Late Breaking Rail Industry News
| 8/20/01 |
ABC-NACO announced that it would resume operations at its facility in Sahagun, Mexico, on Aug. 20, following settlement of an 80-day labor dispute. The company said the agreement "provides for a modest wage increase in line with Mexican national averages and establishes new approaches for increasing both labor productivity and operating flexibility."
| 8/20/01 |
RailWorks unveiled its second-quarter results on Aug. 20, and the picture was not a rosy one. The company described a number of setbacks that contributed to a loss of $2.48 a share in the quarter. It cited accumulating debt problems that threaten the funding of ongoing operations. And it announced the resignation of two of its top officers and the appointment of "a senior financial crisis manager" as chief restructuring advisor.
Leaving the company are Chairman John G. Larkin and President and Chief Operating Officer Michael R. Azerela. Coming on as chief restructuring advisor is Shaun K. Donnellan, president of Glass & Associates, which RailWorks earlier retained to assist in devising a "recovery plan." Donnellan's responsibilities will include "improving cash management procedures, renegotiating credit facilities, and assisting John Kennedy in his duties as chief executive officer."
Chief factors in the company's first quarter loss were special charges totaling $33.7 million, or $2.19 a share. These included $12 million added to reserves for disputed change orders; $7.1 million in a reserve for doubtful accounts receivable; and $14 million for a loss associated with disposition of assets related to the construction business of the former RailWorks W. T. Byler subsidiary.
| 8/16/01 |
Kansas City Southern Railway and I&M Rail Link have formed a partnership to provide run-through carload service between Shreveport, La., and Davenport, Iowa, that saves 48 hours of transit time. The new service, called "rapid run-through," involves adding manifest traffic to existing grain trains and bypassing Kansas City, Mo. Upon arrival in Shreveport or Davenport, traffic makes a quick connection for delivery to final destinations south of Shreveport or north of Davenport. Northbound trains pick up traffic at DeQueen and Ashdown, Ark., before heading north, non-stop, to Davenport.
Rapid run-through is an add-on to an existing agreement between KCSR and I&MRL for co-marketing grain traffic and sharing Knoche Yard in Kansas City. "It ensures improved transit times and provides a more cost-efficient option for customers than over-the-road between the two markets," says KCSR Executive Vice President and Chief Operating Officer Gerald K. Davies.
| 8/16/01 |
Electrification of Caltrain is one of the rail projects proposed in a 25-year transportation plan for the nine-county Bay Area. The Metropolitan Transportation Commission unveiled the plan in mid-August and will be seeking public comments through September. The plan envisions the expenditure of $82 billion in federal, state, and local transportation funds, primarily to maintain 18,000 miles of streets and roads and to operate the region's public transportation system. About $7.7 billion in discretionary funding would be available for such projects as the Caltrain electrification.
| 8/16/01 |
A dozen bills directly affecting railroads await committee or floor action as Congress prepares to return to work Sept. 4 after its summer recess. A measure enthusiastically supported by both management and labor--the Railroad Retirement and Survivors Improvement Act--passed the House by a wide margin and has been introduced in the Senate with 71 co-sponsors. But it has been widely attacked as fiscally irresponsible and could be stalled by key legislators who prevented its passage last year. Other pending legislation would provide aid to smaller railroads to improve their infrastructure; phase out the 4.3 cent deficit reduction fuel tax; authorize Amtrak to issue $12 billion in bonds to build high speed rail corridors; and ease the way for transit agencies to gain access to the lines of freight railroads.
| 8/16/01 |
Burlington Northern and Santa Fe and Norfolk Southern are now offering coast-to-coast, third- and fourth-day premium intermodal trailer service designed to compete with team-driver truck transportation. The new service is for time-sensitive TOFC freight moving between Southern California and intermodal terminals at Rutherford, Pa., and Croxton, N.J. BNSF provides the line-haul service between Southern California and Chicago, while NS provides the line-haul service between Chicago and the East Coast. Eastbound service began Aug. 16 and runs Thursdays through Sundays. Westbound service began August 14 and runs Tuesdays through Saturdays. BNSF hands off the train to NS at NS's Ashland Avenue Yard in Chicago, eliminating cross-town drayage through Chicago. Transit time between coasts has been shaved 15 to 18 hours: L.A.-Rutherford services takes 75 hours; L.A.-Croxton service takes 84.
"This is another example of how BNSF and NS have partnered to provide customers with a cost-effective, intermodal solution that is truck-competitive," said BNSF Group Vice President-Consumer Products Business Unit Steve Branscum. Added NS Vice President-Intermodal Marketing Michael R. McClellan, "We are building on the successful seamless container services NS and BNSF launched earlier this year linking California to the Northeast and the Southeast. This is another step in the continuing evolution of interline products we plan to offer customers."
| 8/13/01 |
Trinity Industries and Thrall Car Manufacturing Company have entered into an agreement under which Thrall will merge its operations with Trinity's railcar manufacturing business in exchange for $165 million in cash and 7.5 million shares of Trinity stock. Trinity will make additional payments, not to exceed $45 million over five years, based on annual railcar production levels.
"The strategic combination of Trinity and Thrall's railcar businesses creates an ideal platform for providing customers with a full range of advanced railcar solutions," said Trinity President and CEO Timothy R. Wallace. "In the past, we have been very successful making strategic investments like this which generate benefits in the long term."
Current Thrall Chairman Craig J. Duchossois, who will join the Trinity Industries Board of Directors, said, "We're extraordinarily pleased about the merger and the opportunities it creates to capitalize on the talents of the newly combined team."
The combined railcar manufacturing operation will be led by a mixed group of senior officers from Trinity and Thrall, with current Thrall Vice Chairman Michael E. Flannery serving as CEO of the combined railcar enterprise. Subject to regulatory approvals, the transaction is expected to close by the end of the year.
| 8/9/01 |
A High Court has upheld the right of the British government to proceed with a plan to partially privatize the London Underground system. Overriding the objections of London Mayor Ken Livingstone and London Transport Commissioner Robert Kiley, the court held that Prime Minister Tony Blair's government could pursue its plan to turn over the Underground's infrastructure to private companies while keeping operations in the public sector. By the end of this year, the government plans to award 30-year concessions to three private groups which are expected to invest $18 billion in infrastructure improvements during the next 15 years. Kiley, who is widely credited with having revived the sagging public transportation systems of New York and Boston, has opposed the plan. He has warned that it could create some of the chaos that resulted from separating infrastructure and operations in the privatization of the British Rail system.
| 8/9/01 |
Kansas City voters on Aug. 7 rejected a proposed 0.5% sales tax increase to help pay for a 23.8-mile, $793 million light rail system. About 60% of the 66,000 votes cast were nay votes. Opposition to the plan by the pro-highway Greater Kansas City Chamber of Commerce is said to have been a major factor in LRT's loss at the polls. LRT advocates, led by Mayor Kay Barnes, immediately raised the possibility of going back to the polls with a better-funded campaign to win public support, possibly as early as next year. Mayor Barnes was quoted as saying that toward the end of this year's campaign, she sensed a swing toward light rail, suggesting that "this issue could have a life after this election."
| 8/8/2001 |
The U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) has confirmed what the rail industry already knows: the number of rail accidents and incidents is falling. As of April 2001, it fell more than 6% from the same time last year, the lowest it has been in ten years. The BTS's monthly Transportation Indicators report also showed that highway-rail fatalities decreased by more than 12%, while rail fatalities increased by slightly more than 1% over that same period.
| 8/8/2001 |
ABC-NACO announced Aug. 7 that it hopes to formalize within 60 days a joint venture with Zhuzhou Rolling Stock Works in Hunan Province to produce and sell Swing Motion® suspension systems in China. Prior to the beginning of production during the next year, ABC-NACO will supply up to 1,000 carsets of Swing Motion systems to China, with an initial order for 300 to be delivered in October. ABC-NACO is also producing wheels in China in a joint venture with Fatong Locomotive Works in Shanxi Province. "In a little over two years, the joint venture has about 50% of the total freight car wheel market," said ABC-NACO President and CEO Vaughn Makary. "We believe the Chinese market has significant potential for our advanced technology products."
| 8/8/2001 |
ABC-NACO says the weakest freight car market in 10 years helped drive net sales from continuing operations down to $97.4 million in this year's second quarter, a 27.5% decline from the corresponding period last year. The company reported a net loss of $24.5 million, including $9.2 million in restructuring costs, for this year's quarter, compared with a profit of $0.2 million in the 2000 quarter. Contributing to the decline in profitability were lower selling prices, due to competitive pressures and product mix, and the cost of maintaining idled facilities.
In announcing second-quarter results, ABC-NACO President and CEO Vaughn Makary commented, "Recently, we have completed a significant financial restructuring, reduced debt by $31.0 million, closed, idled, or sold 11 facilities, and reduced over 30% of our salaried employees. Unfortunately, ABC-NACO has been suffering from the same severe market downturn as many of our customers and other suppliers in the rail industry."
Makary also said: "Rail supply is a cyclical industry and it can turn upward as rapidly as it has slid into today's depressed conditions. . . . We believe our people, products, services, technology, and manufacturing processes are unsurpassed, and there is a significant long-term value in our businesses."
| 8/6/2001 |
Wisconsin Central Transportation Corp.'s second-quarter 2001 North American operating revenues of $93.7 million were a second-quarter record, topping last year's revenues of $93.0 million, despite a drop in carloadings. North American operating income for the second quarter was $25.9 million, compared to $24.2 million in the year-ago quarter. Operating expenses dropped to $67.8 million from last year's $68.8 million, largely due to a $1.2 million reduction in material costs. The operating ratio of 72.4% was an improvement of 1.5 percentage points over the year-ago quarter.
"Revenues were up because of a favorable shift in commodity mix as well as growth in our haulage business," said WCTC President and Chief Executive Officer-North American Operations Reilly McCarren. "Despite our most challenging economic climate in our 13 years, we improved operating income with an intense focus on efficiency and cost containment. By quickly adapting train operations to shifts in traffic flows, we offset higher diesel prices through conservation of fuel and other resources. Revenue weakness we saw in June has continued into the third quarter. As a consequence, we remain cautious in our outlook and have intensified our cost containment efforts."
