Posts Tagged ‘U.S. Class 1 Railroads’

U.S. Class 1 Employment Stable in July

August 24, 2018

The U.S. Surface Transportation Board reported this week that U.S. Class I railroad employment was stable in July.

The railroads employed 147,426 people, up 0.1 percent from the count a month earlier and down less than a tenth of a percent from the workforce figure in July 2017.

On a month-over-month basis, the maintenance-of-way and structures segment of U.S. Class I workforce declined 0.3 percent to 32,617.

The other five segments posted gains: Transportation (other than train and engine), 1.7 percent to 5,691; executives, officials and staff assistants, 0.4 percent to 8,422; transportation (train and engine), 0.2 percent to 61,891; professional and administrative staff; 0.05 percent to 12,004; and maintenance of equipment and stores, 0.01 percent to 26,801.

On a year-over-year basis, only the transportation (train and engine) category showed growth, expanding 3.9 percent.

Professional and administrative staff shrunk 5 percent; the maintenance-of-way and structures workforce declined 3.6 percent; the number of executives, officials and staff assistants decreased nearly 3 percent; the transportation (other than train and engine) worker count dipped 1.7 percent; and the maintenance of equipment and stores employee tally slipped 0.9 percent.

Union Pacific employed 44,605; BNSF employed 43,063, Norfolk Southern employed 25, 993, CSX employed 20,418 and Kansas City Southern employed 3.051.


Class 1 Employment Up in June

July 20, 2018

Class 1 railroad employment was up slightly in mid-June the U.S. Surface Transportation Board reported.

The railroads employed 147,282 workers, which was up 0.19 percent from mid-May, but down 0.9 percent from mid-June 2017

Four of the six employment categories reflected increases on a month-over-month basis. These included executives, officials and staff assistants, up 0.35 percent to 8,388 workers; professional and administrative, up 1.35 percent to 11,998; transportation (other than train and engine), up 0.18 percent to 5,594; and transportation (train and engine), up 0.31 percent to 61,787.

Showing declines on a month-over-month basis were maintenance of way and structures, down 0.16 percent to 32,716 workers; and maintenance of equipment and stores, down 0.21 percent to 26,799.

On a year over year basis, all categories but one — transportation (train and engine) — showed decreases.

This included executives, officials and staff assistants, down 3.58 percent; professional and administrative, down 5.42 percent; maintenance of way and structures, down 3.9 percent; maintenance of equipment and stores, down 1.84 percent; and transportation (other than train and engine), down 3.63 percent.

The transportation (train and engine) category rose 2.81 percent in mid-June compared with a year ago.

Class 1s to Report Stellar 2nd Quarter Results

July 13, 2018

Wall Street analysts are expecting North America’s Class 1 railroads to report sterling financial results for the second quarter of this year because traffic has continued to rise and the railroads have also imposed rate increases.

A review of analysts’ projections that was undertaken by Trains magazine found that the Wall Street mavens are expecting earnings per share to rise by an average of 23 percent for all roads except Canadian National.

The rate increases have been made possible in part because of limited capacity in the trucking industry.

However, some analysts believe that railroad service issues have prevented them from reaping traffic growth opportunities, particularly in intermodal traffic.

The railroads have seen their intermodal traffic grow by around 5 to 6 percent and reach record-setting levels, but it could have been higher.

The demand by online retailers, such as Amazon, for brown paper and cardboard boxes has pulp and paper mills operating at high capacity yet they are relying on trucks and not rail to ship that commodity.

Pulp and paper traffic by rail is flat compared to last year and well below the five-year average.

Analysts are likely to be asking questions in coming weeks about how a trade war that is underway with the imposition of tariffs in a tit for tat fashion will affect the financial performance of railroads down the line.

The Association of American Railroads has noted that 42 percent of rail traffic and 35 percent of railroad revenue is linked to trade.

With the trucking industry operating at 100 percent, there remain opportunities for railroads to gain market share in freight volume.

CSX will report its second quarter results on July 17 while Norfolk Southern will issue its report on July 25.

All Class 1s Join Long Train Parade

July 9, 2018

CSX is not the only railroad that is running very long trains.

All of North America’s Class 1 railroads are dispatching trains ranging between 10,000 to 15,000 feet in an effort to boost productivity, become more efficient and slash operating costs.

The railroads also contend that longer trains maximize locomotives, crews and fuel while presenting dispatchers with fewer trains to handle.

These long trains are double the typical train size of between 5,000 and 6,000 feet.

However, not all Class 1 routinely operate such monster trains.

BNSF, Kansas City Southern, Norfolk Southern and, yes, CSX, operate 10,000 plus foot trains on a case-by-case basis although any trackside observer of CSX and, increasingly, NS might swear that nearly all of their trains are monster length.

