At the depth of the recession, railroads had miles of freight cars and locomotives in storage and thousands of train crew members on furlough. With recovery now well on the way, that picture is fast changing, as figures released this week by CSX Corp. demonstrate.
As of the second week in April, CSX had:
As of the second week in April, CSX had:
* Reduced its number of furloughed rail and engine crews from a peak of 2,533 to 1,093.
* Cut the number of locomotives in storage from 707 to 272.
* Reduced the fleet of stored freight cars from 30,533 to 12,321.
CSX noted that locomotives and freight cars can be returned to service within a week, demonstrating a railroad’s ability to quickly size its operations to either rising or falling demand.
Chicago Transit Authority Friday introduced prototypes of the agency's new 5000-series rail cars, produced by Bombardier Transportation, and said it will begin testing the cars in revenue next week. The 10 cars are the first of a total of 406 rail cars costing $603.6 million.
The 5000-series prototypes, which already have been undergoing testing by CTA engineers and Bombardier representatives for several months, will debut on the Red Line and then will be tested on all eight rail lines through at least the end of the year. This in-service testing of the 10 railcar prototypes will seek to determine how they perform when operating in the conditions that CTA's rail fleet is subject to throughout the year. The cars must successfully complete testing before the CTA will finalize the order of the remaining 396 rail cars.
The new rail cars will replace CTA's oldest rail cars,between 32 and 41 years old, such as the 2200-series Budd cars that werepurchased in 1969-70 and currently run on the Blue Line, as well as the 2400-series Boeing-Vertol cars purchased in 1976-78 currently operating on the Green and Purple lines.
Equipped with regenerative braking technology, the 5000-series cars also include new diagnostic systems that will alert a train operator to any issues with equipment when they occur on a digital display in the motor cab. The new cars will use AC propulsion, and also have new heating, ventilation, and air conditioning systems designed to withstand severe weather conditions.
Paul Clark, former vice president, Communications & Public Affairs, for CanadianPacific, passed away April 12. At CP, Paul was the creative force behind theHoliday Train, which has raised close to $5 million and 2.2 million pounds offood for Canadian Food Banks since its inaugural run in December 1999. Inlieu of flowers, contributions may be made to the Alberta Cancer Foundation -Strategic Lung Initiative - Dr. Donald Morris, 1331 - 29 Street N.W., Calgary,Alberta, T2N 4N2.
With the threat of state legislative interference looming in the background, the University of Minnesota and the Metropolitan Council late Thursday reached at least a partial accord on the $957 million Central Corridor light rail line planned for downtown St. Paul.
The university, along with Minnesota Public Radio, has consistently challenged design and engineering plans for the LRT line; the university has claimed the route could disrupt sensitive scientific equipment on campus. The university has even filed a lawsuit to prevent such a possibility. Pro-rail critics of the university have accused the institution of posturing, possibly for financial leverage, and have challenged the university to provide data backing its concerns.
Met Council spokesman Steve Dornfeld issued the following statement: “The Metropolitan Council and University of Minnesota have reached an interim agreement that will allow construction to proceed on the Central Corridor LRT project while fully protecting the university's sensitiveresearch facilities. The agreement included University approval of temporary easements needed for road improvements in the campus area that was scheduled for this summer.”
Such an agreement would allow construction to proceed on the route and remove much uncertainty, which many have claimed could jeopardize federal support for the project.
The 11-mile Central Corridor route (map above) will link St. Paul’s Union Depot with the existing Hiawatha Line LRT operation in neighboring Minneapolis. The line includes 18 stations, with 17 in St. Paul and one new stop in Minneapolis, and serve five existing Hiawatha Line stations. The Hiawatha Line opened in 2004.
Barring continuing delays, the new line is scheduled to begin revenue operation in 2014. While some light construction activity is ongoing, Met Council says heavy construction on the Central Corridor is scheduled to commence in August near the state Capitol.
The agreement doesn’t supersede the lawsuit the university has filed against Met Council over disputes on the project. University officials say the lawsuit will be dropped once all pending negotiations are finalized. Negotiations are set to resume April 26.
Raymond James Financial Services analyst Steven Hansen told clients in a note Thursday that railroad recovery in Canada has reached a state of “reasonable health and vigor,” and he accordingly upgraded earnings estimates for both Canadian National and Canadian Pacific.
He increased his price target for CP to $68 a share from a previous $65 and maintained an “outperform” rating. He increased his target for CN to $67 from $54.50, with a “market perform” rating that reflected an earlier run-up in the price.
“Weekly volumes are not only improving, but also surging to fairly robust levels—in some cases recovering to pre-recession levels,” Hansen said.
He noted that CN carload freight traffic increased 14.6% in the first quarter compared to the 2009 quarter, and CP carloads grew 9.1%.
Both railroads will report their first-quarter earnings late in April.
