Business executives, especially those who reach the top rung becoming president and CEO of Fortune 500 corporate railroads, do not get told what to do all that often.
That is exactly what happened today when the Secretary of the Department of Transportation, Pete Buttigieg and Acting Secretary of the Department of Labor Julie Su dropped a couple of letters on the desks of CN CEO Tracy Robinson and CPKC CEO Keith Creel!
Most railroaders are familiar with that unique pit in your stomach you get when you see that you have registered mail you need to sign for. At the CN and CPKC railroads, the top execs got to experience that special feeling today. The Biden-Harris administration called them out for not giving rail workers the paid sick days they were told to!
The letters, which you can read below, pointed out that Buttigieg, Su, and, by extension, the president, are angry that our men and women have not been given the dignity of having the same paid sick leave protections as 80% of the workers in our country.
Su and Buttigieg discussed the fact that the other four U.S.-based Class I railroads have all begun working with rail labor to provide this sick time. Some of them have paid sick leave in place for every organized craft in their companies. They also looked to cut off the line of excuses they anticipated hearing from the railroads.
“As illness is not bound by any season, including national bargaining cycles, we encourage you to engage in these discussions today. This does not have to wait for national negotiations; your railroad should come to terms immediately with your labor unions.”
The secretaries pointed out that the lack of sick days was not only inconsistent with the rest of our industry and working population but also is not in the best interest of rail safety overall, saying, “ In an industry where workers’ constant attention is required to keep themselves and others safe, not providing workers sick days presents unnecessary risk that your company can fix.”
If the letter hadn’t already succeeded in getting the rail executives’ attention, it probably accomplished that goal by ending with, “As our administration has noted, we are not satisfied with the current trajectory of railroad safety in America and see no reason for the delay in making the rail industry safer.”
The final shot over the bow that let Creel and Robinson know that Buttigieg and Su meant business is that under their signature line, the hits kept coming. That is where SMART-TD President Jeremy Ferguson, along with the presidents of other rail labor organizations were cc’d. So not only did they know they were in the crosshairs of the U.S. president, but that his administration let the biggest rail union in the country and our brothers and sisters across rail labor in on their communication.
On behalf of our CN and CPKC members, SMART-TD would like to thank Secretary Buttigieg and Acting Secretary Su for their continued support and that of President Biden.
We can’t agree any more with the contents of your letter and appreciate your willingness to press for fair treatment of rail professionals and our safety.
UPDATE (Aug. 23, 2024): The Canadian government acted to intervene in the rail dispute in Canada the evening of Aug. 22. We are continuing to monitor the situation and will update our guidance to members as time passes.
As many of you are aware, a significant situation is unfolding across our northern border. It’s important for all SMART Transportation Division members to understand what this means and how it could impact us.
Solidarity with our Canadian brothers and sisters
SMART-TD stands firmly in solidarity with our Canadian colleagues who are working to negotiate an equitable agreement. We recognize the challenges they are enduring and support their fight for fair working conditions. Our Canadian brothers and sisters are standing firm, and we are committed to supporting their cause.
Current impact and future risks
At this time, major disruptions to American rail traffic have not occurred. However, this situation has the potential to impact our operations significantly if the flow of freight between the U.S. and Canada is interrupted for a long period as the result of a labor dispute. Rail’s busiest season is just around the corner, and any ongoing disruption could lead to delays and logistical challenges for us.
The Aug. 22 lockout
Canadian rail carriers chose to implement a work stoppage while grain is still in the fields and before the holiday rush for commercial goods. This timing is likely aimed at minimizing complications related to the movement of these critical commodities during peak periods. The Canadian government intervened, and rail labor in Canada has announced its intention to strike. The situation is very fluid and can change quickly, as it did hours after the lockout was announced Aug. 22.
What we can do
As members of SMART-TD, it is essential for us to stay informed about the situation and to support our Canadian colleagues. We need to be vigilant and prepared for any potential impacts on our own operations and advocate for a resolution that respects workers’ rights and ensures fair treatment across the industry.
For SMART-TD members who interchange with Canadian railroads at our national border, it is important to remember your rights in this situation. SMART-TD’s office wants all our crews to be fully aware of their rights to abstain from duties that jeopardize their safety. In the event that you encounter a picket line, Section 92 of Article 21B in the SMART Constitution states that “When a strike of any other nationally recognized labor organization is in effect and danger to the safety of our members exists in or about the area affected by the strike, and/or if there exists any substantial present or potential threat of danger to the members en route to or from their work, and/or to the members’ families, it is the policy of SMART to support its members in declining to enter the territory directly affected.”
