Posts Tagged ‘U.S. Class 1 Railroads’

Class 1 Rail Employment Up Slightly in April

May 22, 2018

Class 1 railroad employ rose slightly in April, but is still down from the level it was a year ago.

The U.S. Surface Transportation Board said railroads employed 145,959 workers in mid-April, which was an increase of 0.59 percent over mid March, but a 2.11 percent decline compared with April 2017.

All but one employment category — professional and administrative — reflected slight increases in the workforce on a month-over-month basis.

Categories that saw increases since mid March included executives, officials and staff assistants, up 0.07 percent to 8,298 workers; maintenance of way and structures, up 0.65 percent to 32,644; maintenance of equipment and stores up 0.22 percent to 26,647; transportation (other than train and engine), up 0.18 percent to 5,566; and transportation (train and engine), up 0.99 percent to 60,891.

The professional and administrative category fell 0.21 percent to 11,913 employees when comparing April with March of 2018.

On a year-to-year comparison, all but one category — transportation (train and engine) — saw decreases.

Categories that posted declines since then included executives and staff assistants, down 6.05 percent; professional and administrative, down 5.98 percent; maintenance of way and structures, down 4.6 percent; maintenance of equipment and stores, down 4.32 percent; and transportation (other than train and engine), down 4.84 percent.

The transportation (train and engine) workforce category rose 2.02 percent in April compared with April 2017.


AAR Says Technology Has Made RRs Safer

May 16, 2018

America’s freight railroads are safer because the industry has invested an estimated $100 billion into infrastructure, equipment and technology over the past four years The Association of American Railroads said this week.

AAR issued a white paper that reported that mainline railroad accidents have declined by 32 percent over the past decade.

The paper was released as part of AAR’s RailxTech event being held in Washington.

It details how railroads are using technology to monitor more than 1.6 million rail cars and 40,000 locomotives operating across the 140,000-mile U.S. rail network.

Among the uses of technology that railroads are employing are:

• Deploying trackside detectors using infrared and lasers to identify microscopic flaws in equipment as trains pass by at track speed. This real-time assessment of infrastructure and equipment has allowed railroads to schedule and conduct proactive maintenance, which improves safety as well as network fluidity and productivity.

• Using software to analyze such factors as system-wide train schedules, speed restrictions, crew schedules and other train operations. This information helps train dispatchers manage and modify operations.

• Installation of in-cab fuel management systems has improved fuel efficiency by up to 14 percent, which has helped railroads reduce their environmental footprint. Tier 4 locomotives have reduced emissions from diesel locomotives by as much as 90 percent and will continue to be phased into rail fleets nationwide.

NS Gets Chemical Shippers Award

May 2, 2018

Norfolk Southern has been awarded the Responsible Care® Partner of the Year Award for Class 1 railroads by the American Chemistry Council.

In a news release, the carrier said the award was for an exemplary performance and safety record in transporting chemicals.

NS was one of the three companies and the only freight railroad to receive the award, which is given to companies involved in the distribution, transportation, storage, use, treatment, disposal, and sales and marketing of chemicals.

Since 1996, NS has participated in the voluntary Responsible Care Partner program, which is the chemical industry’s environmental, health, safety and security performance initiative.

As a program participant, NS must achieve third-party certification of its business management systems every three years, which includes reviews of the railroad’s safety, environmental stewardship and security.

“Our partnership with the council and its member shippers represents a strong commitment across business sectors to ensure the safety and security of our employees, communities and environment while delivering the quality service that our customers expect,” said NS Executive Vice President and Chief Operating Officer Mike Wheeler in a statement.

Winter Put CN 1st Quarter Revenue in Deep Freeze

April 25, 2018

Canadian National blamed harsh winter weather for depressing its first quarter financial numbers.

CN said first quarter revenue was flat at $3.2 billion while operating income fell 16 percent to $1 billion.

Net income declined by 16 percent to $741 million and operating expenses jumped 9 percent to $2.2 billion compared with the first quarter of 2017 results. All figures are in Canadian dollars.

The Montreal-based company said revenue ton-miles declined 4 percent to 57.2 million but carloads increased 3 percent to 1.4 million units. The operating ratio rose 6 points to 67.8.

By traffic segment, coal and intermodal revenue rose 10 percent to $142 million and $814 million, respectively, and metals and minerals revenue increased 7 percent to $388 million on a year-over-year basis.

However, grain and fertilizers revenue fell 11 percent to $539 million, forest products revenue dropped 6 percent to $422 million, automotive revenue declined 4 percent to $197 million, and petroleum and chemicals revenue decreased 3 percent to $564 million.

Aside from bad weather, CN also said its flat revenue resulted from a negative translation impact from the stronger Canadian dollar, which partly was offset by higher fuel surcharges and rates. The increase in operating costs was caused by weather, higher training costs for new employees and higher fuel prices.