WCTC's international operations, English Welsh & Scottish Railway and Tranz Rail Holdings Ltd., yielded second-quarter net income of $2.7 million, compared to a loss of $3.4 million in the year-ago quarter, including special items.
Combined North American and international net income for the second quarter was $15.5 million ($.33 per diluted common share), compared to second-quarter 2000 net income of $7.8 million ($.16 per diluted common share), including special items. For the six-month period ended June 30, 2001, WCTC net income was $27.1 million ($.58 per diluted common share) vs. $20.4 million ($.40 per diluted common share), including special items. The operating ratio of 77.1% remained the same.
| 8/6/2001 |
Burlington Northern and Santa Fe and CSX Transportation have instituted new run-through service for interline carloads by bypassing the Chicago gateway, a move they say will eliminate handling and improve transit time and service consistency. As many as 30,000 carloads a year will be affected.
BNSF traffic destined for New York and New England previously interchanged in Chicago will now be directly delivered to CSXT, rather than turned over to a local switching railroad for delivery. BNSF traffic destined for the mid-Atlantic markets of Baltimore, Philadelphia, and Portsmouth, Va.--also previously switched in Chicago--will now be assembled by BNSF at its Galesburg, Ill. facility, 155 miles southwest of Chicago. The change will result in a transit time reduction of one to two days.
Westbound traffic for BNSF will now be assembled by CSXT in Willard, Ohio, and moved directly to Galesburg and Kansas City, eliminating intermediate handling in Chicago. The move will save a minimum of 24 hours transit time.
"The new services are the result of cooperative research between the companies' service design groups to create more direct and simplified service to interline customers," said CSXT Executive Vice President-Sales and Marketing Mike Giftos. "In all cases, customers will see more consistent service, and that's critical to growing our business and providing more truck-like service."
"This strategic initiative provides our carload customers with a very competitive service offering between the BNSF network and points in the Northeast accessible to CSXT through the Chicago gateway," said BNSF Vice President-Network Development Pete Rickershauser. "Customers will benefit from equipment turning more efficiently and their products reaching their destination faster."
| 8/1/2001 |
Trinity Industries, Inc. continues to wait out the slumping railcar market by focusing on its other businesses, such as its construction products segment and inland barges, which have shown consistent improvement. According to Chairman, President, and CEO Timothy R. Wallace, the company has taken steps to stabilize business over the last several months while monitoring the industry's demand for railcars. "We are continuing to reduce our overhead costs as our rail production decreases," said Wallace. "We believe, long-term, this industry will return to more normal demand levels, and we are positioned to respond quickly." Trinity reported first quarter net income of 9.6 million, or 26 cents a diluted share, on revenue of $476.6 million, compared to $20.9 million, or 55 cents a diluted chare, on revenues of $533.7 million in the first quarter of the prior fiscal year.
| 8/1/2001 |
Union Pacific Railroad announced that it has been selected by General Motors Corp. as its lead rail transportation provider in the western U.S., effectively handling all of GM¹s finished vehicle traffic in the West. UP had transported 75% of GM's western traffic, and will now handle more than 2.5 million vehicles annually with 100% of GM's business. Under the multi-year agreement, UP will build or expand seven vehicle distribution facilities, make other facility improvements to permit around-the-clock vehicle unloading at all facilities, and install a new, state-of-the-art vehicle management system at each location.
UP also announced that it has teamed up with DaimlerChrysler Corporation and formed a new logistics company to track up to three million Chrysler Group vehicle shipments annually. The new company is called Insight Network Logistics, and is a wholly-owned subsidiary of Union Pacific Corp.
| 8/1/2001 |
Arkansas & Missouri Railroad President Larry P. Bouchet and Vice PresidentMarketing Mark Bonnell announced new joint marketing agreements with the Burlington Northern and Santa Fe, Union Pacific, and Kansas City Southern railroads that will "result in better and more efficient service for our key customers," said Bonnell. At the same time, a new division of the company was announced which will concentrate on "leasing/rail siding activities to grow our transportation business," according to Bouchet. The new division will develop various business opportunities using A&M's current assets and property ownings.
A&M also welcomed three new transportation customers on its rail systemRoll-Off Service, Inc, EPCO, and GSIexpanding on its current list of 130.
| 8/1/2001 |
The railroad industry cleared one hurdle to reforming Railroad Retirement with the passing of a bill in the House of Representatives that will allow pension fund assets to be invested in private securities instead of lower-yielding government bonds. The bill, H.R. 1140, also allows for retirement without reduced benefits at age 60 for employees with 30 years experience, and more benefits for surviving spouses.
Union Pacific Corporation Chairman and CEO Dick Davidson called it "a great day for railroad employees across the country," and said UP employees "are anxious to have this legislation signed into law by President Bush so it can take effect on January 1, 2002."
"The legislation allows the fund to be investedfor the first timein a diversified portfolio, bringing the railroad retirement system into the 21st century," said AAR President and CEO Edward R. Hamberger. "We look forward to working with the leadership of the Senate in the upcoming weeks to pass this important legislation."
Similar legislation, after passing in the House, was stalled in the Senate last year, but optimistic supporters have lined up 72 co-sponsors in the Senate for this bill¹s run in hopes of getting it passed on as a law.
| 7/26/01 |
Reduced operating income from both its domestic and Mexican operations caused Kansas City Southern Industries to post second quarter earnings that were down sharply from earnings in the same quarter a year ago--$4.7 million vs. $8.8 million, a 47% decline. At eight cents per diluted share, the earnings were in line with analysts' expectations. The general economic slowdown, plus reduced grain traffic due to flooding, contributed to the decline in domestic income. Earnings from KCSI's equity in Mexico's Grupo TFM were affected by higher operating expenses, which more than offset an increase in revenues. The KCSR/Gateway Western operating ratio for the second quarter was 88.1%, compared with 84.9% for the second quarter of 2000. Grupo TFM's operating ratio in this year's quarter was 74.6%, compared with 67.7% a year ago.
| 7/26/01 |
General Electric Transportation Systems (GETS) expects to complete the purchase of certain assets of Wabtec Corp. by Oct. 1. A cash price of $240 million, primarily for Wabtec's locomotive aftermarkets products and services, is stipulated in a definitive agreement announced July 26. GETS is purchasing Wabtec assets acquired as part of the MotivePower Industries merger in November 1999. They include Motor Coils Manufacturing, Wabtec Engine Systems, Wabtec Distribution, and MPI de Mexico. Wabtec will continue to own former MotivePower business units that are OEMs for heat exchangers, electronic components, brake rigging, and sanitation systems, as well as its locomotive plant in Boise, Idaho. Wabtec expects to use most of the proceeds from the sale to reduce debt to under $250 million, compared to a high of $572 million two years ago.
| 7/26/01 |
Rail World, Inc., the Chicago-based rail management and investment corporation headed by former Wisconsin Central Transportation Corp. chief Edward A. Burkhardt, is leading a consortium negotiating purchase of the rail properties of the Bangor & Aroostook Railroad System from Iron Road Railways, a Washington, D.C.-based holding company. The B&A system includes the Bangor & Aroostook Railroad, the Canadian American Railroad, the Quebec Southern Railroad, the Northern Vermont Railroad, and Logistics Management Systems.
Rail World's partner in the deal is Wheeling Corp., which, among other properties, owns 680-mile regional Wheeling & Lake Erie. Wheeling Corp. Chairman and CEO Larry R. Parsons, W&LE Chief Engineer Joseph J. Gonzales, and Jerry R. Davis, former President of Union Pacific and Southern Pacific, are independent investors.
B&A President and CEO and Iron Road Director Frederic W. Yocum, Jr., says talks with the consortium are aimed at addressing cash flow problems and the heavy debt load that has plagued the B&A in recent years. Burkhardt says the consortium is currently working on a business plan, and will meet with B&A creditors soon "to discuss our thinking and ask for their input." He also says the proposed purchase will be discussed shortly with key shippers and connecting railroads.
Though no firm date has been set for completion of the transaction, Burkhardt indicated it would occur within the next few months. "We have received full cooperation so far from everyone involved," he says. No preliminary purchase price was disclosed.
| 7/25/01 |
Lower costs and selectively higher rates helped North American railroads turn in a relatively strong performance as the national economy continued to weaken in the second quarter. A surge in coal traffic helped many carriers.
Union Pacific posted corporate net income of $243 million for the quarter, compared to $244 million for the same period last year. Railroad commodity revenue increased to $2.6 billion as average revenue per car rose by 2%. Energy-related revenues rose 18% and agricultural revenues were up 3%. On the downside, a 10% increase in fuel prices plus the costs of floods in Houston and the upper Midwest drove the operating ratio up 1.9 percentage points to 83.2%.
Burlington Northern Santa Fe Corp. reported freight revenues of $2.24 billion for the second quarter, about even with last year. Flooding conditions and rising fuel costs also affected BNSF, and operating income fell by $55 million to $428 million. This pushed the operating ratio to 80.9%, compared to 78.4% in the year-ago quarter.
Norfolk Southern stayed firmly on a turnaround course, shaving its operating ratio to 82.3% from the 82.5% recorded in the second quarter of last year. Net income in this year's quarter rose to $107 million from $99 million in the year-ago period (excluding a one-time gain of $17 million in the 2000 quarter from the sale of certain non-rail assets). Operating revenues this year were $1.59 billion, about even with the 2000 quarter, despite a 4% decrease in carloads. Chairman, President, and CEO David R. Goode found the company's progress encouraging "in light of the economic downturn that is proving to be longer and deeper than we anticipated."
A strong report also came from CSX Corp., which said it expected second quarter earnings from continuing operations to be around $118 million, up 125% from the $48 million the company earned in the year-ago quarter. Corporate Chairman and CEO John W. Snow said CSX Transportation performed well during the quarter; strength in coal coupled with rate increases in selected markets largely offset declines in other commodity groups. CSX planned to issue a more detailed report around Aug. 1.
Canadian National continued to be a star performer, improving its operating ratio in the second quarter by half a point to 68.1%. CN reported a 4% increase in revenues, to $1.4 billion (C), with five of its seven business units posting gains. Second quarter net income was $240 million, excluding non-recurring items, compared to $230 million in the 2000 quarter. Non-recurring charges included the costs of a workforce reduction program that is cutting 690 positions and is now 50% complete.
