The Association of American Railroads Thursday again reported a decline in weekly U.S. freight traffic, this time for the week ended Oct. 17, but AAR added that the week marked the one-year anniversary of the current traffic downturn affecting North America’s major railroads.
U.S railroad car traffic was down 15.4% for Week 41, compared with the comparable week in 2008. U.S. intermodal traffic declined 12.6%. Total volume of 31 billion ton-miles was down 13.9% from the comparable period a year ago.
At last year’s Week 41 mark, “notable declines in rail carloads (2.4%) and rail intermodal (2.8%) traffic showed the first significant signs of the nation’s economic downturn. Therefore, year-over-year comparisons for weekly rail traffic may appear to improve going forward,” AAR observed.
Canadian railroads reported carload volume of was down 10.4% from last year, and intermodal fell 11.3%. Mexico’s two major railroads reported carload volume fell 9.5% during Week 41, while intermodal retreated 11.3%.
Combined North American rail volume for the first 41 week sof 2009 on 13 reporting U.S., Canadian, and Mexican railroads was down 18.6% from the comparable timespan in 2008, while intermodal fell a comparable 16.5%.
Knoxville, Tenn.-based Unitrac Railroad Materials, Inc., a specialty trackwork manufacturer and distributor of new and relay rail, said Thursday it has been awarded a contract by Mt. Vernon, Ind.-based Evansville Western Railway (EVWR) to supply 72 panelized turnouts for a project in North Baltimore, Ohio.
Construction at the project location already has started and Unitrac has begun shipping material to the site. The majority of the panelized turnouts that will be supplied by Unitrac will be on wood ties and a portion will be on steel ties. The Northwest Ohio terminal will be built and operated by Evansville Western Railway, an affiliate of CSX.
“Having an opportunity to work this closely with EVWR on a time-sensitive project of this magnitude allows Unitrac to showcase its commitment to providing high-quality specialty trackwork products in a timely manner,” said Ray Lambert, president of Unitrac.
Unitrac Railroad Materials, Inc. is a wholly owned subsidiary of Healey Railroad Corp., which is based in Midlothian, Va.
Union Pacific Corp. Thursday, citing slumping auto business in particular and the global economic downturn in general, reported a 26% decline in third-quarter profit. Earnings of $517 million, or $1.02 a share, were down from $703 million, or $1.38 a share, notched in the third quarter of 2008.
On a profit-per-share basis, UP did eke past consensus Wall Street analyst estimates of $1.01 a share. Wall Street was nonetheless initially disappointed, with shares of UP down more than 4% on the New York Stock Exchange midday Thursday; shares were recovering some of their losses, down just 3.5%, in midafternoon trade.
Revenue, estimated by Wall Street to be $3.73 billion, fell to $3.47 billion for the third quarter, down 25% from $4.63 bllion a year ago. The fall was led by the 30% decline in UP's auto-freight business and a 39% drop in industrial-products movement.
"As we enter the final quarter of 2009, business volumes seem to have stabilized, but at very low levels for Union Pacific," said Chairman and Chief Executive Officer Jim Young, in a statement. "In this weak economic environment, we remain committed to maintaining a strong balance sheet and a solid cash position."
Cubic Transportation Systems, Inc. said Thursday it has completed installation of Miami-Dade Transit’s EASY Card automated fare collection system. The system began operating early this month at the agency’s 22 MetroRail stations, as well as in roughly 900 buses.
The company says it completed the installation in 15 months. The company says it also integrated an automatic passenger counting system on the Metromover.
Cubic's Nextfare Central System provides backend administrative and revenue management capabilities. "Nextfare gives our customers the tools to better manage the data that allows them to adjust their services to meet their customers' needs as well as to manage their operating costs," said Richard Wunderle, senior vice president and general manager for Cubic Transportation Systems.
"This project has been a partnership from the beginning, and we give credit to both our project team and Cubic for driving this to a successful launch," said Harpal Kapoor, director of Miami-Dade Transit. "We're confident our customers will be thrilled with the convenience the EASY Card offers." Cubic Transportation Systems, Inc. is a subsidiary of San Diego based Cubic Corp.
New York’s Metropolitan Transportation Authority is weighing time-of-day pricing for its subway service, offering lower fares (classified as “discounts”) for late-night and weekend use. MTA Chairman Jay H. Walder is advancing the idea, citing its successful implementation in other cities, including London.
