The Association of American Railroads (AAR) has reported an increase of 1.2 percent in U.S. rail traffic for the week ending April 18, 2015, compared to the same week in 2014. Carloads and intermodal units totaled 556,432 for the week.
U.S. carloads, with a total of 276,416 for the week, were down by 4.9 percent compared to the same week last year. U.S. intermodal volume, with a total of 280,016 units, was up by 8.1 percent compared to 2014. Intermodal units had the second highest week on record, with container and trailer traffic exceeding carloads for the first time in a one-week period.
Six of the 10 carload commodity groups that are tracked by the AAR increased for the week ending April 18, 2015, when compared with the same week in 2014. Motor vehicles and parts had the highest increase, up 7.2 percent to 18,008 carloads. Grain showed the highest decrease in the commodity groups, with a drop of 15.8 percent to 18,166 carloads, and coal followed with a 12.6 percent decline to 99,482 carloads.
For the first 15 weeks of 2015, U.S. rail volume totaled 8,048,945 carloads and intermodal units, a 0.1 percent increase when compared to last year. Carloads, with a total of 4,208,741, were down by 0.7 percent, and intermodal was up by 1 percent to 3,840,204 units.
On the 13 reporting U.S., Canadian and Mexican railroads, combined North American rail volume for the week ending April 18, 2015, was 728,211 carloads and intermodal units, an increase of 1.9 percent.
For the first 15 weeks of 2015, North American rail volume was up by 1.5 percent, with a total of 10,499,143 carloads and intermodal units.
U.S. Senators Charles Schumer (D-N.Y.) and Richard Blumenthal (D-Conn.) have introduced the Positive Train Control (PTC) Safety Act, S.1006, which calls for PTC to be implemented by 2018. The legislation was also sponsored by Senators Dianne Feinstein (D-Calif.), Barbara Boxer (D-Calif.) and Kirsten Gillibrand (D-N.Y.)
Included in the bill are improved practices for rail inspections, enhanced safety at grade crossings and work zones, and ensuring trains carrying crude oil or ethanol run on tracks with PTC. It also calls for increased transparency of PTC implementation.
“The Positive Train Control Safety Act will require railroads, including both passenger and freight trains, to implement PTC by 2018 and the legislation makes sure railroads are transparent about their efforts and requires regular status updates on implementation,” said Senator Schumer.
Senator Blumenthal stated that the bill will ensure that railroads are “… moving forward to install PTC, receiving deadline extensions only on a case-by-case basis and year-by- year, and only if factual evidence shows a valid, credible need for more time.”
The senators urged Congress to pass this legislation so that railroads speed up implementation of the important new technology that will help slow down trains in the event of an emergency.
The PTC Safety Act is the second bill to be introduced this year regarding the upcoming December 2015 deadline for PTC implementation. In March, Senator Roy Blunt (R-Mo.) introduced the Railroad Safety and Positive Train Control Extension Act that called for extending the deadline for implementing PTC to 2020.
Canadian Pacific Railway Limited (CP) and Canadian National Railway Company (CN) have reported 2015 first quarter financial results, with both rail companies seeing increases over the first quarter of 2014.
CP had the highest-ever net income for a quarter with a total of C$320 million, or C$1.92 per diluted share, an increase of 33 percent over the 2014 first quarter. Adjusted earnings per share improved 59 percent to C$2.26 and revenues increased by 10 percent to a first quarter record of C$1.67 billion. The company also reported an operating ratio of 63.2 percent, an 880-basis-point improvement and the lowest first-quarter operating ratio in the company’s history.
“CP’s success in the first quarter of the year is the result of hard work by its people and a business model that responds nimbly to any shift in economic conditions,” said CP CEO E. Hunter Harrison. “CP’s relentless focus on rail safety and cost control has created a solid foundation for growth, innovation and creative collaboration with customers.”
“The diversity of the business and efficiency of CP’s network and team has the company well positioned for the rest of the year,” Harrison added. “Amid persistent uncertainty in the pace of the North American economic recovery, CP continues to demonstrate the ability to recognize and capitalize on new business opportunities and operational efficiencies.”
For the first quarter of 2015, CN reported a net income of C$704 million, or C$0.86 per diluted share, an increase of 28 percent when compared to the first quarter of 2014. Diluted earnings per share (EPS) increased 30 per cent to C$0.86 and revenues increased 15 percent to C$3,098 million.
For the 2015 first quarter compared to the same quarter last year, revenue ton-miles grew by seven percent, carloadings increased nine percent, and operating income increased 30 percent to C$1,063 million. CN also saw its operating ratio improve by 3.9 points to 65.7 percent from last year’s first quarter of 69.6 percent.
CN President and CEO Claude Mongeau said, “CN turned in a solid first-quarter performance thanks to strong freight demand and continued productivity improvements, helped in part by easier winter conditions compared with last year’s polar vortex.”