Canadian Pacific reported second quarter operating income of $206 million (C), up slightly from last year's record quarter. CP's operating ratio of 77.9% was up half a percentage point from last year. Second quarter revenues rose 3% to $931 million this year.
| 7/25/01 |
Trains began moving through CSX Transportation's Howard Street Tunnel in Baltimore late on July 24, six days after a 60-car train derailed in the century-old structure and set off a fire that persisted for more than four days.
What caused the derailment was not immediately clear. In its announcement of the tunnel reopening, CSXT did not comment on reports that the National Transportation Safety Board was questioning whether water from a broken pipeline had flowed into the tunnel and weakened the trackbed. Earlier reports blamed the train wreck for the pipeline break.
The accident caused major disruptions in Baltimore, including road closings, business shutdowns, and the cancellation of three Baltimore Oriole games.
If there was a bright side to a story that captured media attention around the world--including a front page picture in The New York Times showing flames spurting from the tunnel--it was a dramatic demonstration of the railroads' ability to handle hazardous materials safely. While several cars in the train carried hazmat loads, CSXT noted with satisfaction that the Maryland Department of the Environment had established that "no chemicals were emitted to the air at levels that would pose a hazard to public health."
CSXT President Michael J. Ward expressed appreciation to Baltimore city officials, the Baltimore Fire Department, and emergency response personnel whose efforts, he said, "safeguarded Baltimore and the surrounding environment."
| 7/23/01 |
After nearly four years of on-again, off-again merger talks peppered by a fair amount of hostility, the two largest unions representing train and engine service employees--the United Transportation Union (UTU) and the Brotherhood of Locomotive Engineers (BLE)--have reached agreement on a merger. The merger, which is subject to ratification by the rank and file, would take effect Jan. 1, 2002.
The merged union would be named the United Transportation Union-Brotherhood of Locomotive Engineers (UTU-BLE), and the logos of both would be retained. If approved, UTU-BLE would have approximately 185,000 members, and would be the bargaining representative for all unionized rail operating employees in the U.S. and Canada, yardmasters, Canadian rail traffic controllers, and thousands of other railroad, bus, air, and mass transit workers in both countries.
Stressing that individual craft autonomy would be retained in the merged union, UTU International President Byron A. Boyd, Jr., and BLE International President Edward Dubroski said in a joint statement, "It's time for the members of both unions to decide on the question of merger. We are asking our members to approve the creation of the largest combined rail, bus, and air union in North America. It joins the best of the proud, historic, and democratic principles embodied in both the UTU and the BLE, and has as its goal the protection and advancement of each of the autonomous crafts in which our members work."
The two union presidents said UTU-BLE "would produce substantial financial savings by ending hostilities that have distracted both of us from doing what we are paid to do--represent our members' interests with railroads and other transportation companies--by providing for streamlined operations. Most important, the new union would vastly enhance our power and influence at the bargaining table, in state legislatures and provincial parliaments, and in the halls of national legislatures in Washington and Ottawa."
| 7/23/01 |
Burlington Northern and Santa Fe Railway is offering guaranteed availability and placement of refrigerated boxcars through its Loading Origin Guarantees (LOGS) program, an online auction that allows customers to secure in advance refrigerated boxcar capacity for 4-, 5-, 13- or 26-week periods. BNSF says it will guarantee the availability and placement of empty railroad-owned or controlled refrigerated boxcars for the scheduled shipping period or make a default payment.
Initially, about 50% of BNSF's refrigerated loading capacity will be placed in the LOGS program, "ensuring that large and small shippers have an equal opportunity to secure equipment," says BNSF Assistant Vice President-Perishables Marketing Dave Fleenor. "It also allows us to improve equipment utilization."
The first auction for refrigerated equipment will be July 30, for shipments beginning the week of Aug. 27. Shippers can obtain more information at BNSF's website at www.bnsf.com/vicc/markets/perishables/carload.html.
BNSF introduced the LOGS program in January 2000 for centerbeam flat cars. LOGS has since been expanded to include plain boxcars and refrigerated boxcars.
| 7/23/01 |
The first week of July saw a continuing decline in railroad carload traffic, but intermodal volume rose for the first time in four months: 140,940 trailers and containers were handled in the week ended July 7, up 3.5% from the same week in 2000. It was the first increase since the week ended March 10.
Nationwide, carload traffic dropped 4.9%. The steepest decline, 11.1%, was in the East. In the West, carloads were down only 0.6%, thanks partly to a surge in grain movements. Measured in ton-miles, volume for the week ended July 7 was down 2.1% from last year.
In this year's first 27 weeks, carloads were down 1.1% from year-ago levels, intermodal was down 2.8%, and revenue ton-miles were up 0.4%.
| 7/19/01 |
Wabtec President and CEO Gregory T. H. Davies believes "it's prudent to assume that next year will remain challenging for freight rail supply companies." He made this comment on July 18 as Wabtec announced a $13 million drop in Freight Group sales during this year's second quarter and a $5 million increase in Transit Group sales. Excluding restructuring costs, the company reported earnings per diluted share of 26 cents this year vs. 27 cents in the year-ago quarter. Wabtec had 5,755 employees on June 30, reflecting a cut of 240 jobs in the second quarter and 500 since the beginning of the year.
| 7/19/01 |
Robert J. Kiley, the former New York City MTA chief who helped revitalize New York City's subways, is having a difficult time trying to do the same for London's underground system. Appointed chairman of London Transport on May 8, he was fired from that position by the Blair government on July 17 for continuing to oppose a plan to privatize London's infrastructure while leaving operations in the public sector. Kiley retains his position as Transport Commissioner for London under the city's mayor, Ken Livingstone, who also opposes the partial-privatization scheme. Kiley was quoted as saying his firing was "a transparent attempt to silence me and create a smoke screen" as he prepared to reveal damaging information about the underground system's condition. He said he would ask a court to halt the privatization plan.
| 7/17/01 |
The Paris-based International Transport Union (UIC) estimates that on a worldwide basis rail freight volume rose 1.8% in 2000 and passenger ridership was up 0.8%. In Europe, passenger traffic grew 2.3%, with ridershp on high speed trains up 11%. Freight traffic increased 7%, with international movements posting 12.5% growth. Intermodal freight transport rose 8%. All percentages are expressed in freight-kilometers and passenger-kilometers.
In its annual report, UIC also said that "rail cooperation on the international scale gathered momentum" in 2000 under the leadership of the UIC World Executive Council, chaired by Masatake Matsuda of East Japan Railways, with Charles Dettman of the Association of American Railroads as vice-chairman. Among the program's goals are joint research prxograms, including the launch of a project on optimizing wheel/rail interaction, and exchanges between railway research centers on five continents.
| 7/17/01 |
All modes of rail transit continued to post gains in this year's first quarter, reports the American Public Transportation Association. Light rail ridership was up 6.4%; heavy rail, 5.5%, and commuter rail, 4.3%.
Light rail's top performers were Portland, Ore., 7.5%: Boston, 7.5%; NJ Transit, 7.4%; and Baltimore, 6.1%.
Heavy rail systems reporting increases included the Washington Metro, 10.3%; MTA New York City Transit, 5.5%; and New Jersey's PATH, 6.2%. A major extension helped push Los Angeles Metro ridership up 95%.
Service expansion was also largely responsible for the 101% increase reported by the Dallas-Ft. Worth Trinity Railway Express. San Jose's Altamont Commuter Express reported a 70% increase in ridership, and Virginia Railway Express, 17.6%.
| 7/13/01 |
In a weak economy, Wabtec continues to show some strength. The company reduced its debt by about $35 million in the second quarter, and has doubled its debt reduction target for 2001 to $100 million. When it announces second quarter results July 18, Wabtec expects to report per-share earnings, excluding restructuring, of about 20 cents, compared to 27 cents in the year-ago quarter. Earnings "guidance" for the year is being reduced to 75-85 cents a share from $1.04. "Despite very difficult market conditions, we are profitable and are generating strong free cash flow," said President and CEO Gregory T. H. Davies.
It's difficult to predict when conditions will turn around, said Wabtec Chairman William E. Kassling. "Our freight railroad customers are continuing to defer aftermarket spending, in part to offset higher fuel costs; and the freight car and locomotive builders are cutting production further due to reduced demand for new rolling stock," he said. "We are, however, encouraged by the railroads' efforts to form joint marketing agreements as a means to increase traffic and market share, and we believe Wabtec offers many products and services that can help."
| 7/12/01 |
Trespassing deaths on railroad property rose to 142 in this year's first four months, up 26% from the 113 fatalities reported in the same period last year, according to the Federal Railroad Administration.
Highway-rail grade crossing incidents caused 140 deaths in the January-April period this year, compared with 142 a year ago. According to the FRA, trespassing and grade crossing incidents together account for around 95% of all rail-related fatalities.
The FRA's four-month report shows that there were 967 train accidents this year--64 collisions, 743 derailments, and 160 attributed to other causes. In the comparable period last year, there were 992 train accidents--78 collisions, 692 derailments, and 222 from other causes. The train accident rate in both years was 4.11 per million train miles.
| 7/12/01 |
Canadian National announced July 10 that the Government of Canada's Competition Bureau has cleared CN's proposed acquisition of the Wisconsin Central Transportation Corp. The Surface Transportation Board is expected to issue its decision by Sept. 7, provided no environmental assessment is required and there is no oral argument.
| 7/12/01 |
The Greenbrier Companies, Inc., had a manufacturing backlog of 4,600 freight cars valued at $230 million at the end of its fiscal third quarter on May 31. Three months earlier, the backlog was 4,300 units valued at $260 million. A spokesman said a difference in the mix of cars was mainly responsible for the lower per-unit value of the May 31 backlog, though pricing pressures were also at work.
On third-quarter revenues of $148 million this year, Greenbrier reported a net loss of $1.3 million. This included unusual charges of $1.2 million, or $.08 a share, related to work force reductions and production slowdowns. The near-break-even results were in line with revised expectations. In the same quarter a year ago, Greenbrier earned $4.2 million, or $.30 a share, on revenues of $172 million.
