In the key category of transportation (train and engine)—train operating crews—employment rose to 57,807 in March, a 2.58% increase over February.
This was about double the rate of increase for all employment. That figure increased 1.13% to 147,966 in March, according to a report posted Tuesday on the Surface Transportation Board's website.
All categories of railroad employment ran below last year's levels in March:
* Executives, officials, and staff assistants—8,966, down 10.16%.
* Professional and administrative—13,243, down 2.05%.
* Maintenance of way and structures—33,466, down 3.49%.
* Maintenanxce of equipment and shores—28,036, down 5.75%.
*Transportation (other than train and engine)—6,418, down 9.68%.
*Transportation (train and engine)—57,807, down 3.50%.
The employment index, based on 1967 as 100, was 24.3 in March compared with 24 in February and 23.7 in January.
Norfolk Southern Tuesday reported first-quarter net income of $257 million, or $0.68 per diluted share, up 45% from the $177 million, or $0.47 per diluted share, it recorded in the first quarter of 2009, and beating Wall Street consensus earnings estimates by a penny per share. Revenue rose 15% to $2.2 billion compared with the year-ago period.
NS’s operating ratio improved by 5.1 percentage points to 75.2%.
Traffic volume rose 9%. General merchandise revenue was $1.2 billion, 23% higher compared with the same period last year. Coal revenue rose 4% to $629 million compared to a year ago. Intermodal revenue of $410 million was up 12% compared with the first quarter of last year.
The company noted first-quarter 2010 results were impacted by a $27 million, or $0.07 per diluted share, deferred tax charge resulting from the enactment of recent healthcare legislation, which, effective in 2013, eliminates the tax deduction available for prescription drug expenses reimbursed under the Medicare Part D retiree drug subsidy program. “Norfolk Southern delivered strong financial performance during the first quarter, reflecting positive trends in the economy,” said CEO Wick Moorman. “Demand for rail transportation continues to grow in most sectors of our business. We remain confident that many of the cost efficiencies we have achieved will remain in place as we continue to invest in key projects and new business opportunities.”
Shares of Norfolk Southern closed down 2.36% Tuesday prior to the company's earnings announcement. In after-hours trading Tuesday, shares were up 1.39%.
The threatened abandonment of 231 miles of the Montreal,Maine & Atlantic Railway in Maine's Aroostook and Penobscot counties is going into confidential mediation under the auspices of the Surface Transportation Board. The board said it will postpone action on theabandonment application to give the state and the railroad “time to arrive atmediated solution.”
Maine officials contend that that the abandonmentwould hurt the economy of northern Maine and cost jobs.
The Surface Transportation Board said it will “suspend any formal action on the matter for three weeks and will postpone a public hearing scheduled for May 10 in Presque Isle, Maine.”
“We are pleased that the parties in the case have decided to take advantage of the Board's mediation services,” said STB Chairman Daniel R. Elliott III. “Agreements resulting from folks sitting down and negotiating are almost always better than decisions imposed from Washington.”
Leading U.S. grain and oilseed shippers offered “mixed grades” to U.S. Class I railroads in the first annual Soy Transportation Coalition (STC) Rail Customer Satisfaction Index. The Ankeny, Iowa-based group says the survey was “completed anonymously by grain and oilseed shippers of various size and scale of operations.”
“While respondents overall provided higher ratings for the rail industry’s customer service efforts, concern was consistently expressed at the costs of railservice and how they are communicated. In addition to mixed grades being given across the three performance categories, respondents also provided different ratings for U.S.-based railroads and their Canadian-based counterparts,” the coalition says, referring to Canadian National and Canadian Pacific.
Eleven questions in the survey covered issues ranging from on-time performance to customer service and costs.
“The STC survey reflects the perspectives of those who ship the overwhelming majority of grain and oilseeds in this country,” said Mike Steenhoek, the coalition’s executive director. “We do not claim the survey is the definitive barometer on the performance of the rail industry. The survey is subjective and gauges customer attitudes. These attitudes have been developed by the movement of millions of bushels of grain and oilseeds. As a result, the survey results do serve to further instruct and illuminate our understanding of the extent to which the rail industry is meeting the needs of their agricultural customers.”
Kansas City Southern Tuesday reported first-quarter revenue of $436.3 million, up a solid 26% from the comparable 2009 quarter. Adjusted diluted earnings per share of $0.44 in the first quarter rose from five cents in the first quarter of 2009.
Operating income for the first quarter was more than double last year’s level, up 127% at $108.2 million compared with $47.6 million last year, KCS said.
KCS credited “double-digit revenue improvements” throughout its commodity groupings, with quarterly volume up 15% from the year-ago quarter, and up 2% from the fourth quarter of 2009.
The first-quarter 2010 operating ratio was 75.2% compared with 86.2% a year ago, a figure Chairman and CEO Mike Haverty cited as “a record first-quarter operating ratio” for the company. Operating expenses for the first quarter of 2010 were $328.1 million.
“In the first quarter, KCS reported increased trafficvolumes in five of its six commodity groups and double digit revenue growth in all six groups,” said Haverty in a statement. “Driven by an upswing in manufacturing, KCS reported a 15% volume increase over the firstquarter of last year, as well as a fourth-quarter to first-quarter sequential improvement in volumes of 2%, which is highly unusual as historically first-quarter carloadings lag the fourth quarter on our railroad.”
Haverty also said, “The impact of increased revenues on profitability was enhanced by continued cost controls and tightly managed rail operationsin both the U.S. and Mexico.” He added, “The widespread volume gains KCS achieved in the firstquarter are certainly encouraging signs for the remainder of 2010. In addition, a number of key economic indicators are showing improving strength in the North American economies.”
