The Association of American Railroads said Thursday that rail carload volume in the United States last week reached its highest level since the week ended Dec. 6, 2008.
U.S. railroads originated 296,599 carloads during the weekended April 17, up 16.1% from the comparable week in 2009, said the AAR. Itnoted, however, that volume was still down 11.6% from the same week in 2008.
U.S. intermodal volume in the latest week added up to 209,903trailers and containers, up 14.6% from last year but down 6.3% from 2008.
Eighteen of 19 carload commodity groups posted gains, led by a 177.5% increase in metallic ores. Other increases included 68.8% metals, 49% for motor vehicles and equipment, 46.4% for nonmetallic minerals, and 34.5% for primary forest products. Grain was up 12.2%, and coal gained 9.6%. The only commodity still in decline was pulp, paper, and allied products, down 6.7%.
Canadian railroads reported volume of 74,029 cars for the week, up 24.3%, and 47,550 trailers and containers, up 14.8%. Mexico’s two major railroads reported originated volume of 13,624 cars, up 27.8% from last year, and 7,140 trailers and containers, up 42.3%.
Combined North American volume for the first 15 weeks of 2010 on 13 reporting U.S., Canadian, and Mexican railroads totaled 5,458,936 carloads, up 7% from last year, and 3,798,266 trailers and containers, up 9.7%.
GATX Corp. has reported 2010 first-quarter net income of $18.7 million, or 40 cents per diluted share, compared to $27.6 million or $.56 per diluted share in the first quarter of 2009. Per-share earnings topped analysts’ consensus estimate of 33 cents.
“As we expected entering 2010, our markets have stabilized at relatively low levels,” said Brian A. Kenney, president and CEO of GATX. “While there are some signs of recovery, they are inconsistent, and we expect to experience revenue pressure until there is sustainable improvement inthe global economy.”
GATX said that on March 31 its North American railcar fleet totaled approximately 109,000 cars, and fleet utilization was 96.0% compared to 95.9% at year-end and 96.5% at March 31, 2009.
“The market remains very competitive as all lessors are competing aggressively to keep their fleets utilized,” said Kenney. “This has resulted in continued downward pressure on renewal lease rates when compared to expiring rates, as GATX’s LPI [Lease Price Index] was a negative 15.2% in the first quarter, compared to negative 18.7% in the 2009 fourth quarter and negative 5.5% in the prior-year period. The average lease renewal term for cars in the LPI was 31 months compared to 43 months in the 2009 fourth quarter and 45 months in the prior-year period.”
The European wholly-owned tank car fleet totaled approximately 20,000 cars, and utilization was 94.4% compared to 94.7% at year end and 96.5% on March 31, 2009.
L.B. Foster Co. came out of the first quarter with a record quarterly backlog, though revenue and earnings for the period were down.
The company reported net income of $1.8 million or $0.17 per diluted share in the quarter, compared to $3.0 million or $0.29 per diluted share in the first quarter of 2009. First-quarter sales declined 19.3% to $82.0 million from $101.6 million in the prior-year quarter.
“While sales were down across all segments in the first quarter of 2010, we were pleased with the business booked during the quarter and our backlog was substantially higher at the end of the first quarter than it was a year ago,” said Stan Hasselbusch, president and CEO. “Additionally, cost controls and pay for performance incentive plans helped mitigate the negative impact to income.
“While business activity continues to be inconsistent, especially in the industrial markets, we have seen a general strengthening in activity in most of our businesses,” said Hasselbusch. “Bookings for the quarter were $106.1 million compared to $99.9 million last year, a 6.2% increase. Backlog was $204.8 million, up 53.1% from last year, which corroborates the strengthening mentioned above. I am pleased to report that our first-quarter backlog is the largest we have ever had. In March, we acquired certain assets of Interlocking Deck Systems International, LLC, a fabricator of Bridge Products, which will fit nicely in our existing Fabricated Products Division.”
Union Pacific announced Thursday that its diluted earnings per share in this year's first quarter improved 40% to $1.01 on revenue of $4.0 billion, compared with the first quarter of 2009, exceeding Wall Street estimates of 95 cents a share and revenue of $3.8 billion.
