Hamel, Minn.-based Loram Maintenance of Way Inc. said it has logged more than 4 million man-hours, over a 2 ½-year span, without a “lost-time injury,” with the injury-free span still growing.
The accomplishment complements Loram’s recent receipt of the the 2009 Minnesota Governor’s Award for Safety. Loram has received this award in 13 of the last 14 years. It also has ben honored with the 2008, 2007, 2005, and 2004 Gold NRC award for safety, a First Place Safety Award from NRC in 2000, and a 97% score in 2008 from a Liberty Mutual Insurance safety audit, reportedly the highest safety score ever obtained by a company in this audit.
U.S. freight traffic continued to struggle for the week ended July 18, the Association of American Railroads reported, down 17.9% compared with the comparable week in 2008. AAR did note, however, that rail carloadings were at their highest level in 15 weeks. Intermodal volume of 189,541 trailers or containers also fell 18.8% from the comparable week last year. Total volume of 28.7 billion ton-miles was down 17.3%.
Seventeen of the 19 carload freight commodity groups were down from last year. Farm products other than grain gained 19.8% compared with year-ago levels.
Canadian railroads reported volume down 24.4% from year-ago levels, while intermodal fell 22.3%. Mexican rail freight volume slipped 7.3%, while intermodal dropped 21.1%.
Combined North American rail volume for the first 28 weeks of 2009 on 14 reporting U.S., Canadian, and Mexican railroads was down 19.9%. Intermodal fell a comparable 17.1% during the same period compared with 2008 levels.
Crediting cost control measures and lower fuel prices, BNSF Thursday reported second-quarter earnings rose to $404 million, or $1.18 per diluted share, compared to second-quarter 2008 earnings of $350 million, or $1.00 per diluted share. The 2008 earnings figures included a $0.31 per share charge related to environmental matters in Montana. Earnings results soundly surpassed analysts' earnings-per-share expectations of $1.00.
BNSF said operating expenses for the quarter declined $1.25 billion, or 33%, to $2.52 billion, compared with second-quarter 2008 operating expenses of $3.76 billion. The $1.25 billion reduction was primarily attributable to strong cost controls, decreased unit volumes, and lower fuel prices.
Freight revenue fell $1.13 billion, or 26%, to $3.22 billion in the quarter compared with $4.35 billion in the prior-year period. BNSF attributed the decline in part to a decrease in fuel surcharges of about $600 million. The remaining variance was due to lower unit volumes as a result of the economic downturn, partially offset by improved yields.
“BNSF had another strong quarter of cost control in an extremely difficult economic environment,” said BNSF Chairman, President, and Chief Executive Officer Matthew K. Rose (pictured at right).
“We are beginning to see BNSF’s volumes stabilize in our more economic sensitive businesses, and because of our continued focus on productivity combined with our long-term market opportunities, we are well positioned to benefit when the economy recovers," Rose said.
Morgan Stanley & Co. analysts William Greene
and Adam Longson
said BNSF's second quarter results tell a a “solid story”: “Earnings surpassed our expectations, even when adjusted for
one-time items, and the degree of cost volume variability displayed in
recent quarters is impressive.” However, there may be somewhat less room for improvement, compared to other Class I's: “We expect BNSF pricing to trail other rails given
its larger relative exposure to truck competitive traffic. Moreover,
volumes are unlikely to recover as much as other rails on any rebound
in auto production given limited auto exposure, previous customer wins
and volume outperformance, and the loss of Hub Group traffic.”
Norfolk Southern CEO Wick Moorman tolda House subcommittee Thursday that tax incentives to expand freight rail capacity would generate $1 billion in economic benefits and 20,000 green jobs.
“America needs more transportation capacity and needs it now,” Moorman said in testimony presented on behalf of the Association of American Railroads.
Asserting that today’s transportation network is not designed to handle the doubled freight demand projected by 2035, Moorman (pictured at left) said railroads are "the most affordable and environmentally responsible way to meet this demand."
He noted that railroads spent arecord $10.2 billion in capital improvements last year alone, adding: “Since 1980, railroads have spent more than 40% of their revenues–some$440 billion–to maintain, improve, and expand their networks. “Yet as much as railroads are investing, it isn’t enough to meet projected demand," Moorman said.
Moorman said recent study found a $52 billion gap between the $148 billion needed for expanding freight railcapacity and the $96 billion railroads can expect to generate. Tax incentives “provide a sensible way to help bridge this gap,” he said.
“Numerous states are partnering with us,” Moorman said. “Thanks to the leadership of Pennsylvania Gov. Ed Rendell, Virginia Gov. Tim Kaine, and others, we are already investing to expand our system to meet the looming demands of moving our nation’s commerce. Congress should bolster these efforts by enacting tax credit legislation to encourage additional freight rail investment,” he said.
With customers cutting their fleets and pressing for price breaks, GATX Leasing Corp. on Thursday reported a 68% drop in second quarter earnings and revised its forecast for 2009 earnings from $2.50 to $2.00 per share.
Second-quarter income was $12.7 million, or 27 cents per share, vs. analyst expectations of 40 cents for the rail and marine equipment lessor.
"In Rail, customers continue to trim their rail fleets and seek the most competitive rates when renewing leases,” said GATX President and CEO Brian A Kenney. “GATX is competing aggressively to maintain fleet utilization while selectively shortening the term of renewals to position the fleet to benefit from a stronger market in the future."
On June 3, GATX had approximately111,000 cars in its North American fleet. Utilization was 96.0% compared to 96.5% to the end of the first quarter and 97.9% at the beginning of the year.