As it announced its third-quarter results on July 10, Greenbrier also announced a quarterly cash dividend of $.09 a share.
The company said it "continues to evaluate certain of its rail investments," which could result in additional unusual charges in the current fiscal year. Greenbrier has operations in the U.S., Canada, Mexico, and Europe.
| 7/12/01 |
CSX Corp. announced July 11 that second quarter earnings from continuing operations will be approximately $118 million, up 125% from the $48 million the company earned in the year-ago quarter. At the same time, Chairman and CEO John W. Snow said the company is cutting its quarterly dividend to 10 cents a share from the 30 cents it has paid since the fourth quarter of 1997. Snow said this action by the board "brings CSX generally in line with the rest of the railroad industry. We believe that more financial flexibility is in the best interests of our shareholders and will increase the company's value over the long term." The dividend is payable Sept. 14 to shareholders of record as of Aug. 24.
Snow said CSX Transportation performed well during the quarter. Strength in coal coupled with rate increases in selected markets largely offset declines in other commodity groups. "The railroad management team is doing a terrific job operating a fluid, high performing network and taking out costs," said Snow. "Rail operating income is up sharply as locomotives, cars, and crews are being utilized much more efficiently."
CSX will officially report its second quarter earnings on July 31.
| 7/10/01 |
European operators have announced nearly $1 billion worth of orders for passenger railcars. The Paris Transport Authority (RATP) awarded a $584 million contract for 805 metro cars to a consortium led by Alstom and Bombardier Transportation. The steel-wheeled cars will replace 40% of RATP's current fleet starting in 2005.
French National Railways (SNCF) is buying 100 new TER regional express electric railcars for $118 million from Alstom. SNCF also exercised an option with Alstom for 12 double-deck emus worth $70 million for the Paris region's RER system.
Swiss Railways placed a $120 million order with Bombardier and Alstom for 10 intercity tilting trains.
Bombardier received a $76 million order to overhaul and modernize 60 three-car trainsets for the Netherlands Railways.
| 7/9/01 |
The Association of American Railroads estimates that total freight volume for U.S. railroads in this year's first half was 727.3 billion ton-miles, up 0.5% from last year. Measured in carloads, traffic this year was down 0.9%. While most commodity traffic trailed 2000 levels, coal loadings were up 7.7%, accounting for the increase in ton-miles.
Intermodal volume in this year's first half ran 3% below last year's levels, reversing a trend of many years when trailer/container traffic was the pace-setter.
The decline worsened slightly toward the end of the half, with carload traffic down 1.1% and intermodal traffic down 3.2% in June this year compared with June a year ago.
"Clearly, the economy remains stuck in low gear," commented AAR Vice President Craig F. Rockey, though he said there were some indicaations that the national economic downturn may have "troughed."
| 7/9/01 |
Short line and regional railroad operator RailAmerica, Inc., looking to reduce debt through "asset rationalizations, sale/leasbacks, and equity infusions," has completed $4.8 million in locomotive sale/leaseback transactions, adding to $22.2 million in similar transactions completed in December 2000. The transactions complete the North American portion of RailAmerica's sale/leasback program. Chairman, President, and CEO Gary O. Marino says RailAmerica's projected 2001 lease payments are 3.2% of projected revenue, "nearly 20% below the industry average of 3.9%." The company, he says, has reduced long-term debt by $50 million, and is "on target to achieve a debt-to-equity ration of less than 2:1 by year-end 2001."
| 7/9/01 |
Norfolk Southern has opened a new intermodal terminal in Maple Heights, Ohio, near Cleveland. The $11 million, 70-acre facility, which replaces an NS intermodal terminal in downtown Cleveland, is used by northern Ohio shippers moving goods between Cleveland and the East Coast. NS calls it "the capstone terminal" in a conventional Midwest terminal network that also includes Pittsburgh, Toledo, Detroit, Columbus, Cincinnati, Lexington, and Louisville. Built on an existing railyard, the terminal is accessible from Interstates 480 and 271.
| 7/9/01 |
Union Pacific's new, $20 million distribution hub for DaimlerChrysler vehicles in Centreville, Ill., (southeast of St. Louis) is open for business. The 95-acre facility, part of an agreement UP forged with DaimlerChrysler in February 2000, includes staging capacity for 5,000 vehicles, four 2,400-foot loading/unloading tracks that accommodate 80 railcars, nine 3,000-foot tracks for up to 200 Thrall Car-built Q2 multi-level railcars, security lighting and fencing, and a 7,000-square-foot administration building. New vehicles are trucked to Centreville from DaimlerChrysler's Fenton, Mo., assembly plant, and shipped over UP to distribution centers in the U.S., Canada, and Mexico. The facility also handles DaimlerChrysler and Mazda vehicles shipped by rail for distribution at St. Louis area dealerships.
| 7/9/01 |
Burlington Northern and Santa Fe has posted ramp-to-ramp rates for intermodal service in more than 200 of its lanes on its website at http://bnsf.railprices.com. The rates, said BNSF, are the only domestic and full truckload rates it offers in these lanes. In addition, BNSF has eliminated minimum revenue commitments associated with these rates. "Shippers who can organize drayage and agree to terms outlined in BNSF's Intermodal Service User Agreement now have direct access to BNSF," the railroad said in a statement released July 9.
| 7/9/01 |
Simmons Machine Tool Corp., which manufactures equipment used in the maintenance of locomotive, freight car, and transit car wheelsets, has entered into an agreement with Arkansas Industrial Computing, Inc., to incorporate AIC's computerized Wheel Press Recording and Wheel Shop Management systems into Simmons' wheel press machines. The Wheel Shop Management System utilizes state-of-the-art data collection hardware--a combination of industrial computers, hand-held barcode scanners, and wireless barcode scanners--in conjunction with proprietary software to simplify data collection and speed production. AIC's Wheel Press Recording System generates mounting diagrams and provides information that simplifies data retrieval, reporting, inspection, and supervisory functions.
| 7/9/01 |
Burlington Northern and Santa Fe has launched Mexi-Modal, a new intermodal service "that creates a seamless and easy to use transportation network connecting major markets in Mexico, the U.S., and Canada." BNSF coordinates the entire transborder shipping process, door-to-door, through cooperation with Canadian National, TFM, and several Mexican trucking companies. Through the Mexi-Modal internet site (bnsf.com/productofferings), customers can check door-to-door rates for service in various lanes. By calling a BNSF customer service representative in the U.S., they can book loads and arrange for movement of freight.
Mexi-Modal consists of three service products:
1) MidBridge, which allows freight to be moved by rail in the U.S. and Canada and then by truck in Mexico by facilitating the purchase of products to occur at the "middle of the bridge" (the International Rail Bridge) between Laredo, Tex., and Nuevo Laredo, Mexico. This product, says BNSF, "mirrors how most transborder truck transportation is conducted today."
2) Laredo, which allows a customer to move full truckload freight from the U.S. or Canada by rail either to or from a designated warehouse in Laredo, Tex., enabling customers to store freight in Laredo for warehousing.
3) MexiStack, an all-rail product that allows the purchase of goods to occur at the U.S., Canadian, or Mexican origin or destination. North of the border, the customer's freight is moved by BNSF or CN; in Mexico, by TFM.
| 7/3/01 |
Sumitomo Corp. of America has acquired GeoFocus, a supplier of wireless GIS (geographic information systems) and GPS (global positioning system) technologies to the transportation industry, from Williams Controls, Inc. Former Federal Railroad Administrator Jolene M. Molitoris is president and CEO of GeoFocus LLC, as the company is now called. GeoFocus' TrainTrac TIMS (Train Information Management System), which provides train location, performance-to-schedule, and automated messaging and report generation, is in use on Florida's Tri-Rail (where it was developed), Metra (Chicago), Metrolink (Los Angeles), MBTA (Boston), and TRAX light rail (Utah). The company is based in Deerfield Beach, Fla.
| 7/3/01 |
In February, Burlington Northern and Santa Fe entered into an agreement with Dow Chemical Company to provide Dow with competitive rail service to a petrochemicals plant in Seadrift, Tex., (located about 120 miles southwest of Houston) by constructing a seven-mile rail line from Kamey, Tex., to Seadrift. The Surface Transportation Board has approved BNSF's plan; environmental review is pending. Construction should begin in the first quarter of 2002 and be completed in 2003. The new line will tie into BNSF's network by way of trackage rights over Union Pacific between Placedo, Tex., and Kamey. Currently, Dow's Seadrift operations is served only by UP.
| 7/3/01 |
Two of Amtrak's harshest critics in Congress--Republican Senators John McCain of Arizona and Phil Gramm of Texas--say they were surprised and disturbed when Amtrak mortgaged part of Penn Station in New York to raise $300 million. "Apparently, Amtrak's financial condition is so severe that without an emergency infusion of cash provided by this deal, it would face immediate bankruptcy," they told Transportation Secretary Norman Mineta in a letter June 22. They found the situation "especially troubling considering that Amtrak continues to boast it is on a glidepath to 'operational self-sufficiency.' Clearly, Amtrak has been dishonest to Congress and the American public regarding its true financial condition."
Amtrak President George Warrington took up the challenge at a Senate appropriations subcommittee hearing on June 28. He said he saw no chance that Amtrak could go bankrupt by the end of next year if it received its planned $521 million appropriation, though he acknowledged that unforeseen circumstances could change that. Warrington testified before a mostly-friendly subcommittee. Voters back home tend to like Amtrak; their representatives in Washington tend to want to get re-elected, and over the years it's been grass-roots support that has helped keep Congress in line and Amtrak in business.
| 7/3/01 |
CSX Corp. Chairman and CEO John W. Snow told a Senate subcommittee on June 28 that the Surface Transportation Board's new merger rules should encourage railroads "to develop and test ways to reap many of the benefits of consolidations without precipitously plunging down the merger track." Snow said he saw "little or no sentiment for additional major mergers among the rails themselves, from our customers, or from our investors." He suggested that the STB's tougher new rules may lead to a merger hiatus of perhaps five years.
In other testimony, Canadian National Chairman and CEO Paul Tellier said he knew of no current merger plans but "it is hard to forecast the future. We are keeping an open mind." It was the proposed merger of CN and Burlington Northern and Santa Fe, announced in December 1999, that caused STB to declare a 15-month moratorium on major rail consolidation activity while it re-examined the rules.
