Posts Tagged ‘U.S. Surface Transportation Board’

Coal Mines Complain About Shoddy Rail Service

September 27, 2022

Add coal shippers to the list of disgruntled railroad shippers.

The National Mining Association has written to the U.S. Surface Transportation Board to complain about erratic rail service being provided by CSX and Norfolk Southern.

The letter said some mines have curtailed production due to poor rail service that’s only getting worse even as demand for coal rises.

“While mines are running full speed ahead, the same cannot be said for rail, and our members desperately need relief,” the group said in the letter, which said empty coal hoppers are arriving hours or days late.

In some instances, mining companies have used third parties to handle the switching and loading of coal trains on their property.

The letter was based on results of a survey sent to the trade association’s members.

For their part, the two Class 1 railroads cited crew shortages that they said they are working to address.

Class 1 Employment Up in August

September 21, 2022

Employment in August at Class 1 railroads rose by 2.26 percent over the same level of August 2021.

Figures released by the U.S. Surface Transportation board showed the railroads employed 117,014 workers, which was a 0.52 percent increase from July’s employment level.

All but one out of six employment categories registered month-to-month increases.

They were transportation (train and engine), up 1.05 percent to 48,760 workers; transportation (other than train and engine), up 0.96 percent to 4,716; executives, officials and staff assistants, up 0.79 percent to 7,900; maintenance of equipment and stores, up 0.5 percent to 17,410; and maintenance of way and structures, up 0.07 percent to 28,437.

Seeing a decline was professional and administrative, which fell 1.15 percent to 9,791 employees.

On a year-over-year comparison, five of the six categories saw increases including executives, officials and staff assistants, up 8.65 percent; transportation (train and engine), up 3.5 percent; transportation (other than train and engine), up 1.22 percent; maintenance of equipment and stores, up 1.19 percent; and maintenance of way and structures, up 0.36 percent.

Comment Period Extended on CP-KCS Merger

September 7, 2022

The deadline to comment on the draft environmental analysis of the proposed merger of Canadian Pacific and Kansas City Southern has been extended to Oct. 14.

The U.S. Surface Transportation Board said on Tuesday it extended the deadline at the request of officials from “affected communities.”

The notice extending the comment period noted “no further extensions of time will be granted” after the October due date.”

A final environmental analysis will be issued after the comment period closes.

Comments on the draft analysis may be submitted electronically on the Board-sponsored project website or the Board’s website by clicking on the “E-FILING” link.

STB Says 5 Class 1 Railroads Revenue Adequate

September 7, 2022

Five Class 1 Railroads have been found by the U.S. Surface Transportation Board to have been revenue adequate for 2021.

The five are  BNSF, CSX, Norfolk Southern, Soo Line (the U.S. affiliate of Canadian Pacific) and Union Pacific.

This means regulators have determined that the railroads achieved a rate of return on net investment was equal to or greater than the agency’s calculation of the average cost of capital for the freight rail industry, which for 2021 is 10.37 percent.

By railroad the 2021 return on investment figures for U.S. Class 1 carriers were BNSF:13.19 percent; CSX: 15.51 percent; Grand Trunk Corp. (the U.S. affiliate of Canaadian Natiional): 7.79 percent; Kansas City Southern: 8.25 percent; Norfolk Southern: 13.18 percent: Soo Line: 13.51 percent; and Union Pacific: 17.03 percent.

Class 1 Employment Up in July

August 25, 2022

Class 1 railroad employment rose slightly in July the U.S. Surface Transportation Board reported this week.

The STB report said the 116,407 Class 1 employees in the United States as of mid-July was 0.13 percent higher than the number employed the previous month.

The July 2022 workforce was 0.64 percent higher than it was in July 2021 levels.

Three out of six employment categories posted month-to-month increases including executives, officials and staff assistants, up 0.97 percent to 7,838 employees; professional and administrative, up 0.47 percent to 9,905; and transportation (train and engine), up 0.36 percent to 48,252.

Seeing declines were maintenance of equipment and stores, down 0.33 percent to 17,324 employees; maintenance of way and structures, down 0.26 percent to 28,417; and transportation (other than train and engine), down 0.09 percent to 4,671.

On a year over year comparison executives, officials and staff assistants were up 7.06 percent while train and engine was up 1.59 percent.

Seeing decreases were professional and administrative, down 1.8 percent; transportation (other than train and engine), down 1.27 percent; maintenance of equipment and stores, down 1.11 percent; and maintenance of way and structures, down 0.34 percent.