Debunking the oft-made claim that light rail transit systems “steal” riders from existing bus operations, and therefore offers little public benefit, North Carolina's Charlotte Area Transit System (CATS) Thursday disclosed survey results finding that 72% of Lynx LRT riders are new to public transportation and hadn't used buses before.
Among those riders surveyed who previously had traveled by means other than a single-occupant vehicle, 21% of Lynx passengers previously rode a bus, while another 6% either used a CATS vanpool or another form of carpooling.
CATS hired an outside marketing firm to survey nearly 1,000 rail riders in December and January, in an effort to determine the system’s customer market and the reasons people chose to ride LRT.
The survey found that the average Lynx rider's householdincome is $65,000, compared with $55,200 for an express bus rider and $31,800 for a regular bus rider. The median county household income is $62,241, according to CATS.
Union Pacific Corp. Thursday said its second-quarter profit was better than expected despite lower freight volumes and revenue, and said the economy appears to have stabilized.
UP net income of $468 million, or 92 cents per share, was down 12% from the second quarter of 2008, when it notched $531 million, or $1.02 per share. Excluding a one-time benefit from a $72 million land sale, UP reported earnings per share of 78 cents, better than the consensus estimate of 74 cents anticipated by Wall Street.
Quarterly revenue fell to $3.30 billion from $4.57 billion in the comparable 2008 period; analysts had expected $3.38 billion. Freight volume fell 22% during the quarter, UP said.
“Although we expect it will be some time before the economy recovers," Chief Executive Jim Young (pictured at right) said, "it appears that volume levels may have hit the bottom as the economy seems to have stabilized.”
New York-based investment bank Dahlman Rose & Co.concurs. In a note July 24, the company said, “Although the economy will likelyprovide near-term challenges for Union Pacific, the railroad has clearly showedus its ability to truly weather the storm. Indeed, once freight levelseventually return, UNP has ample capacity to take them on without spendingsignificant excess capital. We continue to believe that the company’s trueoperating ratio lies somewhere south of 70% in a more normalized economicenvironment. Accordingly, we reiterate our Buy rating on the company’s shares.”
Said Morgan Stanley & Co. analysts William Greene and Adam Longson: “Consistentwith our forecast for an auto-led volume rebound in 2H09, UP management firmlyreiterated recent comments from other rails that volumes have likelybottomed. Having some of the easiest volume comparisons among the railsin 3Q and a large auto franchise, we believe that UP could post one ofthe better volume recoveries later this year as auto productionrebounds.
"Furthermore, new intermodal volumes from Hub Group shouldramp through 2H09 and further boost volumes. As these volume trends play out, we expect earnings revisions to improve across the rails, but at UP in particular. We expect much of UP's recentproductivity gains achieved in the downturn to be sustained as volumesrebound, driving substantial operating leverage. Management has notedthe company could easily add 10% more volume without adding anothertrain start.
"We expect UP to outperform," Morgan Stanley said. "We aresignificantly above consensus on 2010 EPS ($4.65 vs. $4.30) even thoughwe assume a tepid rebound and pricing slows materially. UP is particularly leveraged to an auto-led rebound and has easy 2H09 and 1H10 comps. In our view, UNP has the potential for large productivity gains and recent results confirm management is executing."
Citing its growing role in "green business" opportunities, Canadian National notes it is playing a key role in the transportation of huge windturbine components to northeastern British Columbia. CN Specialized Services (CNSS) says it recently completed the first-ever rail move of twin-pack wind turbine blades from German manufacturer Enercon GmbH and Salco Energy Services Inc. of Calgary. Enercon is a global manufacturer of wind turbine systems; Salco Energy offers wind turbine transport and wind park logistics management.
CN says 51 sets of twin-pack blades are being installed in the 102 MW Bear Mountain Wind Park in Dawson Creek, British Columbia. When completed, the Bear Mountain installation will have 34 Enercon E-82 3.0 MW wind turbines that will generate enough clean, renewable electricity to power most of the province's South Peace Region. The project is on schedule to become British Columbia's first fully operational wind park by the end of the year.
CNSS received the wind turbine blades, measuring 135 feet in length, at the Port of Thunder Bay, Ont., in early May, and arranged for rail car modifications forthe move. Six trains were required to transport the equipment from Thunder Bay to Dawson Creek over CN's network. At the receiving end, CNSS provided services for unloading the equipment for transportation to the wind farm. Dan Bingeman, CN assistant vice-president, said: "The logistics of moving the turbine components were a challenge, but that is what CN and CNSS do best. And we are well positioned to support this important emerging market on accountof our extensive network reach, port connections on three coasts, expertise, and complete transportation solutions." CN says it serves the main wind farm regions of Canada, from Nova Scotia toBritish Columbia, and also the U.S. Midwest. CN says wind turbine componentsare one of its growing sustainable energy business segments, which include environmentallyfriendly wood pellets for energy generation, biodiesel and ethanol. "CN, as a railway, can help address the challenge of climate change,"said Bruno Demers, director of marketing for CN. "Rail emits six timesless greenhouse gases (GHG) than heavy trucks. Plus, rail consumes a fractionof the fuel to transport one [metric] ton of freight one kilometer.”
Downers Grove, Ill.-based Hub Group Inc. Wednesday reported its second-quarter profit fell 45% due to weakness in all of its transport sectors.
Revenue from truck brokerage and intermodal segments—both involving freight rail—each fell 28%; Hub Group’s logistics sales revenue declined 9%. Total revenue fell 26% to $363 million, compared with $491 million in the second quarter of 2008; analysts had anticipated revenue of $387.5 million.
But earnings beat analyst consensus expectations of 21 cents per share. The company said it earned $8.3 million, or 22 cents per share, in the second quarter, compared with $15 million, or 40 cents per share, in the comparable quarter a year ago.