STB Chairman Linda Morgan told the Senate panel that "service is being discussed in a way it never has been before." Responding to shipper complaints that it was impossible to enforce STB's dictum that future mergers should enhance and not merely preserve competition, Morgan said the Board went "as far as it legally could go."
| 6/29/01 |
The U.S. House of Representatives has introduced its version of the High Speed Rail Investment Act, H.R. 2329. Primary sponsors are Reps. Houghton (R.-N.Y.) and Oberstar (D-Minn.). "We have had plenty of money for studies . . . but haven't had money to implement [them]," Oberstar said at a June 27 news conference announcing the bill. Also present was Amtrak President and CEO George Warrington, who said the measure "is not about Amtrak, nor about competing for resources with other modes of transportation, but about developing the third leg of an intermodal transportation stool." The Senate version of the bill, S.250, gives Amtrak authority to issue $12 billion in bonds over 10 years to help finance equipment purchases and upgrade rights-of-way and signaling systems for DOT-designated high speed rail corridors. It stalled in the Senate last year and was reintroduced earlier this year. Its most vocal opponent is Sen. John McCain (R.-Ariz.).
| 6/25/01 |
Gary O. Marino, president and CEO of RailAmerica, says the short line acquisition market "is better now than at any time in recent memory. . . . Between announced planned divestitures of rail lines from Class 1's and privately owned short lines that are on the market, we estimate that up to 15,000 track miles are available for acquisition. In the international arena, we believe there are around 20 privatization opportunities coming to market."
Marino made these observations at the annual meeting of RailAmerica shareholders in Boca Raton, Fla., June 22. While he said the company will meet or exceed its strategic growth goals in 2001, he also said that any future acquisitions must be "accretive to earnings and improve our leverage and debt coverage ratios."
RailAmerica, which claims to be the world's largest short line and regional railroad operator, owns 36 railroads operating 11,000 route-miles in the U.S., Canada, Australia, and Chile.
Marino told shareholders that 2000 was a record year for the company, and business has continued to rise in 2001 during an economic downtown. He said that in North America, RailAmerica's "same railroad" carloadings were up 4% through May while for the industry as a whole loadings were down 1.6%.
| 6/22/01 |
The Surface Transportation Board has conditionally granted Burlington Northern and Santa Fe approval to build a seven-mile line in Texas that would permit BNSF to tap traffic generated by a Union Carbide Corp. (UCC) industrial complex about 120 miles southwest of Houston. Final approval of the build-out is subject to environmental review. STB said the UCC complex, now served only by Union Pacific, ships several billion pounds of chemicals and plastics a year.
| 6/22/01 |
Partnering with CSX Intermodal, Burlington Northern and Santa Fe has introduced twice-weekly Ice Cold Express service between San Bernardino, Calif., and Little Ferry, N. J., serving the metropolitan New York-New Jersey market. The new service, providing fourth-evening delivery, cuts a day from previous rail transit times for temperature-controlled products. "With a service schedule to meet the demand for midnight deliveries, the Ice Cold Express is a highly competitive alternative to over-the-road transportation," said Steve Branscum, BNSF group vice president, Consumer Products Marketing. The Ice Cold Express uses unit trains of 53-foot Wabash National ReeferRailers(TM). It was introduced on a weekly basis between Southern California and Chicago in 1999 and expanded last October to Montreal and Toronto.
| 6/15/2001 |
AAR President and CEO Edward R. Hamberger, in a prepared statement, addressed the STB's new rail merger rules by saying "rail mergers should not be subject to a standard requiring enhancement of competition, but instead should remain subject to the test of whether a merger preserves competition -- the same test that applies to other industries under antitrust laws."
Hamberger pointed out that railroads carry 40% of the intercity freight moved throughout North America but receive only 10% of the revenues, indicating that "competition in the transportation industry is thriving."
| 6/14/2001 |
Effective July 1, Burlington Northern and Santa Fe will post expiration dates for current carload commodity rates on a new rate renewal calendar.
When BNSF's Industrial Products business unit realigned into two groups (sales and marketing) last March, "one of the main objectives of the move was to make it easier for customers to use BNSF's carload network," said BNSF Group Vice President-Industrial Products Dave Garin. Previously, rates were renewed "in a variety of ways based on different criteria. This created complicated procedures and timing disparities in the marketplace. The new process significantly simplifies our previous methods of renewing rates and will make rate renewals more logical and predictable for our customers."
The rate calendar, which is designed for BNSF Industrial Products customers, can be found at www.bnsf.com/vicc. BNSF says its goal is "to align all documents in a like commodity group for common-month expiration. It is not intended to infer only annual pricing actions nor any other pricing inference."
| 6/14/2001 |
Railcar financing and leasing company CIT Rail Resources has entered into what it calls an "unusual" $6.5 million agreement with first-time customer Virginia Electric & Power Company (VEPCO) for a full-service lease of 400 aluminum rapid discharge coal cars, built by Johnstown America.
As part of this arrangement, CIT funded an extension of the track coal hopper at VEPCO's Bremo Power Station at Bremo Bluff, Va. The extension accommodates the new, 286,000-pound-capacity coal cars, which are several feet longer than VEPCO's old, 263,000-pound-capacity steel triple hoppers.
"As the economy continues to experience uncertainty, we strive even harder to provide the most creative and flexible financing and leasing solutions to our customers," said CIT Rail Resources Senior Vice President George Cashman. "We employed innovative thinking and a customized approach to help streamline VEPCO's business at the least possible cost, by helping them secure cars with greater capacity and faster loading."
VEPCO Transportation Planning Specialist Jim Mawyer said CIT's efforts "will allow Bremo Power Station to not only stay competitive but will also help resolve some operational and safety concerns."
| 6/14/2001 |
Despite a continuing surge in coal traffic, U.S. railroad carloadings as a whole were 1% below year-ago levels in this year's first 23 weeks. The biggest declines were in metallic ores and metals, down 10.8%, and motor vehicles and equipment, down 10.6%. Coal loadings through June 9 ran 7.8% ahead of last year, and heavy, long-haul coal trains helped keep total revenue ton-miles 0.4% higher than a year ago. Intermodal traffic on U.S. railroads was off 3% in this year's first 23 weeks. In Canada, carload traffic was down 1.6% from 2000 levels; intermodal traffic rose by 2.6%.
| 6/14/2001 |
The Brotherhood of Locomotive Engineers Advisory Board voted June 11 to resume unification talks with the United Transportation Union. UTU President Byron A. Boyd, Jr., said creating a single operating union is necessary to prevent railroad management "from playing us off against one another." Boyd said unification will produce "a strong, single voice fighting for better wages, benefits, quality of life, and job security." The BE Advisory Board's June 11 resolution said the discussions should be reinstated as of their status on May 8, 1999, when BLE withdrew from the negotiating table.
| 6/12/2001 |
New York Sen. Charles Schumer, in a letter to Transportation Secretary Norman Mineta, stated that "before any contract is signed, it should be made public and there should be a debate," over Amtrak's plan to use Penn Station as collateral on an already-approved $300 million loan.
Schumer feels that if Amtrak were to default on the loan, it would "put a key component of the transportation system for New York and the entire Northeast Corridor at risk."
Amtrak, desperate for operating funding, plans to use the loan to cover expenses until the start of its fiscal year in October, and blames current cash problems on the delayed launch of its Acela Express program.
| 6/12/2001 |
Genesee & Wyoming has started hauling shipments from a new Western New York rock salt mine owned and operated by American Rock Salt. It replaces the original salt mine that was closed after collapsing in 1995.
Trinity Industries will provide a fleet of 600 new cars for the rail service, which are owned by American Rock Salt and managed by GWI. An estimated 750 monthly carloads are expected to be shipped until the third quarter, when production will ramp up and 1,200 carloads per month will be hauled to connections with CSX, Norfolk Southern, and Canadian Pacific.
| 6/12/2001 |
The Alliance for Rail Competition (ARC) has registered a bitter complaint against the Surface Transportation Board's new merger rules, declaring that they leave captive customers "to the mercy of expanding regional monopolies."
The rules "offer no reason for those captive customers to believe their concerns will be addressed to any better satisfaction than they have in previous merger proceedings," said Diane Duff, executive director of ARC, a lobbying group supported by shippers of coal, grain, chemicals, and other bulk commodities. "In fact, by emphasizing its support for the general concept of promoting "competition," the board appears to have missed the point altogether. Most agree that, to the extent that rail mergers improve rail operations, they could, at least theoretically, improve the railroad's ability to compete for truck-competitive traffic, although this has yet to be borne out in any previously completed merger. Rather, competitiveness concerns expressed by rail customers have always focused on the fact that little or no attention has been given to promoting competition among and between rail carriers."
Railroad reaction to the new rules was generally more positive, though it included what one observer characterized as "ritualistic grunts of disapproval."
Association of American Railroads President and CEO Edward R. Hamberger said that while the AAR was still reviewing the decision, "We continue to believe that new rail mergers should be not be subject to a standard requiring enhancement of competition, but instead should be subject to the test of whether a merger preserves competition -- the same test that applies to other industries under antitrust laws."
Approving words for the STB action came from Canadian National, whose proposed merger with Burlington Northern and Santa Fe a year and a half ago set off the 15-month merger moratorium that culminated in issuance of the new rules.
Canadian National President and CEO Paul M. Tellier said: "CN is pleased that the rules adopted by the STB will raise the bar for the quality of customer service in future railroad mergers. CN had urged the agency to adopt such an approach last year. CN is also pleased that the STB appears to have heard its concerns to apply higher public interest standards for mergers equally to all applicants -- both domestic U. S. companies and foreign-headquartered corporations."
CSX Transportation, while it said the new rules would make mergers more difficult to achieve, also said they could produce a "more stable environment" for forging railroad alliances.
| 6/11/2001 |
The Surface Transportation Board has issued a new set of major-merger rules that it says "substantially increase the burden on rail merger and consolidation applicants to demonstrate that a proposed transaction is in the public interest." The final rules closely follow those outlined in the STB's Notice of Proposed Rulemaking issued last Oct. 3. With Chairman Linda J. Morgan dissenting, the Board waived application of the new rules to the Kansas City Southern.
