Canadian Pacific Railway earned a third-quarter profit of $195 million, up 14% from 2008, the railroad announced Tuesday. Diluted earnings per share were $1.16, an increase of 5% (All figures are in Canadian dollars.)
CP said foreign exchange gains and losses on long-term debt and other after-tax items, including the sale of two large properties, had an impact on earnings of $0.31. Excluding these items, adjusted diluted earnings per share were $0.85, handily beating the Wall Street consensus estimate of 78 cents.
“We delivered strong cost control and tight resource management this quarter while traffic volumes remained under pressure,” said Fred Green, President and CEO. “We are continuing to refine and optimize our business processes to further drive structural cost improvements. This increases our flexibility and positions us well to respond to changes in volumes as the economy begins to recover.”
Said Dahlman Rose & Co. Director-Equity Research and Railway Age Contributing Editor Jason Seidl, “Canadian Pacific has demonstrated an ability to keep costs down and improve operating efficiencies. While it seems unlikely that a significant upturn in volumes will follow the ongoing stabilization in the near term, CP is well positioned to further improve its bottom line results by continuing its cost control and service enhancement strategies.”
CP said that in the third quarter and the first nine months of 2009, the results of the Dakota, Minnesota & Eastern are consolidated with CP’s results; however, for the same periods in 2008 DM&E earnings were reported as equity income on one line of the income statement. In order to aid in the evaluation of the underlying earnings trends, 2008 results have also been presented on a pro forma basis, which is a non-GAAP measure. Financial data presented on a pro forma basis, redistributes DM&E’s operating results from an equity income basis of accounting to a line-by-line consolidation of DM&E revenues and expenses.
Maryland Transit Administration Police plan to begin aprogram of random security checks at MARC train stations this Friday, usingbomb-sniffing dogs to screen passengers' luggage and packages to detectexplosives. Administration officials warned riders that delays could occur andurged passengers to allow extra time to board trains on the MARC’s Penn, Camden,and Brunswick lines.
Lt. Col. John E. Gavrilis, chief of the MTA police, said thetighter security was not a response to a specific threat but part of a generaleffort to "target-harden" Maryland transit facilities. The effortcould be extended to Baltimore’s Metro and light rail stations in the future. Gavrilis said the MTAhas been working with the federal Transportation Security Administration todesign the program and noted the agency has received a federal grant to hirepersonnel and to purchase equipment needed for the screenings.
Screenings could involve luggage, packages, or othercarry-on items. Police will rotate the random screenings among the variousstations in the MARC system.
One day after regional competitor Norfolk Southern heralded a joint effort with Union Pacific, CSX announced its own coordinated effort with UP, dubbed “RailChem Connect,” designed to coordinate and expedite chemical transport within the Texas Gulf Coast region and the Southeast.
RailChem Connect aims to allow shipments to bypass smaller rail yards for expedited transit between major hubs, the railroads said. “These changes, along with increased operations coordination between the railroads,increase reliability of east- and west-bound service between Union Pacific-served chemical markets such as Houston, southern Texas, and Louisiana, and CSXT-served consumption markets in the southeastern states.”
Besides striving for more consistent and speedier transit time, RailChem Connect also will offer both railroads faster equipment turns and a shorter route than previously available for chemical shipments in the service region, the railroads said. CSX and UP said such improvements are in addition to gains already made, including reduction of transit time “between major markets by 25% in the last three years while improving consistency by 23%.”
"Our teams are coordinating efforts to focus on animproved service product for chemicals customers by reducing transit times and tightening the variability in our delivery, significantly improving reliability for customers," said Diane Duren, vice president and general manager of Chemicals for Union Pacific.
"In addition to the inherent safety and environmental advantages that rail offers shippers, RailChem Connect creates advantages for Union Pacific and CSXT customers that allow them to derive even more value from rail," said Dean Piacente, CSXT vice president-Chemicals & Fertilizer. "The increased coordination between our railroads results in improved transit and consistency, which translates into enhanced supply chain efficiency, a more balanced cycle for private rail equipment, and bottom-line cost savings for our customers."
Brookville Equipment Corp. said late Monday locomotive BMEX259 went into “immediate service” at short line Central California Traction Co.’s Port of Stockton (Calif). operations, "working its three diesel GENSETS and powerful regenerative brakes," with both the manufacturer and the railroad claiming significant results that exceeded expectations.