“CN is pleased to affirm its outlook for double-digit EPS growth in 2015 versus last year’s adjusted diluted EPS of C$3.76, despite weaker than expected energy markets and a mixed economy,” Mongeau stated.
“As always we remain committed to growing our business faster than the overall economy and doing so at low incremental cost. We are equally committed to running a safe railway and are increasing our 2015 capital envelope by C$100 million to C$2.7 billion to sustain additional rail infrastructure safety investments,” concluded Mongeau.
Effective May 1, Bruno Maestri and Robert E. Martinez will assume additional responsibilities for Norfolk Southern Corp., following the retirement of F. Blair Wimbush, the railroad’s vice president real estate and corporate sustainability officer.
Norfolk Southern CEO Wick Moorman stated that the changes are part of an ongoing program of executive development, supporting the railroad’s efforts to reduce its environmental footprint and expand market opportunities.
Wimbush joined Norfolk Southern in 1980. He served in several positions in the law department before being named vice president real estate and corporate sustainability officer in 2007. He lead the company’s efforts to adopt an enterprise-wide, results-driven approach to moderating its impact on the environment. Wimbush is a graduate of the University of Virginia School of Law.
“Blair’s contributions are reflected both in the personal environmental efforts our people make every day, as well as in our broad-based achievements that range from meaningful reductions in fuel and energy consumption to our “Trees to Trains” program for reforesting a large part of the Mississippi Alluvial Valley,” said Moorman. “He retires with our gratitude for a much cleaner, much greener, and far more environmentally-conscious railroad.”
Bruno Maestri, current vice president government relations and corporate communications, will take the position of vice president government relations, corporate communications, and corporate sustainability officer. He will continue to be responsible for federal legislative and regulatory affairs, state relations, community affairs, and corporate communications, in addition to new responsibilities relating to sustainability programs such as locomotive fuel efficiency and emissions, energy use, land conservation, waste management, and water conservation.
Maestri joined Norfolk Southern in 1995, serving in several positions involved in environmental management and protection, and public affairs. He was appointed to his current position in 2005. He holds degrees from the University of Virginia. Maestri is based in Washington, D.C.
Robert E. Martίnez, current vice president business development, is appointed vice president business development and real estate. His current responsibilities will continue, including business development, market research, ports and international, and industrial development. In his new position he will also be responsible for work relating to Norfolk Southern’s real estate services, including purchase, sale, and development of property; natural resource management; and projects associated with wire, pipeline, and fiber optics.
Martίnez was employed by Norfolk Southern for a year before serving as Secretary of Transportation of Virginia for four years. He rejoined the company in 1998 and held several marketing positions before being appointed vice president business development in 2003. He holds degrees from Columbia and Yale. Martίnez is based in Norfolk, Va.
Ricardo, a global engineering and environmental consultancy group, has signed an agreement to acquire Lloyd’s Register Rail (LR Rail) from Lloyd’s Register Group for £42.5 million, subject to adjustment. The agreement includes the business, operating assets and employees of Lloyd’s Register Rail Limited, Lloyd’s Register Rail Europe B.V. and other assets relating to the rail business. The acquisition will be completed on or before July 1, 2015.
Ricardo will operate the acquisition with its own existing rail group to form the new international rail business Ricardo Rail, which will provide technical consulting and assurance services to the rail sector. Current LR Rail managing director Paul Seller will serve as managing director to Ricardo Rail.
Ricardo plc CEO Dave Shemmans said, “I’m delighted to be able to announce today’s share and asset purchase agreement with Lloyd’s Register Group and look forward to welcoming LR Rail’s employees to the global Ricardo team and am excited about the prospects for the new Ricardo Rail business under the leadership of Paul Seller.”
“LR Rail has an impressive market reputation and a very similar culture of quality and excellence in engineering to that of Ricardo, and will be an exceptionally good fit with Ricardo in terms of culture, geography, product offering and business model,” added Shemmans.
Paul Seller, future managing director of the new Ricardo Rail, said, “We have an excellent team and a strong reputation in the industry, and I believe that in Ricardo, we have an ideal new owner which shares our strategic vision to create a truly global rail business.”
“Today’s announcement is exciting news for the employees and customers of both LR Rail and Ricardo,” stated Seller. “We look forward to forming the new Ricardo Rail business and on working together to create a truly global rail business that uses its independence, passion and understanding of critical and complex technologies to add value to our clients, making us integral to their future success.”
LR Rail is a rail consultancy and assurance group with a staff of 440 rail engineers and specialists located at offices across Europe, Asia and the Middle East. The company had revenues of £48.1 million in 2014. Services range from rolling stock design, signaling and train control, intelligent rail systems, operational efficiency improvement, training and independent assurance services.
Norfolk Southern will be begin its 21st Century Steam program by welcoming a Class J 611 locomotive, which returns under steam on May 30 from its second restoration to headline excursions in 2015.