If you are ordered to perform duties that include crossing a picket line that puts your safety at risk, you must immediately inform management that you are not willing to do so., You should then inform your local chairperson and give them a detailed explanation of the series of events.
In solidarity, we will continue to monitor the situation closely and update you on any developments. Let’s remain united and proactive, ready to address any challenges that may arise from this lockout.
Thank you for your continued support and commitment..
4th Quarter 2021 Net Earnings: Increased 13% to $1.7 billion from $1.5 billion Diluted Earnings Per Share:n/a – BNSF is not publicly traded Revenue:Increased 11% to $6.3 billion from $5.7 billion Operating Income:Increased 12% to $2.4 billion from $2.2 billion Operating Expenses:Increased 10% to $3.9 billion from $3.5 billion Operating Ratio:Improved to 60.0% from 60.3%
2021 Annual Earnings Net Earnings: Increased 16% to $6.0 billion from $5.2 billion Diluted Earnings Per Share: n/a – BNSF is not publicly traded Revenue: Increased 12% to $23.3 billion from $20.9 billion Operating Income: Increased 14% to $8.8 billion from $7.7 billion Operating Expenses: Increased 10% to $14.5 billion from $13.1 billion Operating Ratio: Improved to 60.9% from 61.6% Read BNSF’s full earnings report.
4th Quarter 2021 Net Earnings: Increased 17% to C$1.20 billion from C$1.02 billion Diluted Earnings Per Share: Increased 18% to $1.69 per share from $1.43 per share Revenue: Increased 3% to C$3.75 billion from C$3.66 billion Operating Income: Increased 11% to a record C$1.57 billion from C$1.41 billion Operating Expenses: Decreased 1% to C$2.19 billion from C$2.25 billion Operating Ratio: Improved 3.1 points to 58.3% from 61.4%
2021 Annual Earnings Net Earnings: Increased 37% to C$4.90 billion from C$3.60 billion Diluted Earnings Per Share: Increased 38% to $6.89 per share from $5.00 per share Revenue: Increased 5% to C$14.48 billion from C$13.82 billion Operating Income: Increased 18% to C$5.62 billion from C$4.78 billion Operating Expenses: Decreased 2% to C$8.86 billion from C$9.04 billion Operating Ratio: Improved 4.2 points to 61.2% from 65.4% Read CN’s full earnings report.
4th Quarter 2021 Net Earnings: Decreased 34% to C$532 million from C$802 million Diluted Earnings Per Share: Decreased 38% to $0.74 per share from $1.19 per share Revenue: Increased 1% to C$2.04 billion from C$2.01 billion Operating Income: Decreased 10% to C$832 million from C$928 million Operating Expenses: Increased 11% to C$1.21 billion from C$1.08 billion Operating Ratio: Worsened 530 basis points to 59.2% from 53.9%
2021 Annual Earnings Net Earnings: Increased 17% to C$2.9 billion from C$2.44 billion Diluted Earnings Per Share: Increased 16% to $4.18 per share from $3.59 per share Revenue: Increased 4% to C$8.0 billion from C$7.71 billion Operating Income: Decreased 3% to C$3.21 billion from C$3.31 billion Operating Expenses: Increased 9% to C$4.80 billion from C$4.40 billion Operating Ratio: Worsened 280 basis points to 59.9% from 57.1% Read CP’s full earnings report.
4th Quarter 2021 Net Earnings: Increased 23% to $934 million from $760 million Earnings Per Share: Increased 27% to $0.42 per share from $0.33 per share Revenue: Increased 21% to $3.43 billion from $2.83 billion Operating Income: Increased 12% to $1.37 billion from $1.22 billion Operating Expenses: Increased 28% to $2.1 billion from $1.6 billion Operating Ratio: Worsened to 60.1% from 57.0%
2021 Annual Earnings Net Earnings: Increased 37% to $3.8 billion from $2.8 billion Earnings Per Share: Increased 40% to $1.68 per share from $1.20 per share Revenue: Increased 18% to $12.52 billion from $10.58 billion Operating Income: Increased 28% to $5.6 billion from $4.4 billion Operating Expenses: Increased 11% to $6.9 billion from $6.2 billion Operating Ratio: Improved to 55.3% from 58.8% Read CSX’s full earnings report.