CCTC General Manager Dave Buccolo says he noted a 43% fuel savings over the railroad’s current fleet of SW1500s. “On the CCTC Lodi Line,” he said, “the BMEX 259 achieved a 49% fuel savings over one of the lines where GP1800 locomotives handle the daily train duties and car counts on the main line at 25 mph.” He added, “CCTC saw the locomotive’s dynamic braking system added to the fuel and brake shoe wear savings.”
Brookville says the locomotive’s “Power on Demand” feature employs a microprocessor to sense when additional engines are needed for power and automatically restarts the engine or engines required, reducing engine exhaust emissions by at least 51% over a single-engine application.
CCTC's Buccolo also said Brookville’s traction and engine control system (TECU) provided tractive effort that allowed the short line to increase the number of cars hauled per trip. He said substituting the CoGeneration locomotive into a standard CCTC train consist allowed the railroad to pull “4,700 tons out of a dead start up a 2.2% grade for 2,900 feet to a speed of 10 mph,” faster than with the railroad’s current multiple-unit consists.
Union Pacific Railroad and Norfolk Southern Monday introduced the Gulf Coast Flyer, a rail service for the safe transport of chemicals between the Union Pacific-served southern Texas and Louisiana regions and Norfolk Southern destinations across the U.S. Northeast and Southeast.
The two Class I railroads said the service “is designed to build on improved routing and enhanced operations coordination between the two railroads,” with eastbound and westbound shipments between the two railroads connecting at both the Salem, Ill., and New Orleans, La., gateways.
With an investment of $740 million in infrastructure upgrades, UP and NS foresee transit times for shipments moving in major joint lanes improving “by more than 20% for shippers.”
"The investment in these lanes combined with increased coordination between our two railroads directly benefits our customers," said Diane Duren, vice president and general manager of Chemicals for Union Pacific. "Transit times in these lanes are faster, which lowers inventory carrying costs for customers. It also allows them to turn their private equipment faster, getting better utilization from their assets. Service reliability also is improved, providing our customers with greater supply chain efficiencies."
The railroads say they also continue their focus on safety, including “through ongoing training efforts with TRANSCAER (Transportation Community Awareness and Emergency Response), the voluntary national outreach effort to help communities prepare for and respond to a possible hazardous material transportation incident. Working with TRANSCAER, Union Pacific and Norfolk Southern have helped train more than 5,000 responders in communities along Gulf Coast Flyer lanes since 2006,” the railroads said.
"As we work together to offer a faster, more reliable product for customers, safety remains a primary focus for both of our teams," said Joe Osborne, vice president-Chemicals for Norfolk Southern. "With Gulf Coast Flyer service, we offer the safety and environmental advantages of shipping by rail, along with the expedited transit and reliable service advantages customers require in these critical markets."
The Advisory Board of the Brotherhood of Locomotive Engineers and Trainmen announced Oct. 23 that it will review its practices for referring legal counsel to injured union members.
BLET's announcement came several days after the arrest of its president, Edward W. Rodzwicz, on a federal complaint charging him with bribery in connection with attorney referral.
“BLET members rightfully deserve and expect that their elected officers, and those DLC attorneys who represent them in FELA matters, will at all times act with fidelity and in the best interests of the union and its members, and in strict compliance with all laws,” Acting President Paul T. Sorrow said. “Nothing less will be tolerated by our union and hardworking members.”
Injured railroad employees are not covered by workers compensation laws. The Federal Employers Liability Act (FELA) grants exclusive jurisdiction to federal courts for injury claims brought against rail carriers.
The Surface Transportation Board announced Monday that only one Class I railroad, Norfolk Southern, achieved revenue adequacy for the year 2008. All others were found to be "revenue inadequate" last year.
The annual determination of revenue adequacy is made inaccordance with standards and procedures developed after passage of the Staggers Rail Act of 1980, which substantially deregulated railroads. A main goal of Staggers was to restore the railroad industry to a return on investment that would at least match its cost of investment capital.
"In Railroad Cost of Capital — 2008, STB Ex Parte No. 558 (Sub-No. 12) (STB served Sept. 25, 2009) we determined that the 2008 railroad industry cost of capital was 11.75%," STB said in its announcement Monday. "By comparing this figure to the 2008 ROI data obtained from the carriers’ Annual Report R-1 Schedule 250 filings, we have made revenue adequacy calculations for each of the Class I freight railroads that were in operation as of December 31, 2008."