The engine was built at Norfolk & Western Railway shops in Roanoke, Va., and entered service on May 29, 1950. The engine, now owned by the Virginia Museum of Transportation (VMT) in Roanoke, has been undergoing restoration at the North Carolina Transportation Museum in Spencer, N.C., since June 2014.
Norfolk Southern Chairman and CEO Wick Moorman launched the plans for 21st Century Steam in 2010. Moorman and Norfolk Southern President Jim Squires will be aboard a J-powered train to escort the Class J 611 from Spencer, N.C.
The Southern Railway 4501 and Nickel Plate Road 765 locomotives will also power excursions for the program.
VMT, the Tennessee Valley Railroad Museum (TVRM) and the Fort Wayne Railroad Historical Society join Norfolk Southern in sponsoring the excursion trips between June 6 and October 11. Tickets and schedule details will be available on the websites of trip sponsors.
CN will invest approximately C$500 million in a multi-year program improving feeder rail lines in Western Canada, which have seen an increase of more than 50 percent in freight volumes over the past five years. The program will be used to increase the capacity and safety of the line infrastructure in Alberta, Manitoba, and Saskatchewan
“CN is building for the future with large capital investments in long-term safety and capacity improvements to ensure it continues to play its role as a true backbone of the economy,” said CN President and CEO Claude Mongeau.
Approximately C$100 million of the program will be invested in 2015 for work on northern Alberta branch lines, including heavier rail, crushed rock ballast and new ties, to accommodate freight volume growth in the Peace River region.
“CN sees significant long-term potential in its customer base located on its Western Canada feeder network,” stated Mongeau. “We want to provide our customers with the capacity for continued efficient freight transportation services that increase their competitiveness in North American and global markets, as well as ensure our rail infrastructure is as safe as possible.”
“CN believes that commercial principles and a stable regulatory environment are essential to support rail infrastructure investment and maintain Canada’s safe, efficient and well-functioning rail transportation marketplace in the future,” concluded Mongeau.
The company has already improved its Edmonton-Winnipeg main line corridor with sections of double track, extended sidings and improved major classification yards.
On April 27, Union Pacific will increase train speed from 60 miles per hour to a new maximum speed limit of 70 miles per hour on 15 miles of rail line between Chowchilla and Madera, Calif., following recent track upgrades that meet or exceed applicable Federal Railroad Administration (FRA) standards.
With $3.2 million in track improvements made on the line, Union Pacific has met the FRA’s required inspection, maintenance and engineering standards to implement this speed increase. The increased speed will enable more effective delivery of goods as well as reduced motorist wait time at crossings.
From 2009 through 2013, Union Pacific invested more than $1.4 billion in California’s rail infrastructure alone. The company plans to spend a record $4.3 billion across its network this year, following investments of more than $31 billion from 2005 through 2014. These investments contributed to a 38 percent decrease in derailments over the last 10 years, according to the company.
CSX Corporation has reported an increase of 11 percent for the company’s 2015 first quarter net earnings of $442 million compared to $398 million in the first quarter of 2014. Earnings per share were also up, with a 13 percent increase to $0.45 when compared to $0.40 per share recorded in the 2014 first quarter.
Revenue totaled $3 billion for the quarter, due to growth across many markets and an improved pricing environment, partially offset by the impact of low natural gas prices, lower fuel recoveries and a strong U.S. dollar.
Lower fuel prices and cost-saving initiatives offset higher inflation and volume-related costs in the quarter, resulting in an operating income increase of 14 percent to $843 million and an operating ratio improvement of 330 basis points to 72.2 percent.
The CSX board of directors has approved a 13 percent increase to $0.18 per share in the quarterly dividend and a new share repurchase program.
“In this dynamic economic and business environment, CSX’s core earnings remain strong and we are continuing our drive to provide excellent service for our customers and value for our shareholders,” said CSX Chairman and CEO Michael J. Ward. “Our commitment and confidence in CSX’s future is underscored by the positive shareholder actions we’re taking today.”
The Toronto Transit Commission (TTC) has awarded the Bechtel Canada Co. a project management contract worth up to C$80 million for the Toronto-York Spadina Subway Extension (TYSSE). The extension will connect the existing TTC subway system to the municipality of York. The 8.6 km line will include six new rail stations and is expected to begin service at the end of 2017.
The contract value to Bechtel is based on staffing costs, management fees and incentives for completing the extension by December 31, 2017. Bechtel has started work on the project and will form an integrated team with existing TTC personnel. Bechtel’s project director will report directly to TTC CEO Andy Byford. The contract expires March 31, 2018.
The Toronto-York Spadina Subway Extension project is jointly funded by the Government of Canada, the Province of Ontario, the City of Toronto, and The Regional Municipality of York. The estimated cost of the project is C$2.6 billion.