4th Quarter 2021 Net Earnings: Increased 258% to $595.1 million from $166.3 million Earnings Per Share:On December 14, 2021, Canadian Pacific Railway acquired the outstanding common and preferred stock of KCS. Therefore, earnings per share data is not presented because the company does not have any outstanding or issued publicly traded stock. Revenue: Increased 8% to $747.8 million from $693.4 million Operating Income: Increased 209% to $810.6 million from $262.3 million Operating Expenses: Decreased 115% to a negative $62.8 million from $431.1 million due to the merger Operating Ratio: Improved 70.6 points to –8.4% from 62.2%
2021 Annual Earnings Net Earnings: Decreased 15% to $527 million from $619 million Earnings Per Share:On December 14, 2021, Canadian Pacific Railway acquired the outstanding common and preferred stock of KCS. Therefore, earnings per share data is not presented because the company does not have any outstanding or issued publicly traded stock. Revenue: Increased 12% to $2.95 billion from $2.63 billion Operating Income: Decreased 12% to $884 million from $1.00 billion Operating Expenses: Increased 27% to $2.06 billion from $1.63 billion Operating Ratio: Worsened 8.1 points to 70.0% from 61.9% Read KCS’s full earnings report.
4th Quarter 2021 Net Earnings: Increased 13% to $760 million from $671 million Diluted Earnings Per Share: Increased 18% to $3.12 per share from $2.64 per share Revenue: Increased 11% to $2.9 billion from $2.6 billion Operating Income: Increased 15% to a 4th quarter record of $1.1 billion from $1.0 billion Operating Expenses: Increased 8% to $1.7 billion from $1.59 billion Operating Ratio: Improved 2% to a 4th quarter record 60.4% from 61.8%
2021 Annual Earnings Net Earnings: Increased 27% to $3 billion from $2 billion Diluted Earnings Per Share: Increased 31% to $12.11 per share from $7.84 per share Revenue: Increased 14% to $11.1 billion from $9.8 billion Operating Income: Increased 28% to a record $4.4 billion from $3.0 billion Operating Expenses: Decreased 1% to $6.7 billion from $6.8 billion Operating Ratio: Improved 7% to an all-time record of 60.1% from 69.3% Read NS’s full earnings report.
4th Quarter 2021 Net Earnings: Increased 24% to $1.7 billion from $1.4 billion Earnings Per Share: Increased 30% to $2.67 per share from $2.05 per share Revenue: Increased 12% to $5.7 billion from $5.1 billion Operating Income: Increased 22% to $2.4 billion from $2.0 billion Operating Expenses: Increased 5% to $3.3 billion from $3.1 billion Operating Ratio: Improved 3.6 points to 57.4% from 61.0%
2021 Annual Earnings Net Earnings: Increased 22% to $6.5 billion from $5.3 billion Earnings Per Share: Increased 26% to $9.98 per share from $7.90 per share Revenue: Increased 12% to $21.8 billion from $19.5 billion Operating Income: Increased 19% to $9.3 billion from $7.8 billion Operating Expenses: Increased 7% to $12.5 billion from $11.7 billion Operating Ratio: Improved 2.7 points to 57.2% from 59.9%
“The Union Pacific team concluded its most profitable year ever in 2021. We produced double-digit fourth-quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains,” UP CEO Lance Fritz said. Read UP’s full earnings report.
Notes:
Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
All comparisons are made to 2020’s fourth-quarter and 2020 year-end results respectively for each railroad.
All figures for CN & CP are in Canadian currency, except for earnings per share.
WASHINGTON – Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-Ore.) sent a letter to the Surface Transportation Board (STB) opposing the approval of a trust for the proposed merger of the Canadian National (CN) and Kansas City Southern (KCS) railroads. In his letter, DeFazio stated that approving the trust is not in the public interest and would reduce competition. “A single holding company responsible for this traffic would likely change rail traffic patterns in the significant areas of parallel service overlap and that would reduce the rail service options these 300 customers currently enjoy,” Chair DeFazio wrote in his letter. “I am also troubled that this combination of Class I railroads serving all three nations in North America will exacerbate U.S. job losses from cross-border trade agreements that prioritize profits over people and inflict harm on worker’s rights, consumer safety, and the environment.” In April 2021, Chair DeFazio issued a statement after Canadian Pacific (CP) and CN each made separate multi-billion dollar offers to buy KCS, warning that the bidding war that ensued for the railroad threatened to usher in a new round of consolidations in the rail sector, ultimately threatening jobs and affecting shipping in the U.S. DeFazio’s full letter to STB can be found below and here.