STB's announcement of the rules on June 11 said a key change will require applicants to show that a transaction "would enhance competition where necessary to offset negative effects of the transaction, such as competitive harm, and to address fully the impact of the transaction on service, including plans for service reliability." Competitive enhancements "could include, but would not be limited to, reciprocal switching arrangements, trackage rights, and efforts to eliminate restrictions on interchanges by short line railroads."
In a reaction statement issued by its Washington office, CSX Corp. found it "disappointing that potential mergers, and their accompanying benefits, will be judged on a decidedly harder and more complicated set of regulatory standards than those faced by other U. S. businesses." But CSX also said the decision "is likely to result in a more stable environment which will allow railroads to pursue alliances with other railroads that could very well result in substantial economic and operational benefits."
STB's decision ended a 15-month moratorium on major railroad consolidations that was triggered by a merger proposal announced by Burlington Northern and Santa Fe and Canadian National late in 1999. Rumors in recent weeks have suggested that BNSF and Norfolk Southern may make the first move under the new rules.
| 6/11/2001 |
The Greenbrier Companies announced on June 11 "significantly reduced earnings expectations" and said it has initiated a new round of workforce reductions and other cost-cutting measures. The company said it expects to post net losses for its third and fourth fiscal quarters, owing to reduced car production levels in North America as well as lower anticipated margins on certain car types in North America and Europe. For the total fiscal year, the company expects results ranging from about break-even to a slight loss. Earlier in June, Greenbrier reduced its corporate and commercial staff in North America by about 25%, or 35 positions. Greenbrier also said that so far this year it has laid off about 1,500 manufacturing employees, or 40% of the workforce at its three North American factories. Substantial layoffs have been made at Gunderson-Concarril in Mexico and Trentonworks in Nova Scotia, and one factory may face closure or temporary shutdown. At the Gunderson facility in Portland, Ore., 125 workers out of 1,200 were laid off in May and another 160 face layoff in July unless orders pick up in June.
| 6/8/2001 |
Pioneer Railcorp announced it has spun off the Elkhart Indiana division of its Michigan Southern operation to create a new railroad, Elkhart & Western (EWR). Pioneer said it formed the nine-mile EWR as a separate entity "to capitalize on its competitive access" and simplify interchange operations with the Norfolk Southern. EWR also connects with CSX Transportation at Fort Wayne, Ind., through a haulage agreement reached in negotiations with Norfolk Southern prior to the NS/CSXT acquisition of Conrail
| 6/8/2001 |
In one of several moves designed to shore up earnings in a faltering economy, Pioneer Railcorp announced that it has expanded its marketing department and purchased a third-party logistics company, Hudson Railway Services, thus entering the intermodal and logistics management market. The short line holding company said a slowing of the economy in the first quarter led it to expand its marketing department "in order to maintain market share and develop new traffic." Pioneer Railcorp President and CEO Guy L. Marino said that with Pioneer Logistics, a new division of Pioneer Railroad Services, Inc., the company can offer domestic and international intermodal service to any shipper in the country.
| 6/8/2001 |
CSX Transportation has notified customers that it plans to close most of its main line between Flomaton, Ala., and Pensacola, Fla., from July 2 to July 6 for a major rehabilitation that would take weeks if carried out under traffic. Working around the clock, more than 700 m/w employees will install more than 100,000 ties and six miles of rail, rebuild or repair 14 bridges, and clean up embankment shoulders on more than 60 miles of track. CSXT said there could be 24- to 48-hour transit delays for line haul traffic i rerouted to other railroads and gateways.
| 6/8/2001 |
Using a fleet of 600 new Trinity-built cars, Genesee & Wyoming early in June began hauling rock salt from a new mine at Hampton Corners in upstate New York. The cars are owned by American Rock Salt and managed by the railroad. GWI started out moving salt at the rate of approximately 750 carloads a month and expects that figure to rise to 1,250 carloads a month in the third quarter. The salt will be primarily used for de-icing roads in the northeastern states. About 2.5 million tons a year will be distributed by both rail and truck. The new rock salt mine, the first built in the U. S. in more than 40 years, is estimated to have 80 years of reserves in 10,000 acres of mineral rights.
| 6/8/2001 |
Canadian Pacific is investing $36 million (C) to accommodate a continuing increase in container traffic, which has edged out grain and coal to become its biggest revenue producer. CPR will spend $26 million to expand capacity by 55% at its Vaughan Intermodal Facility serving the Toronto area, $8 million to expand its Calgary Intermodal Facility two years ahead of schedule, and $1.6. million for improvements at Bensenville Yard in Chicago. In this year's first quarter, intermodal brought in 23% of CPR's revenue. Between 1996 and 2000, the railroad's intermodal revenue increased 29%.
| 6/7/2001 |
U.S. Transportation Secretary Norman Y. Mineta has given permission for Amtrak to put up parts of Penn Station New York as collatoral for a $300 million loan to cover an operating shortfall (see related story, June 6). "This transaction is not unlike steps taken by other private-sector companies to secure operating cash," said Amtrak President and CEO George Warrington in a statement.
| 6/6/2001 |
"There's no question Amtrak is facing very, very serious financial problems." That assessment came from U.S. Transportation Secretary Norman Y. Mineta during a briefing with reporters on June 5, at which he revealed that the cash-strapped passenger carrier has asked the White House permission to mortgage part of Penn Station New York for a $300 million loan to cover an operating shortfall. Amtrak is already $3 billion in debt with loans for capital projects, but this is the first time it has sought a loan to cover operating expenses.
Mineta, who expects shortly to be appointed to Amtrak's board of directors, also said that Amtrak probably will not be able to survive as a national system, and should instead limit its services to the Northeast Corridor, the West Coast, the Chicago hub, and possibly other selected routes, "rather than trying to blanket the country with service that is not financially viable." He said that it is "obvious" that Amtrak is not going to meet its Congressionally-mandated goal of operational self-sufficiency by Fiscal Year 2003, which begins Oct. 1, 2002. He said that restructuring Amtrak operations to a limited number of corridors could be an alternative to liquidation, which is technically supposed to happen if the self-sufficiency goal is not reached. But Amtrak does enjoy support in Congress--Senate Majority Leader Tom Daschle (D.-S.D.) and Minority Leader Trent Lott (R.-Miss.) both support a $12 billion capital bond bill--and it is widely believed that Congress would not permit liquidation to occur.
In response to Mineta's pronouncements, Amtrak officials insisted that the carrier is still on "a glide path" to operational self-sufficiency, and that cutting back routes would be a mistake. Spokesman Bill Schulz said Amtrak believes there are opportunities to add service "where it makes economic sense." Chief Financial Officer Arlene Friner blamed the cash shortfall on late delivery of the Acela Express high speed trainsets, which began revenue service on the Northeast Corridor in December 2000, more than one year behind schedule. Amtrak says it needs a minimum of $1.5 billion per year in capital appropriations, triple its current appropriation of $521 million, just to keep its system in a state of good repair. Critics, like Sen. John McCain (R.-Ariz.), citing the $23 billion in capital and operating funds Amtrak has already received during its 30-year history, say that any further investment in Amtrak would be a waste of taxpayer dollars.
| 6/4/2001 |
Burlington Northern and Santa Fe is now offering 48-hour intermodal service between Chicago, Ill., and San Bernardino, Calif. Currently, BNSF transit times on this route, which uses the high speed "Transcon" main line, range from 50 to 54 hours, and "do not provide a departure early enough to make in-week deliveries," says BNSF Assistant Vice President-Intermodal Direct Marketing John Lucas. The new service, which begins June 5, offers Chicago departures on Tuesday and Wednesday mornings, with arrivals in San Bernardino on Thursday and Friday mornings. "Our less-than-truckload and parcel shippers have historically not been able to use intermodal to a great extent early in the week because of the extreme in-week competitive service expectations," says Lucas. "They have had to rely a great deal on expensive team-driver truck transportation. This new service is a direct result of listening to our most service-sensitive customers and providing them with a true competitive option to over-the-road transportation."
| 6/1/2001 |
Norfolk Southern has until June 11 to tell the Surface Transportation Board why the Board should not order the railroad to cancel its planned closing of car repair shops at Hollidaysburg, Pa., and keep them running at present capacity for a "significant" period beyond Sept. 1. The board based its action on pledges to keep Conrail shops open which NS made during the Conrail acquisition proceeding.
| 6/1/2001 |
Union Pacific Corp. announced June 1 that it hopes to move 4,100 employees into a new headquarters building in downtown Omaha by mid-2004. The UP board on May 31 authorized construction planning for the proposed 19-story, $340 million building to proceed. Final action is contingent upon favorable action on UP's application to the Invest Nebraska Board. The Invest Nebraska legislation, which was signed into law in late May, "will enable us to build a new, cost-effective headquarters," said UP Chairman and CEO Dick Davidson. He said the new building will consolidate employees now working at seven different locations in Omaha and St. Louis. It will have 1.1 million square feet of space and will be located on Douglas Street between 14th and 15th, south of the existing UP headquarters. The glass-exterior building will have a 19-story atrium.
| 6/1/2001 |
Fewer than half of the eligible voters bothered to return their ballots as members of the Brotherhood of Maintenance of Way Employes on May 30 ratified a tentative agreement reached with the National Carriers Conference Committee. Of 27,982 ballots sent out, 45% were returned and 69% of these approved the agreement -- a "difficult but wise decision," said BMWE President Mac Fleming. "As we stated to our members during the ratification process, this is not a good agreement," said Fleming. "However, given the overt anti-labor animus and pro-management bias of the members of the National Mediation Board and the Administration they serve, this agreement is far better than what we would have received from the political presidential emergency board that would be recommended by the NMB and appointed by President Bush."
| 5/31/2001 |
Adopting a practice already common in Europe, Amtrak has joined Icelandair in offering a single reservation good for a combined rail/air journey. Under a codeshare agreement that became effective May 31, travelers may purchase tickets good for Amtrak travel from Philadelphia or Washington, D. C., to Baltimore-Washington International Airport (BWI), connecting with Icelandair's daily flights to the UK and continental Europe. The train portion of the ticket will show an Icelandair flight number. The rail/air reservations are available only from travel agents and Icelandair, not from Amtrak. "This form of intermodal transportation has been quite successful in Europe, and our customer surveys indicated positive results in our test markets here," said Gunnar Eklund, Icelandair's general manager for the Americas.