CN officials said the harsh winter affected train lengths and caused operational performance to further slip after eroding since fall because of an unexpected double-digit traffic gain last year.

“We had lower resiliency in some high-volume areas going into winter, [which] made maintaining fluidity very challenging. Fluidity is the most important thing,” said Executive Vice President and Chief Operating Officer Mike Cory. “This lower resiliency, coupled with the extreme harsh winter conditions in those same areas, resulted in a decline in the service levels and an increase in [operational] costs.”

CN officials said they expect to spend $400 million — compared with a previously announced $250 million — to complete 29 major infrastructure capacity projects, mainly in western Canada. This includes new double track, more and longer sidings, and yard capacity expansions.

The railroad is also acquiring additional locomotives and box cars, along with hiring more train crew members.

“Our metrics are showing sustained, sequential improvement, and that momentum will build as we continue to expand track capacity, add crews and bring on new locomotives,” said interim CN President and Chief Executive Officer Jean-Jacques Ruest. “With the people, equipment and infrastructure in place, and with a solid pipeline of growth opportunities ahead of us, we are confident in our ability to bring long-term value creation to our customers and shareholders.”

Class 1 Employment Up Slightly in March

April 23, 2018

Employment at U.S. Class I railroads rose in March over February’s level but declined when compared with March 2017.

In mid-March, U.S. Class Is employed 145,105 workers, up 0.2 percent compared with mid-February’s level, but down 2.8 percent compared with mid-March 2017’

The U.S. Surface Transportation Board said two of six employment categories reflected workforce increases on a month-over-month basis.

They were train and engine, up 0.8 percent to 60,297 employees; and maintenance of way and structures, up 0.6 percent to 32,433 workers.

Falling were executives, officials and staff assistants, down 0.7 percent to 8,292; professional and administrative, down 0.9 percent to 11,938; maintenance of equipment and stores, down 0.6 percent to 26,589; and transportation (other than train and engine), down 0.6 to 5,556.

On a year-over-year basis, five of the six categories reflected decreases: professional and administrative, down 9.6 percent; executives, officials and staff assistants, down 8.5 percent; maintenance of way and structures, down 4.9 percent; transportation (other than train and engine), down 4.9 percent; and maintenance of equipment and stores, down 4.8 percent.

Only the train and engine category reflected an increase — 1.9 percent — in mid-March compared with the same time last year.

AAR Warns Tariffs Would Harm Railroads

April 17, 2018

The Association of American Railroads is warning that tariffs on foreign goods could adversely affect U.S. grain exports, which in turn would be bad for Class 1 railroads.

 “For the industry whose job is to connect businesses, the integration of the global supply chain changed the game not just for our customers but also for how we run a railroad,” AAR said in a statement in response to the Trump administration recently announcing billions of dollars worth of punitive tariffs on Chinese-made products.

The administration has described the tariffs as a way to address what it terms unfair trade practices by China.

The tariffs on Chinese goods have not yet gone into effect and the threat of a trade war has sent stock prices plunging in recent weeks.

AAR released an analysis that showed international trade directly accounts for 42 percent of rail carloads and intermodal units, 35 percent of annual rail revenue, and 50,000 rail jobs worth more than $5.5 billion in annual wages and benefits.

“With ongoing trade posturing, much of the discussion of potential impacts has been narrowly focused on targeted commodities or whether the states where those goods are grown or produced went red or blue in 2016,” the AAR said. “Even when looking at a single commodity, the potential effect in a global market goes much deeper.”

Speaking of grain exports, AAR said farmers are accustomed to dealing with uncertainty due to weather or fluctuating prices and demand,  but “[t]hrowing questions about what foreign markets will resemble come harvest makes already challenging planting decisions even more fraught.”

AAR said that its members are caught in the middle in trying to plan for asset allocation “when they don’t know if their services will be needed.”

The AAR said rail revenue from grain totals more than $5 billion annually.

Mexico is the second-largest importer of corn whereas China purchases 62 percent of soy exports and 22 percent of sorghum exports.

Most agricultural products exported to China begin their journey in a rail car.

NS Outlines Plans to Improve Service

April 5, 2018

Norfolk Southern has acknowledged in a letter to the U.S. Surface Transportation Board that its service “is not where we or our customers need it to be.”

NS CEO James Squires said in the letter that restoring service levels is the railroad’s top priority.

Squires was writing in response to an STB request for Class 1 railroads to outline their service plans for 2018. The request came in the wake of persistent shipper complaints about deteriorating freight service.

In his letter, Squires said NS service challenges began in its southern network after a series of hurricanes last September and October.

Exacerbating the problems were snowstorms in December and January.

All of this resulted in the weekly average speed during the first 11 weeks of this year being down 16 percent compared with the same period in 2017.

It also fell by 11 percent in the first quarter of 2018 compared with the last quarter of 2017.

The average dwell time in terminals was 21 percent higher during the first quarter of this year compared with the same period in 2017 and 9 percent higher compared with the fourth quarter of 2017.