Net income increased 43% to $516 million. Operating income totaled $988 million, up 47%, producing an operating ratio of 75.1%, a first-quarter record and 5.3 points better than first-quarter 2009.
“Union Pacific’s record first quarter was a strong start for the year,” said Jim Young, Union Pacific chairman and chief executive officer (pictured at left). “We saw quarterly volume growth on our railroad for the first time in two years, and we leveraged that volume by running a safe, service-focused, and efficient network. These efforts resulted in a best-ever first quarter operating ratio and generated strong cash from operations, setting a solid foundation for future opportunity and growth.”
First-quarter carload volumes grew 13% from the 2009 quarter. Five of six business groups reported quarterly growth, with only Energy volumes declining versus first-quarter 2009. Volume growth contributed to a 16% increase in first-quarter operating revenue of $4.0 billion versus $3.4 billion in the first quarter of 2009.
“ As we believe the case will be for all of the publicly traded railroads, first-quarter 2010 marked UP’s return to year-over-year volume growth,” said Dahlman Rose Director Equity Research and Railway Age Contributing Editor Jason Seidl. “For the western giant, this was the first reported quarterly growth in two years. While this is partly due to easy year-over-year comparisons, the magnitude of such effect has been decreasing, being progressively replaced by real strengthening in market demand. UP’s milestone achievements in volume growth did not occur at the expense of pricing. Core pricing was up 3% in the quarter . . . [and] is already trending near 4% in the second quarter. As in the case of CSX, UP was able to translate a strong top line, which was the outcome of the strength in volumes and pricing, into robust operating profits. We believe this is largely due to UP, and the railroad industry as a whole, possessing a high degree of operating leverage that allows for taking on incremental business without the need for a significant ramp up in operating resources.”
Said Morgan Stanley analyst William Greene, “Both CSX and UP results confirm that our bullish rail thesis is on track. We've argued that rails with the most volume growth and significant (highly lucrative) export franchises (coal or grain) are best positioned to generate significant beats (EPS exceeding Wall Street estimates) during the first quarter.”
International rail exhibition often have shrugged at the relative dearth of participation from North American suppliers and/or paltry attendance figures from the North American continent. But that may change at this year’s InnoTrans 2010 conference, to take place Sept. 21-24 in Berlin, conference organizers say.
“One reason for this is President Obama’s announcement pledging to invest $8 billion . . . in setting up a high speed railway network,” InnoTrans officials say. “Gradually opening up the U.S. railway market, hitherto largely closed to outsiders, is also having a positive effect on InnoTrans 2010. More exhibitors and attendees from the U.S. than ever before are expected to attend.”
InnoTrans currently counts “23 companies on the list of U.S. exhibitors, including major companies such as GE Transportation, Progress Rail Services, Wabtec Corp., Electro-Motive Diesel, and Cisco Systems.”
Other U.S.players, including railroad executives, are also expected in Berlin, according to Matthias Steckmann, director at Messe Berlin. “This year we expect an increased number of attendees from the U.S.A. Thus 500 mostly senior managers, [involved with] construction, design, and maintenance of railway infrastructure, have agreed totake part. Major railway companies such as Amtrak as well as transport companies from New York, Chicago, New Jersey, and Vancouver (in Canada) are sending numerous representatives to Berlin.”
Steckmann adds that U.S. suppliers Timken, L. B. Foster, Railquip, Loram, Magnus, and Miner are among those expected to attend this year’s event. Beyond that, “The fact that the American Railway Engineering and Maintenance-of-Way Association will take part in InnoTrans for the first time rounds off this picture very positively,” he says.
The Association of American Railroads Thursday announced that the nation’s freight railroads in 2009 averaged 480 ton-miles to the gallon, up significantly from the benchmark of 426 ton-miles used by AAR, Class I railroads, and freight rail supporters throughout North America in recent month to bolster the mode’s environmental credentials.
Ton-miles-per-gallon is the railroad measurement for fuel efficiency, like autos use miles-per-gallon. Overall, freight rail fuel efficiency is up 104% since 1980. In 2009, railroads generated 67% more ton-miles than in 1980, while using less fuel, AAR said.
