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CSX’s Profit, Revenue Increased in Second Quarter

July 16th, 2013

CSX today reported net income in the second quarter of 2013 was $535 million, rising 4.5 percent from $512 million in the second quarter of 2012.

The gain resulted from overall revenue growth, service and efficiency results, and a few additional items, such as tax and real estate, the company said.

Revenue in the second quarter was almost $3.1 billion, improving slightly from the second quarter last year, driven by increases in volume and pricing. The Class I railroad noted that increases in merchandise and intermodal volume more than offset drops in coal.

Quarterly operating income was $963 million, while the operating ratio was 68.6 percent. CSX said it remains on track to achieve its goal of sustaining a high-60s operating ratio by 2015, while remaining focused on attaining a mid-60s operating ratio over the longer term.

“CSX continues to drive solid growth in many of its markets and is encouraged by the team’s sustained track record of delivering excellent operating performance in a wide range of market conditions,” said Michael J. Ward, chairman, president and CEO, in a written statement. “We remain sharply focused on creating strong, sustained value for customers and shareholders, as the economy appears to be slowly gaining strength.”

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Wabtec Secures Mauritanian Order

July 16th, 2013

Wabtec subsidiary Standard Car Truck will supply bogies for new iron ore freight cars to SNIM, the National Industrial and Mining Company of Mauritania.

Wabtec Corp. has signed a $21 million contract with SNIM, under which its subsidiary will provide bogies and related spare parts for the cars. The railroad equipment maker expects to complete deliveries of the components in 2014.

“This contract demonstrates the global scope and capabilities of our freight rail operations,” said Albert J. Neupaver, chairman and CEO of Wabtec, in a written statement. “We believe Wabtec will continue to benefit as countries around the world continue to invest in their freight transportation systems and infrastructure.”

SNIM operates a railway and various mining operations in Mauritania, and it has plans to increase its iron ore shipments over the next three years.

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FreightCar America Names Poepping VP of Sales

July 15th, 2013
Mark B. Poepping

Mark B. Poepping

FreightCar America, Inc., has hired Mark B. Poepping as vice president sales, effective today.

“We are pleased to have Mark join our sales group as we continue to expand our portfolio of railcar designs.  His background and expertise within the railcar industry brings strength to this part of our business,” said Ted Baun, senior vice president marketing and sales for FreightCarAmerica, in a written statement.

Poepping has 29 years of experience in railroad industry companies. He comes to FreightCar America’s sales group from serving as director of railcar sales at Navistar. Poepping is based in Evergreen, Colo.

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Genesee & Wyoming’s Rail Traffic Continues to Rise

July 15th, 2013

Genesee & Wyoming reported combined rail traffic in June, including North American and Australia rail traffic, was 155,757 carloads, dropping 7 percent month-over-month, but jumping 104.5 percent compared with June 2012, prior to its acquisition of RailAmerica.

Notably, June traffic was also up 5.7 percent year-over-year, versus the 147,375 carloads handled by G&W and RA combined in June 2012. This year-over-year increase, however, was lower than the 10 percent year-over-year climb in May and the 7 percent increase in April.

G&W’s June 2013 North American rail traffic rose 130 percent from June 2012, but dropped 7.3 percent month-over-month, reaching 134,685 carloads. The decline was the first month-over-month drop since February. North American traffic in June was 3.7 percent higher than the combined total of 129,817 carloads handled by G&W and RA in June 2012, which was also much lower than May’s increase of nearly 10 percent.

The company’s Australian rail traffic was up 20 percent year-over-year, but down 5 percent month-over-month in June, the first monthly drop since January. Volume slipped to 21,072 carloads for the month. Australia rail traffic was unaffected by the purchase of RailAmerica.

Meanwhile, G&W’s year-to-date traffic of 931,283 carloads spiked 105 percent compared with the first six months of 2012. North American rail volume in the first half of 2013 totaled 812,077 carloads, improving 131.5 percent from the same period in 2012, while Australia rail traffic reached 119,206 carloads, increasing 15 percent.

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Pacific Harbor Line, Union Ink Five-Year Agreement

July 15th, 2013

Pacific Harbor Line and the Brotherhood of Locomotive Engineers and Trainmen have entered into a new five-year labor deal covering PHL’s operating and maintenance-of-way employees.

The pact was ratified and signed by PHL employees on July 4 at the railroad’s Family Day celebration. It included wage increases; an employee contribution to health care; and modification of some rules regarding profit sharing, overtime, the selection of job assignments and productivity.

BLET’s Division 214 in Long Beach, Calif., has represented PHL’s employees since the railroad was formed in 1998. Union employment on this property has grown from 27 employees initially to nearly 120 in the past 15 years.

“This was a win-win agreement reflecting teamwork, persistence and determination by both parties,” said Otis Cliatt II, PHL’s president, in a written statement. “PHL and its workforce are committed to providing stellar freight railroad service to the ports of Los Angeles, Long Beach and the San Pedro Bay port community.”

“Sometimes the wheels of progress move slowly and it took us a few years to get this agreement right,” added Bill Hannah, BLET general chairman. “But in the end, the company made some essential changes and we negotiated the best agreement possible for our membership, which allowed us to achieve ratification.”

Hannah also noted that a key component of the agreement is an enhanced profit-sharing provision, which “greatly improves” the earning power of BLET members.