At Canadian Pacific, Canadian National and Union Pacific long trains are routine.

The Association of American Railroads said that 95 percent of trains in the U.S. are less than 10,000 feet in length, but that Class 1s have been seeking to lengthen train length for several years.

A CSX spokesman told Progressive Railroading magazine that longer trains did not begin with E. Hunter Harrison and his precision scheduled railroading operating model.

“CSX data shows that over time, train length has evolved as business demands have warranted,” said CSX spokesman Christopher Smith.

He said that the demands of shippers and supply chains have led Class 1 railroads to lengthen average train length.

Nonetheless, during the first quarter of 2018 the average train length for all CSX road trains was 6,890 feet, or 5 percent longer than the same period in 2017.

Smith said that the scheduled railroading model that the late Harrison implemented has increased train lengths by consolidating train profiles to achieve efficiencies.

“Increased train length contributed to a significant reduction in the number of trains operated on a daily basis,” Smith said. “Year over year, [we] reduced the total number of active road trains per day by approximately 26 percent, or about 222 trains per day.”

Another benefit has been a decrease in grade crossing accidents because there are fewer opportunities for trains and motor vehicles to collide at crossings.

The result of longer trains has been that Class 1 railroads are lengthening sidings to at least 10,000 feet and laying more double track.

Positive Train Control is also expected to enable railroads to lengthen trains.

Longer trains have not always been well received by railroad workers. The SMART Transportation Division unsuccessfully asked the Federal Railroad Administration to issue an emergency order limiting train length.

But the FRA declined, saying there is no evidence to justify such an order.

SMART argued that a traint that is 2 or more miles in length can interrupt crew radio communications, block grade crossings for long periods and increase the probability of a mechanical failure.

“In mountain territory, a conductor can walk quite a ways from the locomotive, making communication with the cab difficult. That puts workers in dangerous situations,” said SMART National Legislative Director John Risch, who was a locomotive engineer for more than 30 years.

He also said that additional in-train forces can make it more difficult to keep a long train intact.

“When you double a train from 100 cars to 200 cars and then the train breaks up, the efficiencies the railroads talk about go out the window,” he said.

In the meantime, the Government Accountability Office is conducting a study on the effects of long trains and their potential safety hazards.

Railroad managers have countered that there is no evidence to support the arguments of the unions that operating employees lack sufficient training in handling long trains and say their companies are doing all they can to improve safety.

Most RRs Have Gained Traffic, But Not CSX

July 7, 2018

Five of the six Class 1 railroads in the United States have reported traffic gains in the first half of the year. The lone exception is CSX, which said its traffic is down 0.6 percent due to a decline in carload volume and the effect of intermodal service changes.

CSX last year jettisoned 7 percent of its intermodal volume by ending its hub-and-spoke intermodal network, which had its hub at the Northwest Ohio Intermodal Terminal in North  Baltimore.

The hub and spoke approach sought to build volume at low-volume origins and destinations. Nonetheless, CSX said its intermodal volume was up 1.5 percent for the first half of this year.

The traffic figures are reported by the railroads to the Association of American Railroads. BNSF was the biggest gainer, seeing traffic rise 5 percent.

Norfolk Southern led all carriers in intermodal traffic with an 8.2 percent gain for the first quarter and 7.9 percent for the first half of the year.

In the second quarter, NS led the industry in overall growth at 5.9 percent, edging out Canadian National’s 5.7 percent volume growth.

Some railroad industry observers said railroads have benefited from tight capacity in the trucking industry. Most of the gains in traffic posted by the railroads has been in intermodal.

Carload growth was strong in the second quarter, rising by 4.2 percent. It had been just 0.3 percent in the first quarter of this year.

Class 1 Employment Ticked up in May

June 20, 2018

Employment on U.S. Class I railroads in mid May was up 0.71 percent since April to 147,000, the U.S. Surface Transportation Board said this week.

However, when compared with May 2017, the number of employees was down 1.36 percent.

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

Categories that saw increases since mid-April were transportation (train and engine), up 1.15 percent to 61,593 employees; maintenance of equipment and stores, up 0.78 percent to 26,856; executives, officials and staff assistants, up 0.74 percent to 8,359 employees; maintenance of way and structures, up 0.39 percent to 32,770; and transportation (other than train and engine), up 0.32 percent to 5,584.

The professional and administrative category fell 0.63 percent to 11,838 employees.

Comparing 2018 with 2017, all categories but transportation (train and engine) showed declines.

This included professional and administrative, down 5.34 percent; executives, officials and staff assistants, down 4.41 percent; transportation (other than train and engine), down 4.14 percent; maintenance of way and structures, down 4.06 percent; and maintenance of equipment and stores, down 3.14 percent.

The transportation (train and engine) category increased 2.53 percent in mid-May compared with the same period a year ago.

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.”