STB Worried About Grain Shipment Disruptions

August 23, 2022

The U.S. Surface Transportation Board has expressed concern that Class I railroads will be unable to handle this year’s harvest season grain shipping demands.

Regulators sent a letter dated Aug. 18 to the top executives of the Class 1 carriers that also said it awaited their comments during an Aug. 25 meeting of the National Grain Car Council in Kansas City, Missouri.

“The board is particularly interested in your reports related to your preparedness to meet the demands of the fall harvest as it begins to ramp up in September and extends through the turn of the year,” the letter said in part.

“In light of current challenges affecting the four largest Class I railroads, the board is concerned about the Class I railroads’ ability to meet grain shipping needs and is highly focused on whether railroads will have sufficient crew, locomotive, equipment and capacity resources along key corridors supporting domestic and international markets.”

The letter also said regulators want to hear during the Kansas City meeting from shippers, short line and rail-car industry representatives about the matter.

STB Sets Cost of Capital at 10.37%

August 3, 2022

The cost of capital for railroads in 2021 has been calculated by the U.S. Surface Transportation Board to be 10.37 percent.

In a news release, the agency said that was the estimate of its Office of Economics of the average rate of return needed to persuade investors to provide capital to the industry.

In 2020, the cost of capital was 7.89 percent. It is a figure that is calculated annually as an aggregate measure and is “not intended to measure the desirability of any individual capital investment project.”

The STB said the cost of capital “is one component used in evaluating the adequacy of a railroad’s revenue each year . . . [and] may also be used in other regulatory proceedings, including (but not limited to) those involving the prescription of maximum reasonable rate levels, the proposed abandonment of rail lines, and the setting of compensation for use of another carrier’s lines.”

During 2021, the agency said the cost of railroad long-term debt was 2.63 percent (vs. 2.54 percent in 2020).

The cost of common equity was 12.03 percent (compared with 9.33 percent in 2020).

The cost of preferred equity was 0 percent (vs. 3.42 percent in 2020).

The capital structure mix of the railroads was 17.71 percent long-term debt (21.16 percent in 2020); 82.29 percent common equity (78.84 percent in 2020); and 0.00 percent preferred equity (0.00 percent for 2020).

Class 1 Employment Up in June

July 31, 2022

U.S. Class 1 railroads employed 116,251 in June, people, a 0.41 percent increase compared with May and a 0.28 percent over June 2021.

Figures released by the U.S. Surface Transportation Board showed four out of six employment categories posted gains this past June.

They included professional and administrative, up 3.31 percent to 9,859 employees; executives, officials and staff assistants, up 0.99 percent to 7,763; maintenance of way and structures, up 0.45 percent to 28,492; and transportation (train and engine), up 0.01 percent to 48,080.

Losing ground were transportation (other than train and engine), which fell 0.38 percent to 4,675 workers; and maintenance of equipment and stores, which dropped 0.14 percent to 17,382.

On a year over year comparison, executives, officials, and staff assistants, gained 5.73 percent; and transportation (train and engine), gained 1.34 percent.

Losses were posted by professional and administrative, down 2.29 percent; transportation (other train and engine), 1.6 percent; maintenance of equipment and stores, 1.57 percent;  and maintenance of way and structures, 0.53 percent.

STB Hearings Set for CP-KCS Merger

July 23, 2022

Three days of public hearings will be held in September by the U.S. Surface Transportation Board as it continues to review the proposed merger of Canadian Pacific and Kansas City Southern.

The hearings will be held at STB headquarters in Washington on Sept. 28, 29 and 30 and will be livestreamed online.

In a news release, regulators said the deadline to register to speak during the hearings will be Sept. 14. It also set an Oct. 14 deadline for submission of briefs in the case. After that date the STB will close the record on the merger.

By federal law regulators are required to issue a ruling in a merger proceeding within 90 days after the close of the record unless an environmental analysis has not been completed.

That would push the decision date for the merger to as late as mid-January with the decision becoming effective 30 days later.

CP-KCS Want Merger Without Conditions

July 15, 2022

Canadian Pacific and Kansas City Southern have asked the U.S. Surface Transportation Board to approve their merger without conditions.

The two recently filed a 4,300-document with the STB in which they sought to rebut requests for conditions being made by other railroads and interested parties.

CP-KCS content that their merger is compellingly in the public interest and should be approved without conditions “beyond those embodying the commitments Applicants are making.”

Those commitments, including some made to Amtrak, are detailed in the document.

CP-KCS noted that no shipper  or shipper association has suggested that the merger be denied.