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Canadian Pacific to Transport K+S Potash Canada’s Products

July 12th, 2013

K+S Potash Canada and Canadian Pacific have entered into a contract for the transportation of potash products from K+S’s Legacy site, near Moose Jaw and Regina in Saskatchewan.

The long-term, volume-based contract is for potash to be moved from the Legacy site to an export port in Western Canada for overseas destinations and via CP’s network to domestic Canadian and U.S. markets. It was signed in K+S Potash Canada’s headquarters in Saskatoon.

“We are glad to have found Canadian Pacific as the perfect partner and strategic fit for our transportation needs in Canada,” said Ulrich Lamp, president and CEO of K+S Potash Canada, in a written statement.

“Canadian Pacific is extremely pleased to be a partner with K+S Potash Canada in providing the capability to move potash to market via our rail-direct network,” added Keith Creel, president and chief operating officer of the Class I railroad.

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Jaxport Plans Informational Session for Interested Rail Yard Operators

July 11th, 2013

The Jacksonville Port Authority is planning an informational forum for those interested in opportunities regarding management, maintenance and operations of a new Intermodal Container Transfer Facility.

Jaxport is developing the facility at the Dames Point Terminal to support the direct transfer of containers between vessels and trains. It will offer direct access to CSX Transportation rail lines and the U.S. Interstate highway system. The ICTF will complement existing on-dock-rail access at the JPA’s Talleyrand and Blount Island terminals. It is expected to open within the next few years.

The informational forum is scheduled for Thursday, August 8, from 10:00 a.m. through noon at the Jaxport Cruise Terminal, 9810 August Drive, Jacksonville, Florida 32226. Interested parties should RSVP to LeNedda Edwards; phone: (904) 357-3017; e-mail: lenedda.edwards@jaxport.com.

[Updated because the forum has been rescheduled from July 25 to August 8.]

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Pace of Growth in Rail Delivery of US Oil Products Slows

July 11th, 2013

The U.S. is relying more on railroads to move crude oil to refineries and storage centers, as its crude oil production is outpacing pipeline capacity, although that pace has slowed, according to the U.S. Energy Information Administration, based on data from Association of American Railroads.

AAR reported that the amount of crude oil and refined petroleum transported by U.S. railroads totaled nearly 356,000 carloads during the first half of 2013, jumping 48 percent compared with the same period last year. (Note that this figure excludes traffic carried by U.S. subsidiaries of Canadian railroads; those volumes are included in the Canadian traffic report.) In its latest Rail Time Indicators report, AAR noted that U.S. carloads of petroleum and petroleum products, including crude oil, in June were up 31.7 percent from the level in June 2012, the smallest year-over-year monthly increase for this commodity group in 16 months.

U.S. weekly carloadings of crude oil and petroleum products averaged nearly 13,700 rail tankers during the first six months of 2013. With one carload holding about 700 barrels, the amount of crude oil and petroleum products shipped by rail was equal to 1.37 million barrels per day during the first half of the year, compared with 927,000 barrels per day during the same period last year. Crude oil accounts for about half of those 2013 daily volumes, according to AAR.

Therefore, in 2013, rail moved about 700,000 barrels per day of imported and domestic crude oil, versus the 7.2 million barrels of crude oil the U.S. produces daily.

The U.S. Energy Information Administration said that the pace of rail moving crude oil and petroleum products has decreased from May to June, driven by a jump in crude oil production from North Dakota, which reduced the incentive to ship oil to coastal refineries, as well as a lack of railcars.

The data also follows a recent train disaster in Quebec that prompted a debate about the safety of shipping crude oil by rail or pipelines.

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Watco’s Ann Arbor Railroad Aims to Lease Toledo-Area Trackage

July 11th, 2013

Ann Arbor Railroad, Inc., has filed with the Surface Transportation Board for permission to lease approximately 3.69 miles of track in Toledo, Ohio, from Norfolk Southern.

In an agreement signed between AA and NS, the Watco Companies railroad holds a 10-year lease to operate between mileposts CS 1.26 and 2.65 on the Cherry Street Branch and between mileposts GY 85.40 and 87.70 on the Galena Yard Track. Both lines connect with the AA at the south end of its Ottawa Yard facility in Toledo. The line handles approximately 925 annual carloads and will be operated by the AA five days per week.

Operations are expected to begin in August, pending the outcome of the Surface Transportation Board’s review.

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Court Rules Against Alabama’s Fuel Tax on Rail Carriers

July 11th, 2013

Alabama’s imposition of a sales and use tax on diesel fuel purchased by rail carriers has been labeled discriminatory by the Eleventh Circuit Court of Appeals.

Citing the Railroad Revitalization and Regulatory Reform Act of 1976, CSX Transportation said that Alabama’s tax on diesel fuel for rail carriers was discriminatory because fuel purchased by interstate motor and water carriers was exempt from the 4 percent tax, according to Ryan, a tax services firm. The Circuit Court concurred that the tax appeared to be discriminatory and shifted the burden to the state to prove “sufficient justification” for taxing rail carriers differently, which Alabama failed to do.

As a result, the court remanded the case, CSX Transportation, Inc. v. Alabama Department of Revenue, to the U.S. District Court for the Northern District of Alabama, directing it to enter declaratory and injunctive relief in favor of CSX.

It is the second time that the case has been before the court. An earlier decision of the court holding that a rail carrier could not challenge its competitors’ exemptions from sales and use tax under the 4-R Act was reversed by the U.S. Supreme Court on Feb. 22, 2011.

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