PAS with Norfolk Southern.

DOT said the acquisition of Pan Am by CSX raises competitive concerns because CSX would own its own route into New England and half-own the parallel PAS.

“The proposed transaction would give CSX both control over the operating entity on a competing line and a 50 percent stake in the track and physical infrastructure of that line,” DOJ said in a filing with the STB. “This arrangement is likely to diminish competition between CSX and PAS on these parallel routes,”

Pan Am Southern was created by the two railroads to provide NS with access to the Boston region via Ayer, Massachusetts.

It also operates a north-south route along the Connecticut River from Vermont to Connecticut.

However, CSX has proposed assuming Pan Am’s share of PAS while turning the latter over to a Genesee & Wyoming subsidiary, the Berkshire & Eastern, to be a neutral operator of the PAS routes.

“Additionally, the transaction may allow CSX to impair the ability of its remaining rival, NS, to effectively compete. Although NS owns, and will continue to own, the other 50 percent of the PAS line, CSX could potentially hamstring its rival through its stake in PAS and its control of the joint venture’s operating entity. Because certain joint venture customers will purchase service attributable to NS, CSX could undermine NS notwithstanding the joint venture by sabotaging this service and expecting to recapture traffic on its independent line.”

DOJ also raised concerns about reduced competition in the Knowledge Corridor along the Connecticut River from White River Junction, Vermont, through Massachusetts and Connecticut.

PAS uses its own trackage and trackage rights over G&W’s New England Central to reach White River Junction to interchange with Vermont Rail System.

“If the CSX-Pan Am transaction is consummated and B&E becomes the contract operator of the Knowledge Corridor PAS line, G&W subsidiaries will be both the contract operator of PAS and PAS’s primary competitor,” the DOJ wrote in its filing. “In effect, the proposed remedy reduces the numbers of competitors in the Knowledge Corridor from two to one.”

DOJ said it was “highly skeptical” that two G&W railroads — Berkshire & Eastern and New England Central — could compete with each other effectively on the north-south route.

“Ultimately, the easiest, cleanest, and least risky solution would be a structural remedy involving the sale of Pan Am’s stake in PAS to another party that could operate PAS,” the Justice Department said. “Structural remedies are strongly preferred in merger cases because they are clean and effective, and they avoid ongoing government entanglement in the market.”

Actually, it’s a Norfolk Southern Train

August 24, 2021

Technically this is a Norfolk Southern train, but Norfolk & Western-painted SD40-2 No. 1634 and its train are in Frank, Ohio, on July 14, 1984, the Sandusky District.

Photograph by Robert Farkas