A new computerized, scannable fare card would allow MTA New York City Transit to charge passengers different prices depending on the time ofday, Walder said. “We might imagine that we offer discounts at later times, or we offer weekend discounts,” the chairman said in a newspaper interview.“Time-of-day pricing might be very attractive.”
Though the subway is lagging behind even many U.S. rail transit properties on this matter, time-of-day pricing is in place on numerous toll roads, bridges, and tunnels in the New York metropolitan area, and MTA regional railroads traditionally have offered varying fares for peak or off-peak travel. But the city’s subway, which first began running in 1904, historically has charged a flat fee regardless of time of day or of distance traveled.
Denver’s Regional Transportation District has moved to rescind a planned cutback of bus and light rail service originally scheduled to take effect in January, as part of a cost-cutting move. RTD’s Board of Directors had directed staff to come up with service reductions to help balance the agency's budget.
But RTD has since discovered it would receive an unanticipated $23 million in sales-tax proceeds during the next two years because of a change in state law relating to tax collections. Colorado legislators passed a measure earlier this year that eliminated a 3.3% "vendor's allowance" that businesses had been able to deduct from their tax obligation for the timely remittance of sales and use taxes.
A new short line railroad operator, the New Jersey Seashore Lines, began existence this week as rail right-of-way once owned by the Central Railroad of New Jersey (CNJ) was cleared of underbrush in preparation for upgrading.
The 13 miles of right-of-way, owned by the Clayton Sand Co., will be rehabilitated to allow access to the company’s sand mine in Woodmansie, located in the state’s Pine Barrens region. Clayton Sand has contracted with New Jersey Seashore Lines to operate service on the route between Woodmansie and Lakehurst, where ex-CNJ right-of-way is owned by New Jersey Transit Corp.
All grade crossings along the stretch will be upgraded, with funding provided by the state’s Department of Transportation, one source told Railway Age.
The development follows a decision by the Surface Transportation Board Sept. 25 which, in part, noted, “Anthony Macrie (Macrie), a noncarrier individual, filed a verified notice of exemption pursuant to 49 CFR1180.2(d)(2) to continue in control of Cape May Seashore Lines, Inc. (CMSL), an existing Class III carrier, and its corporate affiliate New Jersey Seashore Lines, Inc. (NJSL), upon the latter becoming a common carrier.”
“NJSL concurrently filed a verified notice of exemption ... to operate line of rail ... owned by a shipper, Clayton Companies, Inc. (Clayton) [Editor's note: SIC], but Clayton is not an applicant here,” the decision read. “According to the parties’ filings, after Consolidated Rail Corporation (Conrail) abandoned the line, Clayton acquired it from Conrail in 1985 for use as a private industry track. Clayton has now engaged NJSL to operate the line for 10 years ... NJSL states that it will hold itself out to provide common carrier rail freight service over the line during the 10-year period.”
Princeton, N.J.-based ALK Technologies, Inc. has announced the availability of PC*MILER|Rail 16, its latest software update for rail routing, mileage, and mapping. The company says its close working relationship with all major railroads has resulted in the most accurate digital representation of the current North American rail network.
Version 16 contains enhanced features such as extensive data update of rail freight stations, railroads, interline routing, and track ownership rights, as well as the CN and CP post-merger systems.
PC*MILER|Rail, when used together with PC*MILER, can be used to analyze intermodal alternatives to truck-only moves, according to ALKTechnologies’ Mark Hornung, senior vice president, Operations. “Using the new PC*MILER Intermodal Analysis template, shippers and logistics providers can now find nearby ramps, compare truck and rail-intermodal mileage, as well as estimate savings in fuel consumption and greenhouse gas emissions,” Hornung says.
ALK Technologies notes all Class I railroads have adopted PC*MILER|Rail for their mileage calculations, as have most rail car lessors and large rail shippers.
Canadian National Wednesday said it has placed orders for 70 new high-horsepower locomotives from both GE Transportation and Electro-MotiveDiesel, Inc. (EMD). CN will acquire 35 ES44DC locomotives (top) from Erie, Pa.-based GE Transportation, beginning in the fourth quarter of next year, and 35 SD70M-2s from LaGrange, Ill.-based EMD beginning in January 2011.
The GE locomotives produce 4,400 horsepower; the EMD units generate 4,350 horsepower.
All the new units are part of CN’s multiyear locomotive-renewal program aimed at continuously increasing fuel efficiency, improving service reliability for its customers, and reducing greenhouse-gas emissions.
