CSX Corp. led off first-quarter earnings reports for the Class I railroads Tuesday, April 14, and as expected reported a profit decline, down 30% from the first quarter of 2008. Revenue fell 17% to $2.25 billion. But CSX still beat Wall Street consensus estimates, logging earnings of $246 million, or 62 cents per share, for the quarter; analysts anticipated 51 cents per share on revenue of $2.26 billion.
CSX acknowledged that volume was down across all segments, as construction and consumer-related markets remained weak; auto and auto parts shipments were particularly hard hit, down 53% from the year-ago quarter.
The company said it cut its operating expenses by 17%, and also noted fuel costs fell by $250 million due to both lower fuel prices and shrinking volume.
“Freight revenues at the rail division (CSXT ) were down 16% to just under $2 billion as a 2.5% improvement in average revenue per carload was no match for 19% decline in volumes,” said Jason Seidl, director at Dahlman Rose & Co. (and a Railway Age contributing editor). “Operating profits fell just 12% as CSXT was able to improve its operating ratio by 130 basis points.” By contrast, CSX Intermodal suffered a 22% revenue decline for the first quarter. “This suggests to us that CSXI has had to resort to cutting rates in an attempt to remain competitive with the very aggressive trucking market,” Seidl said.
“With the rail industry trying to cope with the most drastic volume declines in recent history, we believe management will focus on how they are attempting to cut costs in its attempt to right-size the rail network,” Seidl said.
CSX Chairman, President, and CEO Michael Ward, in a statement, said, "In this economic downturn, CSX is focusing sharply on the things that are more within our control—safety, customer service and productivity.” He added, “We are taking tough actions to right-size our operations in this challenging environment."
In Wednesday morning trading, CSX shares rose 10%, to $31.23.
Hatch Mott MacDonald (HMM) said Tuesday it has signed a contract with the Tri-County Metropolitan Transportation District of Oregon(TriMet) to provide preliminary engineering services for the Portland-Milwaukie Light Rail Project--East Segment, extending Portland’s ever-growing LRT from SE 8th Avenue in Portland to the suburb of Milwaukie, in neighboring Clackamas County. A notice to proceed is expected this week.
As prime consultant, Hatch Mott MacDonald will lead a project team of 16 subconsultants to deliver preliminary engineering, civil engineering, light rail trackway design, traffic engineering, structural engineering, geotechnical engineering, architectural/urban design, public utility relocation design, environmental, and permit coordination services for the 7.3-mile extension. Constructionon the new MAX line could begin in 2011 and be completed by 2015.
Paul Heydenrych, P.E, HMM’s area manager for Oregon and Southwest Washington, will serve as project manager. Heydenrych has more than 30 years experience managing large transportation design and construction programs. His work experience in the Portland area includes providing project controls and construction management support services for the Westside MAX light rail extension as part of the consultant team hired by TriMet.
"We are delighted to be selected for this important expansion of Portland's light rail system,” said John Townsend, executive vice president and head of operations in the western U.S. for Hatch Mott MacDonald.
Facing a $160 million deficit, the Massachusetts BayTransportation Authority (MBTA) is waiting for a rescue plan from the state legislature before it goes forward with its annual approval of money of replace and maintain subway cars and buses as well as rail infrastructure. The board delayed a scheduled vote on April 13.
MBTA's ongoing capital investment plan, mostly to maintain "state of good repair" with only 2% designated for expansion, would require the borrowing of $1 billion to support this year's planned $3.9 billion program.
One board member, asserting that "this is the most highly leveraged transit system in the United States," was quoted as saying: "We just cannot afford to borrow an additional million."
While it waits for the legislature to make a final decision on a proposed increase in the gasoline tax to help pay for transit improvements, the agency is considering rail, rapid transit, and bus service cuts that have been called "potentially drastic."
Amtrak reports that it carried 1,849,000 passengers in February, down nearly 8.87% from the 2,029,000 carried in February 2008. On-time performance improved to 82.3% this year from 72.1% in February 2008.
Ticket revenue was down 10.7% to $106,387,000 compared to February of last year.
In the first five months of the current fiscal year, which began last Oct. 1, Amtrak carried 10,878,000 riders, down nearly 2% from the corresponding period in the prior fiscal year. On-time performance improved to 77.4% from 72.6%.
Ticket revenue for the fiscal year so far was $657,281,000, 2.36% below revenue for the prior-year period.