J.B. Hunt was the first trucker to team up with railroads to promote intermodal service in a big way, and the resulting success story continues to unfold. Another glowing chapter emerged Wednesday.
J.B. Hunt Transport Services Inc. announced first-quarter results that exceeded analysts' expectations with the strongest performance coming from the company’s intermodal segment, where revenue increased 20% to $469 million on a 21% increase in volume.
Given this impetus, J.B Hunt’s net income in the first quarter increased 22% to $37.5 million, or 29 cents a share, from $30.8 million in the same quarter last year. Total operating revenue was $844.7 million, up 17%. Analysts had anticipated revenue of $797.2 million and earnings of 27 cents a share.
J. B. Hunt shares were up 4.3% in early morning trading Thursday.
The company became an intermodal partner of the Santa Fe Railway about 20 years ago, putting its trailers and containers on rail for the long haul and reaping large savings in fuel and driver costs—a strategy that became particularly important in later years when fuel costs soared and driver shortages developed. Intermodal is now the company’s biggest segment.
The Association of American Railroads (AAR) reported Wednesday that carload traffic on U.S. railroads rose 7.55% in March compared with the same month last year, but was down 11.5% from March 2008.
“It is important to note that while we are seeingpositive growth in carloads compared with last year, things are still down from 2008,” said AAR Senior Vice President of Policy and Economics John Gray. “It will take some time for traffic to rebound to where we were in 2006—the best year in history for rail traffic.”
AAR said 16 of the 19 commodity groups saw higher carloads last month compared with the same month last year. U.S. rail intermodal traffic was up 12.1% in March compared with the same month last year, but down 4.5% for the same month in 2008.
On a seasonally adjusted basis, carloads in March were up 3.9% compared with February 2010, while intermodal was up 2.1%.
As for the latest weekly figures ending April 10, AAR said Thursday that U.S. carload traffic rose 16.4% from the comparable week in 2009, with all 19 carload commodity groups showing increases from last year. Volume still trailed 12% below the comparable 2008 period. U.S. intermodal traffic was up 14.2% from last year but down 10.5% from the 2008 week.
Leading the 19 carload commodity groups in gains were: shipments of metals, up 108.6%, metallic ores, up 97.6%, primary forest products, up 54.4%, scrap, up 54%, and motor vehicles, up 35.%%.
Canadian carload traffic rose 31% for the week ending April 10 compared with 2009, and intermodal rose 17.4%. Mexico’s two major railroads reported carload traffic gained 68.7% from the comparable week in 2009, while intermodal rose an even heftier76.2%.
Combined North American rail volume for the first 14 weeks of 2010 on 13 reporting U.S., Canadian, and Mexican railroads rose 6.2% compared with the comparable 14 weeks in 2009. Intermodal rose 9.3% from last year.
Toronto-based Fraser Papers, Inc., a shipper served in Maine by the Montreal, Maine & Atlantic Railway, has hailed the action by the Maine state legislature to identify $57.8 million in bonds, including roughly $10 million to purchase 240 miles of MM&A right-of-way. Such action still requires approval by state voters, who will decide this November whether the expenditure is worthwhile.
But Fraser Papers has taken the issue a step further, suggesting that if Maine itself purchases the route, service should be provided with railway companies bidding on the use of the lines, with possibly more than one provider traversing the route—what’s known in the industry as “open access.”
Fraser Papers identified Canadian National and Saint John, New Brunswick-based regional railroad NB Southern Railway as possible competitors to serve the route. NB Southern Railway also serves Maine and Quebec.
Fraser Papers' Edmundston-Madawaska pulp and paper operation, straddling the Canadian-U.S. border, relies on the rail line to ship the vast majority of its paper.
MM&A, which owns track in Maine, Vermont, Quebec and New Brunswick, sought permission in February to abandon the Maine right-of-way, which runs from Madawaska to Millinocket, Maine.
The Surface Transportation Board announced Wednesday that it will ask MM&A officials and the Maine Department of Transportation to discuss formal mediation efforts in Washington. A hearing has been scheduled for April 22 at STB headquarters.
Said STB: “The
Board believes that a meeting between the State and MMA, facilitated by Board
staff, could be very beneficial in this case. While there is much that
separates these parties, they also share some common interests. The State is
interested in acquiring these lines to protect local industries and
communities, while the railroad wishes to relieve itself of the obligation of
owning and operating these rail lines if abandonment authority is granted. In
these circumstances, the Board believes it is in everyone’s best interest to
explore any and all options that may help preserve this rail corridor as part
of the national rail system. We appreciate that the parties already have been
engaged in lengthy discussions toward that end, and we encourage them to
continue to do so. The Board has mediation resources and staff with extensive
knowledge of its abandonment, discontinuance, and offer of financial assistance
(OFA) procedures that may help the parties reach an agreeable resolution of
some of their issues. A meeting
between the railroad and the State under the auspices of Board staff may thus
offer opportunities for the consideration of procedures that could benefit all
the parties in the case.”