The new locomotives also will be equipped with distributed power (DP) capability. DP enables remote control of a locomotive or locomotives throughout a train from the lead control locomotive.
Lower volumes contributed to a drop in CN's third-quarter 2009 earnings. Net income declined to
C$461 million, or C$0.97 per diluted share, from year-earlier net income of
C$552 million, or C$1.16 per diluted share, “largely as a result of lower
freight volumes stemming from depressed North American and global economies,” CN reported. Operating revenues declined 18% to C$1.845 million; carloads declined 15%; and
revenue ton-miles declined 11%. Operating expenses
declined 18% to C$1.156 million, reflecting lower year-over-year fuel
prices and cost-containment measures in response to lower traffic. Operating income declined
18% to C$689 million, while the operating ratio was essentially flat at
However, CN's nine-month 2009 free cash
flow increased to C$657 million from the C$483 million generated during the
comparable period of 2008.
Net income for the third
quarter of 2009 and third quarter of 2008 included deferred income tax
recoveries of C$15 million, or C$0.03 per diluted share, and C$41 million, or
C$0.09 per diluted share, respectively. The recoveries in both years resulted
from the resolution of various income tax matters and adjustments related to
tax filings of prior years. Excluding these items, adjusted third-quarter 2009
net income was C$446 million, or C$0.94 per diluted share, compared with
year-earlier adjusted net income of C$511 million, or C$1.07 per diluted share,
a reduction of 12% in diluted earnings per share.
The year-over-year increase
in the U.S. dollar relative to the Canadian dollar affected the conversion of
CN's U.S.-dollar-denominated revenues and expenses, increasing third-quarter 2009
net income by approximately C$15 million, or C$0.03 per diluted share.
E. Hunter Harrison,
president and chief executive officer, said: “The third quarter of 2009
was another challenging one for CN, with significant weakness across markets
affecting our freight volumes. Revenue ton-miles for the quarter declined 11%, but that was a sequential improvement over the 14% RTM
reduction in the second quarter of this year. The CN team continued
to focus on cost containment and productivity improvements during 3Q-2009. And
the team delivered. We kept the operating ratio essentially flat at 62.7% and made solid operational gains: System train speeds improved again,
rising 11% year-over-year, while the average dwell time for freight cars
in our classification yards across the railroad declined by 9% from a
year earlier. Equally important, our accident rate improved by 8%
over the same period of 2008. It appears that
several of our markets may have hit bottom. Our productivity gains during 2009
position us well for the eventual recovery in traffic.”
CN said its reduction in
third-quarter 2009 revenues largely resulted from significantly lower freight
volumes in almost all markets as a result of prevailing economic conditions in
the North American and global economies; and the impact of a lower fuel
surcharge due to year-over-year decreases in applicable fuel prices, as well as
lower freight volumes. Partly offsetting these factors were the positive
translation impact of the weaker Canadian dollar on U.S.-dollar-denominated
revenues and freight rate increases.
All CN commodity groups saw
revenue declines: metals and minerals, 32%; automotive, 25%;
forest products, 24%; intermodal, 20%; petroleum and chemicals, 11%; coal, 9%; and grain and fertilizers, 9%.
Rail freight revenue per
revenue ton-mile decreased by 9% in the
third quarter, largely due to the impact of a lower fuel surcharge and an
increase in the average length of haul. These factors were partly offset by the
positive translation impact of the weaker Canadian dollar and freight rate
CN's 18% decline in
operating expenses was primarily due to lower fuel costs, reduced expenses for
purchased services and material, and lower casualty and other expenses. These
factors were partially offset by the negative translation impact of the weaker
Canadian dollar on U.S.-dollar-denominated expenses.
“Looking ahead, CN’s prospects for the long-term are favorable as a long freight recession appears to be nearing an end,” said Dahlman Rose Director-Equity Research and Railway Age Contributing Editor Jason Seidl. “The company noted that it sees signs of improvement in the environment and that business volumes have likely reached bottom. Specifically, CN cites sequential improvements in steel production, iron ore and chemicals. The company should emerge from the recession with a much firmer grip on operating costs and ample capacity to meet a potential turnaround in freight volumes. We believe that CN is well positioned to readily accommodate a 15-20% surge in traffic from current levels without having to significantly increase operating expenses. CN continues to be a way for investors to own a ‘best in class’ company that continues to generate strong free cash flow in a difficult operating environment.”