Dwayne Meadows, a bridge supervisor for Norfolk Southern, has won the 2009 Dr. Gary Burch Memorial Safety Award. The award honors individuals who have “significantly enhanced rail passenger safety,” according to the family of Dr. Burch and the National Association of Railroad Passengers (NARP), which announced the honor Tuesday.
“Our family is pleased to present this award to Mr. Meadows,” said Bette Burch, widow of Dr. Burch, who died in a passenger rail derailment in 1991; the Burch family established the $1,000 award in 1994. “We are gratified that Norfolk Southern has joined the ranks of those submitting nominations, and that its first nomination was this year’s winner. We give particular consideration to the workers in the field who make safety happen on a day-to-day basis. Mr. Meadows perfectly fits this description.”
Meadows, a 31-year veteran at NS, has supervised numerous groups and “garnered a sterling safety record. The bridge gangs he supervises have gone 19 years--working on high-traffic freight and Amtrak routes--without a Federal Railroad Administration reportable injury,” NARP said.
Meadows, of Altoona, Pa., actively has pursued improvements to Amtrak's station platforms on NS rights-of-way in Pennsylvania, according to NS Vice President C.J. Wehrmeister, who submitted Meadows’ nomination. “He replaced plywood with sturdier materials that reduce ice-buildup in all the platforms between Harrisburg and Latrobe; at Greensburg he removed the platform that allowed passengers to cross the tracks rather than using a pedestrian tunnel; and he has consistently displayed a willingness to respond to problems at stations outside of his district; all to ensure the safety of passengers,” Wehrmeister said.
House Rep. Earl Blumenauer (D-Ore.), an ardent supporter of streetcars and light rail transit, has drafted the “Fast Starts Program Act of 2009,” designed to recapture “Small Starts” funding that Blumenauer and others say has been largely diverted to Bus Rapid Transit projects instead.
Language in the draft bill bluntly declares, “A delay in authorizing grants under the Small Starts program has created a backlog of streetcar projects requiring attention outside of that program.”
The bill also takes pains to specifically identify the given mode, stating “the term ‘streetcar project’ means a new fixed guideway capital project that is electricity and rail based.”
As reported in the February issue of Railway Age, in recent years the Federal Transit Administration, encouraged by the Bush Administration, touted Bus Rapid Transit as an alternate, less costly “fixed guideway” mode that small urban areas could more readily afford.
Bluemenauer’s office also is drafting a revised “Small Starts” bill for the current congressional session, the “Federal Streetcar Revitalization Act of 2009,” which would increase the amount of federal funding support available to potential streetcar projects. The draft legislation emphasizes economic redevelopment potential, land use, and other environmental impacts, including reduction of greenhouse gas emissions—language that may be targeted specifically toward thwarting use of funds by diesel bus options.
New Haven, Conn., transportation officials are reviewing projections by two consultants, URS and TranSystems, for a proposed3.6-mile streetcar line linking Union Station (Metro-North and Amtrak service), City Hall, Yale University, the city’s theater district, and Yale New Hospital.
But according to city transportation chief Mike Piscitelli, “The city is not fully accepting either report at face value, as no formal plans are yet in place to move forward with either firm's proposals." One of the differences between the TranSystems recommendation and the city's current plan of action is that TranSystems advocates a single route, whereas the city plans to compare four different routes before making a final decision.
Also still in question, according toPiscitelli, are such variables as whether existing street widths can accommodatestreetcars as well as auto traffic. “This information is expected from the forthcoming URS report," he said.
Despite such concerns, “We are very optimistic on this,” Piscitelli said. “The TranSystems report did a good screen of our options, orders of magnitude, and cost, and this is all within a feasible, programmed, measured approach.”
New Haven would compete with a growing number of other U.S. municipalities, including other cities in Connecticut such as Stamford and Bridgeport, to receive federal funding for the proposed trolley project. Programs such as the Federal Transit Administration’s “Small Starts” program provide grants for the capital costs associated with new fixed-path transportation systems, but programs eligible for the grant must cost between $25 million and $250 million.
Recent Small Starts grants, moreover, have been awarded to bus and "Bus Rapid Transit" programs, which qualified s "fixed-path" systems. Pending legislation introduced by Rep. Earl Blumenauer (D-Ore.), an ardent streetcar supporter, could increase the amount of funding available for rail transit options, however.
The city currently records daily bus ridership averaging 25,000 to 30,000, Piscitelli said, but the trolley would not be marketed to compete with the public bus system.