Following is STB's summary of the Returns on investment forall Class I railroads in 2009:
BNSF Railway Co.: 10.51%
CSX Transportation, Inc.: 9.34%
Grand Trunk Corp. Consolidated (including all Canadian National U.S. affiliates): 9.89%
Kansas City Southern Railway Co.: 7.72%
Norfolk Southern Railway Co.: 13.75%
Soo Line Railroad Co. (including all Canadian Pacific U.S. affiliates): 9.29%
Union Pacific Railroad Co.: 10.46%
Los Angeles County Metropolitan Transportation Authority said Monday its six-mile Gold Line extension would open to passengers November 15, a Sunday, following five years of construction. LACMTA will offer free rides on opening day.
The $890 million extension includes eight stations, with two midpoint stops, Soto Station and Mariachi Plaza Station, underground. The extension also routes the Gold Line through Los Angeles Union Station, a current terminus of the route, where connections to other heavy rail and light rail services can be made. Estimated travel time between Union Station and Atlantic Station, the new terminus, is 17 minutes.
Pittsburgh-based Ansaldo STS USA said Monday it has launched www.PTC-ASTS.com, a website dedicated to Positive Train Control (PTC) solutions. The site has been created to address the mandate for PTC nationwide due to the Rail Safety Improvement Act, passed by Congress and signed by President Bush in the fall of 2008.
ASTS USA says it has worked diligently to provide a comprehensive family of products to help the rail industry meet the 2015 deadline set by the act. The website provides a guide to ASTS USA’s VitalNet™ PTC Solution. The VitalNet PTC Solution includes a family of new products specifically designed for PTC wayside, onboard, and office applications.
The website also includes: continuously updated product information; service Manuals and documentation; new product developments; and PTC-specific news from ASTS USA.
Design of the website allows users to find the products that are specific to their application. For example, the company said, the products and solutions relevant to the needs of a freight railroad may not meet the needs of users in Amtrak’s Northeast Corridor.
The company also announced Monday that Chief Operating Officer Jeremy Hill is leaving as of this Friday, October 30, after serving for 30 years. In a statement, Ansaldo STS USA President and CEO Dr. Alan E. Calegari said Hill "has been an important contributor to our organization. The whole Ansaldo STS team recognizes and appreciates the contributions he has made over his years with the company."
Lexington, Mass.-based RailRunner TM, N.A., Inc. announced Friday a 10-year collaborative agreement with Kolkata, India-based Stone Indiathrough Stone’s wholly owned subsidiary, Stone Intermodal Pvt Ltd. Under the exclusive agreement, Stone will manufacture, operate, distribute and sell RailRunner products inIndia.
Railrunner develops and markets an advanced container-based intermodal transport system. The company said it already has received commercial and operating clearance from Indian Railways, and that design validation is in progress and should be completed soon. Once Indian Railway approves, “the company will enter into an agreement with Indian Railways fortrain operation with RailRunner’s unique, container-carrying intermodal cars,” RailRunner said in a statement.
Amit Mondal, managing director and CEO of Stone India, predicts RailRunner will have a major market impact because “through introduction of this patented system, for the first time, Indian container freight movement will have an air-cushioned ride and an articulated bogie, thereby enabling freight trains to run at mail/express train speed and permit sophisticated, fragile products to be transported through rail. The system will enable movement of automobiles, automobile components, and refrigerated productsseamlessly by rail as well as road.”
Stone India will invest $32 million in two phases, in order to first build manufacturing capacity to produce 25 RailRunner freight cars a month, and eventually to set up a “greenfield manufacturing plant” capable of producing 500 cars per month.
All the major components and systems for these freight cars will be manufactured in-house by Stone India. The company expects the cargo market in India will support 50 operating RailRunner freight routes within five years.
For RailRunner’s part, said Presdient and CEO Charles Foskett, “We have been working closely with Stone for some time in preparationof the collaboration agreement.” He added, “We are confident that Stone has the core technology, marketing strength, and understanding of the needs of India Railways to achieve significant market penetration. We are looking forward to working closely with Stone to support them in their commercial efforts. We agree with Stone that the Indian market will be a significant revenue source for our products."