“Our local performance is currently 7 percent below where we typically perform,” Squires wrote. “Terminals and yards in the southeastern portion of our network in particular are performing below historical norms. These metrics are not where we want them to be. But, we are committed to improving for our customers.”

NS outlined the steps that it plans to take to improve customer service, which include:

• Resuming through freight operations on the former Central of Georgia route. “While we never idled this line, we ceased through freight operations over the route in the first half of 2017. We restored full through freight service to help improve network fluidity,” Squires wrote.

• Removing 100 road locomotives from storage and leasing 90 road locomotives. “Through March 23, 2018, we have 27 of the anticipated 90 locomotives on our property and have deployed 22 of these 27 in active service,” Squires said.

• Increasing the number of operating crews.

• Using technological solutions to improve operations.

• Developing a new customer notification system when shipments are delayed.

CSX Outlines 2018 Service Plan

March 30, 2018

In response to a U.S. Surface Transportation board request for information, CSX CEO James M. Foote has written to the board to tout what he described as the railroad’s recovery from its service issues of 2017.

The letter was in response to a board request to all Class 1 railroads operating in the United States to outline their service plans for the remainder of the year.

The STB said the request for information came in the wake of complaints the board has received from shipper organizations about deteriorating service quality on railroads generally.

In his letter to the STB, Foote thanked the agency for is recent finding that CSX had made  “marked improvement” in its service metrics.

Foote said CSX service metrics in recent weeks have been above 2017 averages “and we’ve achieved record levels for velocity, car order fulfillment and dwell.”

The letter recounted CSX plans in various areas as requested by the STB.

CSX has 2,900 active locomotives and 600 additional locomotives stored and serviceable as needed.

Locomotive power availability has been 99 percent, “demonstrating that our locomotive levels are consistently meeting train service demands,” the letter said.

CSX said that its locomotive fleet is adequate to meet customer demand and it has no plans to acquire locomotives in 2018.

In the area of employee resources, CSX said it has 8,474 train and engine employees along with more than 900 employees on furlough who could be recalled if needed.

Foote said re-crew rates are at a historic low rate of less than 2 percent while crew availability has been 95 percent in recent months. CSX does not expect to increase its T&E headcount this year.

Foote said the precision scheduled railroading model places particular emphasis on the responsibility of local managerial teams to ensure a safe, efficient operation that meets customer needs.

The carrier is training 50 new trainmasters who will be deployed throughout the network to fill vacancies and strengthen field management.

Another focus of precision scheduled railroading, Foote said, is end-to-end transit and meeting customer expectations for the complete movement.

“Local service is a key element of that complete movement, and we have made significant improvements in this critical area with terminal productivity and performance measures at normal, healthy levels across the network,” Foote wrote.

CSX said it has made progress on the development and testing of an end-to-end trip plan compliance measurement that will track cars in all operating circumstances and allow for real-time management and decision-making to maximize delivery as scheduled.

“While the development of this new measure is under way, customers continue to have readily available access to CSX capabilities and performance via ShipCSX, customized to that shipper’s freight needs and patterns,” Foote wrote. “All customers who use ShipCSX currently have access to the trip plan for a given car in scheduled service and can view this information to plan, ship, and trace their shipments. Our online tools allow customers to monitor their service schedules, provide on-demand railcar tracking with an estimated time of arrival, as well as view planned and historical transits that can be quickly analyzed for transit performance and exceptions.”

Foote told the STB that CSX expects total traffic growth in 2018 to be flat when compared with last year.

He said thus far in 2018, traffic has been what the company expected with the exception of higher export coal demand driven by global market conditions.

Foote pledged to continue talking with its customers, saying he has met with shippers at the National Freight Transportation Association Conference and that the railroad’s sales and marketing staff regularly attend customer forums to provide updates and receive customer feedback.

“Our Customer Service personnel address customer concerns when needed to supplement the direct outreach channels of local operations and sales and marketing,” Foote wrote. “We also communicate with our customers through the electronic platforms of ShipCSX, Service Advisories, and Intermodal Fast Facts.”

In regards to capacity constraints, CSX argued that its network and terminals are fluid.

“We have effectively delivered service to our customers through extended winter conditions, and we are well-prepared to handle the seasonal rise in volumes during the second quarter,”
Foote wrote.

He also cited working with other railroads to create plans for interchange and blocking in and outside of Chicago to improve interline connections.

“Whenever practicable, we re-route traffic through less-congested interchange locations and assemble blocks of traffic for destinations further into our respective networks—thus reducing congestion and overall transit time,” Foote said.

He said that with intermodal demand rising across the industry there has been longer container dwell times in terminals.

“To ensure ongoing terminal fluidity and support asset utilization that benefits both CSX and customers, we have adjusted intermodal terminal storage policies and are working with customers to more effectively align terminal capacity with trucking operations,” Foote wrote.

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.