| 5/31/2001 |
May 26 was a red-letter day for French railway technology. An eight-year old TGV that had already logged nearly 1.6 million miles set a world high speed endurance record, covering the 662 miles between Calais and Marseilles at an average speed of 190 mph. The train averaged 227 mph on a 155-mile new section of the high speed rail network between Valence and Marseilles, which will be opened for revenue service on June 10, following its ceremonial opening by French President Jacques Chirac on June 7. "This is a triumph for French industry and for all French railwaymen," said French National Railways President Louis Gallois. "It is now a record to beat."
| 5/31/2001 |
Under a ten-year contract, Burlington Northern and Santa Fe will move more than four million tons of coal annually from the Powder River Basin fields in Wyoming and Montana to Minnesota Power generating plants that serve 144,000 customers in northeastern Minnesota and northwestern Wisconsin. "Minnesota Power was the first utility in the early 1970s to ship Powder River Basin coal via unit trains from the western United States, and we've enjoyed a strong and growing relationship ever since," said BNSF Group Vice President Tom Kraemer.
| 5/31/2001 |
A Canadian National-CSX Intermodal marketing agreement announced May 28 offers five-day service between Vancouver, B. C., and New York (Kearny, N. J.). Other traffic lanes covered by the agreement include Toronto-Florida, four days, and Toronto-New York, two days. CSXI President and CEO Clarence Gooden said the agreement will give shippers "truck-competitive service with truck-competitive reliability at rail intermodal rates." Buffalo will be the gateway for shipments moving between Western Canada and the U. S. Northeast, and between Eastern Canada and markets in the I-95 corridor along the Eastern Seaboard; Chicago will be the gateway for traffic between Western Canada and the U. S. Southeast, Florida, and Mid-South.
| 5/31/2001 |
A Canadian National-CSX Intermodal marketing agreement announced May 28 offers five-day service between Vancouver, B. C., and New York (Kearny, N. J.). Other traffic lanes covered by the agreement include Toronto-Florida, four days, and Toronto-New York, two days. CSXI President and CEO Clarence Gooden said the agreement will give shippers "truck-competitive service with truck-competitive reliability at rail intermodal rates." Buffalo will be the gateway for shipments moving between Western Canada and the U. S. Northeast, and between Eastern Canada and markets in the I-95 corridor along the Eastern Seaboard; Chicago will be the gateway for traffic between Western Canada and the U. S. Southeast, Florida, and Mid-South.
| 5/25/2001 |
Railway Age is now accepting nominations for its 2001 Short Line Railroad of the Year and Regional Railroad of the Year awards. All Class II and III railroads are eligible. The awards recognize outstanding achievement in marketing, operations, customer service, and problem-solving of any kind. Nominations must be in Railway Age's New York office by July 16, 2001. Entry forms are available from: Christopher Ytuarte, Associate Editor, Railway Age, 345 Hudson St., New York, N.Y. 10014. Phone: (212) 620-7236. Fax: (212) 633-1863.
| 5/24/2001 |
Trinity Industries reported a net loss of $74.4 million on revenues of $2.74 billion, after unusual charges of $173.3 million, for the fiscal year ending March 31, 2001--reflecting a significant business downturn in its Railcar Group. Operating revenues for that group were $738.9 million in 2001, a 51% reduction from the $1.5 billion posted in FY 2000. The division posted an operating loss of $31.7 million after unusual charges, compared to a profit of $153.2 million the prior year. Operating revenues in Trinity's other business groups (Inland Barge, Parts and Services, Construction Products, Industrial) also dropped, but not nearly as much as the railcar operation.
"The North American railcar market is not showing signs of recovery at this point," said Trinity Chairman, President, and CEO Timothy Wallace. "Pricing for railcars remains very competitive, with a large portion of our customers electing to lease cars rather than purchase them. This coincides with our decision to expand our leasing business. Until we see more improvement in the North American rail market, we believe it is reasonable to expect that our net income in FY 2002 will be comparable to our FY 2001 net income, before unusual charges."
Those unusual charges related primarily to restructuring of Trinity's railcar operations, as well as various investment and asset write-downs, and severance costs. Without them, Trinity posted net income of $36.5 million in FY 2001, compared to $165.5 million in 2000. The Railcar Group, before unusual charges, posted an operating profit of $36.3 million for the year.
| 5/21/2001 |
The days when trains rumbling through or near western towns were a source of civic pride and a sign of prosperity have long since vanished. The Detroit, Minnesota & Eastern's proposal to extend its lines into Wyoming's Powder River Basin coalfields has raised widespread fears of environmental damage and threats to public safety along the proposed route -- 280 miles of new rail line in South Dakota and Wyoming and 600 of existing lines upgraded for a procession of coal trains in South Dakota and Minnesota. These fears, along with proposals for alternative routes, were the subject of a majority of the 8,500-plus comments the Surface Transportation Board received in response to a 5,000-page Environmental Impact Statement draft issued last September. They will be considered as the STB's Section of Environmental Analysis prepares a final EIS, due late this year.
| 5/14/2001 |
Burlington Northern and Santa Fe says a new $80 million intermodal facility in Stockton, Calif., will boost its intermodal lift capacity in the area from 120,000 to 300,000 units annually. The 425-acre facility has two loading and unloading tracks more than a mile long with the capacity to hold 150 intermodal cars, plus three storage tracks capable of accommodating 280 cars. BNSF said 15% of the total cost was for establishing a 55-acre wildlife sanctuary adjacent to the facility and a contribution of more than $9 million to San Joaquin County for intersection and roadway improvements.
| 5/14/2001 |
ABC-NACO reported net sales of $102.7 million for the first quarter, down $31.1 million from the first quarter of 2000. The company had a first quarter net loss of $18.1 million, compared with a loss of $500,000 a year ago. ABC-NACO said its performance reflected "significantly lower product demand from new freight car builders and continued reduced spending by the railroads on maintenance items such as loose wheels, replacement sideframes, and couplers."
| 5/11/2001 |
The Surface Transportation Board has agreed to handle the proposed Canadian National-Wisconsin Central merger as a "minor" transaction and has established a procedural schedule leading to a final decision by Sept. 7. CN President and CEO Paul M. Tellier said the schedule "is realistic and should give interested parties ample time to comment on it." The proposal has won the support of more than 330 individual shippers as well as the National Industrial Transportation League, said Tellier.
| 5/11/2001 |
In its new quarterly forecast, Economic Planning Associates (EPA) has cut its estimate of freight car production this year from 45,000 units to 38,600. That compares with 55,791 new cars delivered in 2000 and 74,223 in 1999. A slight increase is predicted for intermodal car deliveries this year, but production of other major car types will be down, slightly to sharply. Gondola car production will take one of the hardest hits, with deliveries expected to drop around 70%. EPA expects a five-year upturn in the freight cccccar market to begin late this year with deliveries rising to 42,500 in 2002 and to 64,500 by 2006.
| 5/7/2001 |
Amtrak has reached agreement with the Florida East Coast to operate trains serving eight additional communities on a route between Jacksonville and West Palm Beach. First, however, commitments are needed for an unspecified amount of state and local funding. Amtrak plans two daily round trips with stops in St. Augustine, Daytona Beach, Titusville, Cocoa/Port Canaveral, Melbourne, Vero Beach, Fort Pierce, and Stuart. Service will begin about a year from now if funding is secured in time for the first phase of capital improvement to begin in July. These improvements will include stations, signaling, and sidings.
| 5/7/2001 |
United Transportation Union President Byron A. Boyd Jr. has called on railroads to join the labor organizations in "a real and substantial dialogue concerning working conditions in general, and their potential impact upon the safety of operations in particular." He said such talks need to be "free of blame-game tactics" on either side and "must take place with new ground rules because...joint committees that have met in the past have been expensive endeavors without any enduring results." The railroads, while pointing out that the employee casualty rate has dropped 70% in the last two decades, have agreed that more needs to be done. A Federal Railroad Administration report shows that the casualty rate has essentially been on a plateau for the last four years.
| 5/7/2001 |
Railroad carloadings dropped 1.3% in this year's first 16 weeks and intermodal loads were down 2.6%. Revenue ton-miles were up less than one-tenth of 1%. Among 19 commodity groups, those showing increases were coal, up 7.8%; food and kindred products, up 5.5%; farm products excluding grain, up 5.1%; grain mill products, up 4.9%; and coke, up 2.4%.
| 5/4/2001 |
Wisconsin Central Transportation Corporation--the presumed merger partner of Canadian National--reported record first-quarter 2001 North American operating revenues of $92.7 million, topping last year's $91.9 million. Coal and wood fibers showed strong gains, though they were partially offset by softness in other markets. North American operating income was $16.8 million, compared to $18.1 million in the year-ago quarter. North American operating expenses were $75.9 million, up 3% from last year's $73.8 million, primarily due to increases in labor-related and fuel expenses. Fuel expense was up 21%, reflecting higher prices per gallon. The North American operating ratio was 81.9%, vs. 80.3% for first-quarter 2000.
On the international side, the contribution from English Welsh & Scottish Railway Holdings Ltd. was $3.8 million, vs. $2.6 million in the year-ago quarter. EWS operating revenues increased more than 4% while operating expenses increased 2.5%. The contribution from Tranz Rail Holdings Ltd. was $1.1 million, vs. $1.9 million in first-quarter 2000. Tranz Rail operating revenues were up 10%, while operating expenses were up 17%, including a fuel expense increase of 24%.