Wilmerding, Pa.-based Wabtec Corp. Tuesday reported first-quarter net income of $30.3 million, or $0.63 per diluted share, compared with $32.6 million or $0.68 per diluted share for the comparable quarter in 2009. But earnings beat Wal lStreet consensus estimates of 59 cents a share.
Net sales for the first quarter were $364 million compared with $378 million in the comparable 2009 quarter.
Wabtec noted that it acquired Xorail LLC, a provider of signal engineering and design services, for $40 million during the quarter. The company also updated its full-year 2010 guidance for earnings, bolstering its estimate to $2.40-to-$2.50 per diluted share.
Albert J. Neupaver, Wabtec's president and CEO, said in a statement, "We're off to a good start for the year, with transit remaining stable at a high level and itsbacklog providing solid visibility. In the freight rail market, traffic volumes have continued to improve this year, and we are beginning to see a positive effect on our aftermarket businesses, although the original equipment markets remain weaker than last year.
“We are cautiously optimistic that the overall economic environment will continue to improve; as it does, we will maintain our cost discipline and cash focus through ongoing application of the Wabtec Performance System, and we will continue to invest prudently in our growth opportunities,” Neupaver said.
Canadian National Monday reported income of C$511 million, or C$1.08 per diluted share, for the first quarter of 2010, up 21% from the comparable period in 2009. Revenue was up 6% to C$1.97 billion. Operating income increased 25% to C$603 million. The railroad’s operating ratio was 69.3%, improving significantly from the 71.7% for the first quarter of 2009.
In a statement, CN President and CEO Claude Mongeau said: "I am very pleased with CN's first-quarter results in terms of both earnings growth and free cash flow generation. We delivered a solid winter operating performance, allowing us to accommodate increased freight volumes at low incremental cost and significantly improve service to help our customers take advantage of the stronger-than-expected economic recovery."
CN said it anticipates a “stronger economic recovery going forward” and has revised its 2010 earnings estimate upward, even though CN faces the prospect ofa higher-than-anticipated Canadian dollar, relative to its U.S. counterpart; the two currencies are now virtually on par. CN said a large portion of its revenue and expenses is denominated in U.S. dollars, which is affected by exchange-rate fluctuations.I
Mongeau said: "Our team is building momentum. We are focused onoperational excellence to drive network velocity and to innovate on the service front—our goal is to offer our customers a better transportation product to help them compete in their end markets. If the economy continues on its recovery trend, increased traffic levels and solid execution should help CN produce strong financial results for its shareholders in 2010 and beyond."
CN said its revenue gains resulted “from higher freight volumes in all commodity groups as a result of improving economic conditions in North America and globally; a higher fuel surcharge owing to year-over-year increases in applicable fuel prices and higher volumes; and freight rate increases. These factors were partly offset by the negative translation impact of the stronger Canadian dollar on U.S.-dollar-denominated revenues.”
A “new focus on cost-effectiveness and efficiency” has led the New York Metropolitan Transportation Authority to reduce its draft 2010-2014 Capital Program to $23.6 billion, a cut of $1.8 billion. The revised five-year plan will be considered by the MTA Board Wednesday, and if approved will go to the State’s Capital Program Review Board for its approval.
• Subway stations: NYC Transit will replace, repair, or rehabilitate only components that need it, expanding the number of stations that can be improved. A more aggressive and sustained maintenance program will be implemented.
• Shops, yards, and depots: The MTA will invest in facilities that maximize theirability to serve the needs of more than one agency in order to make the bestuse of capital funds. An example is Metro-North’s Harmon Shop, which provides capacity to service locomotives for both Metro-North and LIRR.
The Denton County (Tex.) Transportation Authority has reached agreement with Dallas Area Rapid Transit on operating DCTA’s A-train passenger service over a portion of DART-owned rail right-of-way.
Under the accord, DCTA will have full rights to operate and be responsible for any maintenance and any agreements between the railroad and any adjacent cities for a 20-year period, with one 20-year renewal option, while DART maintains ownership of the route being used. The Denton City Council previously approved the transfer of Denton's piece of the rail corridor north of Swisher Road—the northern portion of the planned service route—to DART. DCTA will maintain the segment.
The agreement is significant, given the rail modal difference. DART operates electric light rail service, while DCTA plans to utilize diesel multiple-unit (DMU) gear. DART’s Green Line extension to North Carrollton Transit Center, northwest of Dallas, is scheduled to open in December. DCTA service is scheduled to begin in the summer of 2011, with 11 DMU trains produced by Stadler Bussnag AG expected to cover the 21-mile route linking the City of Denton with Trinity Mills Station, within DART’s service area to be reached by the Green Line.
“The plan is to help riders on the DCTA A-Train access the DART Rail Green Line quickly and easily while keeping commuter rail on one track and light rail on another,” DART spokesman Morgan Lyons outlined to Railway Age. “Our Trinity Mills Station will be designed to do that. That’s near the northern terminus of the Green Line and will be the southern terminus for the A-Train. DART customers also benefit with new access to points north of Carrollton, like the University of North Texas in Denton.”
DART's board of directors must still approve the agreement, but Lyons said approval was likely.
Last month, DCTA and the City of Denton and the Denton County Transportation held a groundbreaking ceremony at the Downtown Denton Transit Center and adjacent DCTA Downtown Station, heralding the planned service.
Dee Leggett, DCTA’s vice president of communications and planning, said DCTA and DART had sought agreement since 2006, notwithstanding Denton County’s selection of an alternate rail mode. “DART and DCTA always knew the agreement would happen; it was just finalizing the terms,” Leggett said.
Still to be determined is an operations and maintenance agreement with Trinity Railway Express to operate the A-Train. TRE currently runs commuter rail service linking Dallas and Fort Worth.