“I’m pleased to report on Earth Day that the nation’s freight railroads notonly haul the goods that America depends on every day, but they do so while benefiting the environment and reducing our dependence on foreign oil,” said AAR President and CEO Edward R. Hamberger.
While environmental benefits from moving more people and goods by rail are important advantages, fuel efficiency is where it all starts, Hamberger noted, citing the federal government’s finding that railroads are four times more fuel-efficient than trucks. “Railroads are moving more while consuming less fuel, which means we’re emitting fewer greenhouse gases and easing highway congestion.”Railroads use sophisticated on-board monitoring systems to gather and evaluate information to provide engineers with real-time “coaching” and calculate the speed that maximizes fuel savings. Railroads also use innovative freight-carand locomotive designs that cut down fuel consumption, AAR says. “America can save even more fuel by shipping more by train. If just 10% of the long-haul freight currently moving on our crowded highways was moved by rail, annual fuel savings would exceed 1 billion gallons,” Hamberger said. Among other things, railroads have invested billions of dollars in thousands of new, more fuel-efficient locomotives and on overhauling older units to makethem more fuel-efficient. Research also is under way on hybrid long-haul locomotives.
The Investors' Guide to Railroad Freight Cars and Locomotives was created in response to requests submitted to RailSolutions, Inc. for industry specific data related to the equipment employed by North American freight railroads. RailSolutions has announced publication of the 2010-2011 edition.
RailSolutions says it “has compiled a broad baseof railroad industry and equipment-related data which we use in providing general advisory services and in conducting equipment appraisals. We have made aneffort to organize and present this information in a manner which is general enough to cover a broad variety of railroad industry and equipment-related factors,and at the same time, is specific enough to address investment issues related to 14 generalservice and specialty railcar types, and 17 of the most widely used locomotive models.”
The Investors' Guide covers: Equipment descriptions, ownership profiles, age distribution, traffic statistics, historic valuation data, estimated netrental rates, and estimates of future market value.
Copies are availablefrom for $1,600; subscribers to the 2008-2009 edition are entitled to a 20% discount. Company checks can e mailed to RailSolutions, Inc., 1684 Grovedale Court, Suite 200, Alexandria, Va. 22310. For more information, contact RailSolutions at (703) 922-3080; email: email@example.com; website: www.railsolutionsinc.com.
L.B. Foster Co. and Portec Rail Products, Inc. say they are reviewing their options following a judge's action Wednesday enjoining the completion of L.B. Foster's tender offer to acquire all of Portec's issued and outstanding common stock.
The Court of Common Pleas of AlleghenyCounty, Pa., issued the preliminary injunction. Several class action suits have been filed opposing the transaction.
L.B. Foster manufactures and distributes products for the rail, construction, and utility/energy markets at approximately 30 locations throughout the United States.
Portec supplies rail anchors, spikes, friction management products and systems, rail joints, wayside data collection and data management systems, and freight car securement systems. Portec also manufactures material handling equipment.
BNSF Wednesday “introduced” its new Memphis Intermodal Facility in a grand opening ceremony, following a $200 million expansion and rebuilding effort. The facility now will double BNSF’s lift capacity in the Memphis market and improve efficiency while also reducing emissions and helping to improve air quality.
The facility covers 185 acres and will offer a capacity to handle 1 million lifts per year at “full build out,” BNSF says.
Among other intermodal features, the facility is equipped with eight widespan, electric, rail-mounted gantry cranes, which produce zero emissions on site and will significantly reduce the number of hostler trucks needed to move containers within the yard. It also includes a streamlined automated gate system for trucks as they enter and exit, which uses digital cameras to record images of containers, chassis, and tractors. Drivers are also identified using a biometric system. These enhancements have increased security, while improving throughput, reducing truck idling time and emissions by 50%.
“BNSF greatly appreciates the support of all of the political and business leaders who worked with us to make this day possible. That support is an important part of the reason why Memphis has developed into one of the most strategic transportation hubs in the Southeastern U.S.,” said John Lanigan, BNSF executive vice president and chief marketing officer. “BNSF’s significant investment in this new facility will not only make this one of the most efficient and environmentally-friendly intermodal facilities in the country, it will also help improve Memphis’s position in the global supply chain by offering our customers more capacity and service options.”