These results accounted for net first-quarter income for WCTC of $11.6 million, compared to first-quarter 2000 net income of $12.6 million.
| 5/1/2001 |
What the labor-management "safety summit" at Kansas City, Mo., on April 30 did to promote safer working conditions on the Burlington Northern and Santa Fe was not immediately clear, but it appears to have been a step toward more amicable relations between the United Transportation Union and the Brotherhood of Locomotive Engineers. The two unions have been at odds for several years, with the BLE fighting what it says is UTU's effort to create a single operating craft. The safety meeting produced an agreement between the presidents of the two unions and the BNSF to create a committee to recommend safety improvements in the wake of recent derailments. The union presidents also said the meeting was "a new beginning" (UTU's Byron A. Boyd, Jr.) that could "mutually advance the causes of our memberships" (BLE's Edward Dubroski).
| 5/1/2001 |
Genessee & Wyoming Inc. has announced a three-for-two stock split, a move that Chairman and CEO Mortimer B. Fuller said reflects "sustained strength of GWI's stock price, which has appreciated over 100% in the past 12 months, and our positive long term outlook driven by the balanced earning power of our North American and Australian operations." He said the split also "highlights our efforts to improve the liquidity of our common stock." The split will be in the form of a 50% stock dividend, payable June 15 to shareholders of record May 31. In this year's first quarter, GWI reported earnings per diluted share, before special items, of 72 cents, compared with 87 cents on the same basis in first quarter 2000.
| 5/1/2001 |
Kansas City Southern Industries has opened its first bulk transload center (TLC) in Spiro, Okla., and says it plans to open similar facilities in Louisiana and Mississippi later this year. The Spiro TLC, operated by Emerson Transload, serves bulk commodity shippers and receivers in the Ft. Smith, Ark., area who are not directly served by rail. KCSI said the TLC initiative is part of its effort to reach more customers by partnering with "select" logistics, trucking, and warehousing firms.
| 4/27/2001 |
President Bush has selected Jenna Dorn, who worked at the Department of Transportation during the Reagan years, to head the Federal Transit Administration. Dorn is currently president of the National Health Museum. A long-time associate of Elizabeth H. Dole, she was director of the Office of Commercial Space Transportation during Dole's tenure as DOT secretary. Dorn was assistant secretary at the Department of Labor when Dole headed that department, and she served as senior vice president-policy and planning, of the American Red Cross when Dole was ARC's president. She also worked for Martin Marietta as director of strategic planning.
| 4/27/2001 |
Amtrak, 30 years old on May 1, aproached its birthday in a growth mode. The national passenger railroad reported that ridership rose to more than 11 million and ticket revenue increased to $564.3 million in the first half of Fiscal Year 2001, improvements of 7% and 12.2%, respectively, from the first half of FY 2000. In the Northeast, revenue was up 19% for Acela Express/Metroliner service and 17.5% for Northeast Direct/Acela Regional trains. Among long-distance trains with increased revenue were the Texas Eagle, 20%; Carolinian, 7.8%; Crescent, 9.6%; and Capitol Limited, 16%. The Capitols in California posted a 36% increase in revenue, and the Cascades service in Oregon and Washington reported a 15% increase.
| 4/27/2001 |
In an article on ballast machines published in the April issue of Railway Age, the manufacturer of the KBC 750 ballast undercutter/cleaner was incorrectly referred to in the text on p. 54 as "KnoxKershaw." The correct name of the company is "Kershaw." The ballast machine in the accompanying photo (lower left) shows a KnoxKershaw High Speed Shoulder Cleaner, not a Kershaw KBC 750. Kershaw and KnoxKershaw are separate companies. Kershaw is a part of Progress Rail Services; KnoxKershaw is independently owned and operated. Phil Brown is not affiliated with KnoxKershaw.
| 4/26/2001 |
Steel Dynamics, Inc., says it will immediately begin construction of a $300 million rail and structural steel mini-mill in Whitley County, Ind., following final approval of the project by the U. S. Environmental Protection Agency. The new plant is scheduled to go into operation by the third quarter of 2002. It will produce head-hardened rail in lengths up to 330 feet as well as structural steel beams, pilings, and other components for bridges and buildings in the transportation and industrial markets.
| 4/26/2001 |
Kansas City Southern Industries cited high derailment costs in its U. S. operations as it reported first quarter income of $6.3 million, down from $10.4 million in the year-ago quarter. Per-share earnings from U. S. operations this year were zero vs. 12 cents last year. Earnings from KCSI's equity in Grupo FNM in Mexico were 10 cents a share this year, compared with six cents in the 2000 quarter. "Our casualty costs [in the U. S.] increased dramatically quarter to quarter due to unusually large expenses related to derailments as well as the settlement of a personal injury claim," said Chairman, President, and CEO Michael R. Haverty. "These derailments had a residual effect on our service levels, which has resulted in some operating inefficiencies." Haverty emphasized that the increase in derailment expense "is not reflective of the well-maintained physical plant of KCSR and Gateway Western." He suggested that track flaws had gone undetected by a contractor. All of this helped drive the operating ratio of KCSR/Gateway Western to 94% from last year's 86%. Higher expenses led to an operating ratio of 79.8% for Grupo TFM in this year's first quarter compared with 72.7% last year.
| 4/26/2001 |
Union Pacific Corp. reported net income of $181 million in the first quarter, helped by improved performance at Overnite Transportation. This was close to the $185 million net posted by the corporation in first quarter 2000. UP said that excluding Overnite, operating income was $430 million compared to $451 million in the same period last year. The railroad operating ratio rose to 83.8% from 82.9%. Productivity improvements partially offset rising fuel costs that added $35 million to expenses, or 1.3 points on the ratio, said the company. At Overnite, the operating ratio dropped 2.9 percentage points to 96.9%. UP Chairman and CEO Richard K. Davidson said that despite near-term economic uncertainty, "our unparalleled franchise and diversity of commodity mix enable us to maintain a very positive long-term outlook."
| 4/25/2001 |
Norfolk Southern's operating ratio in this year's first quarter was 86.7%, down from 91.4% in the first quarter of 2000. Operating revenues of $1.54 billion were 2% higher than in the year-ago quarter: expenses were down 3%. Coal revenues increased 13% and intermodal business was up 12%; general merchandise revenues dropped 5%. Income from continuing operations was $61 million this year vs. $14 million a year ago on a comparable basis. "Our restructuring initiatives are beginning to generate momentum," said Chairman, President, and CEO David R. Goode.
| 4/25/2001 |
Burlington Northern and Santa Fe reported operating income of $419 million in the first quarter, $91 million lower than in the comparable 2000 period. Revenues were up slightly to $2.26 billion on a 4% increase in ton-miles, but expenses rose 7% due to increased fuel costs, severe winter weather, and higher electricity and other energy costs. The operating ratio rose to 81.5% from 77.3% a year ago. BNSF said coal revenues declined 1% to $526 million as a result of lower revenue per unit on certain contract renewals. Higher demand for soybeans moving through the Pacific Northwest to China helped push agricultural commodities revenues up by 11% t0 $361 million.
| 4/25/2001 |
In mid-April, Amtrak activated North America's first Positive Train Control (PTC) system on a 65-mile stretch of track between the Michigan cities of Niles and Kalamazoo. Amtrak Intercity President Edward V. Walker said this will enable Amtrak to increase top speeds in the corridor from 79 mph to 90 mph this summer and ultimately to 110 mph. Amtrak also announced that, effective with the new spring/summer timetable starting April 29, it would cut 15 minutes from Chicago-Detroit travel time by replacing older Dash-8 locomotives with faster-accelerating GE P42 units. The journey will now be scheduled for five hours, 32 minutes.
| 4/24/2001 |
Only 8,413 new freight cars were ordered in this year's first quarter, and 60% were intermodal units. "It appears that freight car building is sinking into one of its severe cyclical declines," said Robert A. Matthews, president of the Railway Progress Institute. First quarter 2001 numbers were close to the 8,478 cars ordered in the final quarter of 2000. Freight car deliveries in the first quarter dropped to 11,070, the lowest first quarter level in seven years.
| 4/24/2001 |
Still recovering from problems that plagued the Conrail split-up, CSX Transportation reported improvements in "speed and fluidity" and other key operating yardsticks in the first quarter. But for parent CSX Corp., increased rail operating income was offset by higher expenses connected with non-rail affiliates. As a result, corporate net income slipped to $20 million, or 10 cents per diluted share, nearly 30% below analysts' expectations.
| 4/24/2001 |
A 13% increase in intermodal revenues helped Canadian National post first quarter net income of $202 million (C), a 3% increase from last year, excluding non-recurring gains in both the 2001 and 2000 quarters. Operating income was flat at $385 million (C), and the operating ratio was 72.5%, an 0.3% increase from a year ago. CEO Paul Tellier said the company expected performance for the remainder of the year to be even with or slightly ahead of the economy.
| 4/19/2001 |
Union Pacific is promising truck-like speed and rail-haul economics to users of its new boxcar "shuttle train" between the Pacific Northwest and Southern California. Speedlink, a logistics subsidiary of Genesee & Wyoming, Inc., is partnering with UP to provide what they describe as "one-call, door-to-door, multiple-stop service with inventory control and direct store delivery."
| 4/19/2001 |
Norfolk Southern and Burlington Northern and Santa Fe announced April 19 that they are teaming up to provide coast-to-coast, non-stop intermodal service, eliminating Chicago cross-town truck transfers and reducing transit time for customers by at least a day.
| 4/19/2001 |
ABC-NACO's newly-named president and CEO, Vaughn Makary, says the company should "return to profitability later this year." He said this will happen as the company begins to experience the full impact of "recent plant consolidations and productivity improvements" and other cost controls as well as the "ongoing growth of our rail services industries." ABC-NACO reported on April 18 that it experienced a net loss of $56.2 million in 2000, compared with a loss of $20.9 million in 1999.
| 4/17/2001 |
Flood waters surging around the Twin Cities of Minneapolis/St.Paul, MN, have forced both Canadian Pacific and BNSF to shut down various lines along the swollen Mississippi River, and both companies have had to repair damage, reduce service, and detour trains on others. Traffic on three Union Pacific routes has also been affected, and Amtak's Chicago-Seattle Empire Builder trains have been replaced by buses between Chicago and the Twin Cities due to high water along the tracks.
| 4/17/2001 |
Workers have begun replacing the 94-year-old catenary system that enables Metro-North and Amtrak trains along the Connecticut stretch of Metro-North's New Haven line between New Haven and New York. Over the next eight to ten years, 180 miles of wire on the route will be replaced at a cost of $300 million, and high speeds along the line may increase from 60 mph to 90 mph once the work is complete.
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