July 26, 2021 Ms. Cynthia Brown Chief, Section of Administration Office of Proceedings Surface Transportation Board 395 E Street, S.W. Washington, DC 20423 Re: Finance Docket No. 36514, Canadian National Railway Company, et al. – Control – Kansas City Southern Railway Company, et al. Dear Ms. Brown: I am writing to express opposition to the voting trust proposed by Canadian National Railway Company (CN) in its proposed merger with Kansas City Southern Railway Company (KCS). I am concerned that this proposed trust is not in the public interest. The trust would reduce competition and prejudice the outcome of the Surface Transportation Board’s merger proceeding. In its May 14, 2021, submission to this docket, the Antitrust Division of the U.S. Department of Justice explained how voting trusts reduce competition both in general for railroad mergers and in particular to the consideration of a voting trust for CN and KCS. In general, putting two formerly competitive businesses under a single holding company immediately reduces the parties’ incentives to engage in competition. While the Surface Transportation Board regularly allowed railroad trusts throughout the many railroad consolidations of the 1980s and 1990s, the board has made the requirements to approve a voting trust more stringent since 2001 as part of an overall reform of merger rules. Now, according to 49 CFR 1180.4(b)(4)(iv), applicants must demonstrate that trusts would be in the public interest. Approving a CN-KCS trust would signal to the rest of the rail industry that the STB is engaging in business as usual, despite the requirement to consider the public interest, and could launch a new round of mergers. Specifically with regard to the potential for a CN-KCS trust, I am concerned that approximately 300 current customers overlap on the CN and KCS networks. A single holding company responsible for this traffic would likely change rail traffic patterns in the significant areas of parallel service overlap and that would reduce the rail service options these 300 customers currently enjoy. I am also troubled that this combination of Class I railroads serving all three nations in North America will exacerbate U.S. job losses from cross-border trade agreements that prioritize profits over people and inflict harm on worker’s rights, consumer safety, and the environment. I trust that the Surface Transportation Board will look at the specific facts of this action and conclude that approving a trust is too much, too soon. Too much authority in one company to somehow keep two companies competing against each other that have significant service overlap and too soon because allowing the trust creates a new floor purchase price for any other potential competitive bidders for KCS railroad. Sincerely, Peter A. DeFazio
The Federal Railroad Administration (FRA) ruled in favor of safe train operations in June by denying a request by Canadian National (CN) that sought a waiver allowing an extinguished intermediate signal aspect to provide a signal indication. The SMART Transportation Division Minnesota State Legislative Board filed comments in opposition to CN’s waiver request in a letter submitted in February. “Apparently, CN seeks to avoid the expense of repairing and improving a defective signal system rather than recognizing the importance of a red signal aspect and the information that indication conveys to a train crew,” SMART TD Minnesota State Legislative Director Phillip Qualy said in the letter. “CN’s application seeks to normalize a dangerous and non-compliant operating practice.” FRA received numerous comments, including a joint submission by SMART TD’s National Legislative Department, the Brotherhood of Locomotive Engineers and Trainmen (BLET), American Train Dispatchers Association (ATDA), Brotherhood of Railroad Signalmen (BRS) and Brotherhood Railway Carmen Division (TCU/IAM) in opposition to CN’s request, and it was announced June 25 that FRA sided with the opposition. “Had (CN) been successful, this would have set a precedent and been a nightmare for train crews,” Qualy said. “This denial is also a very significant application denial that is in our favor.” Qualy said SMART TD Local 1292 Legislative Representative Dan Archambeau and Local 1067 Legislative Representative Nick Katich and others were thanked by FRA officials for bringing the issue to the agency’s attention. Earlier in the month, FRA denied a request by the Association of American Railroads to lengthen the amount of permissible off-air time from four to 24 hours for rail brake tests.
Canadian National has placed the largest power order by a Class I rail carrier in three years, asking for more than 200 ET44AC locomotives to be acquired from General Electric over the next three years, according to a report from Railway Age. The first round of locomotives are expected to roll off GE Transportation’s assembly line in Texas next year and will be delivered through 2020, Railway Age reported. For the original article on Railway Age, follow this link.
Net Earnings: $455 million or $0.48 per share; down from $507 million or $0.52 per share Revenue: Declined 8 percent Operating Income: Declined 10 percent to $841 million Operating Ratio: Increased 70 basis points to 69.0 percent Click here to read CSX’s full earnings report
Net Earnings: $121 million or $1.12 per diluted share; down from $132 million or $1.20 per diluted share Revenue: Decreased 4 percent to $605 million Operating Income: Decreased 9 percent to $200 million Operating Ratio: Increased to 66.9 percent Click here to read Kansas City Southern’s full earnings report
Net Earnings: C$347 million (7 percent increase) or C$2.34 diluted earnings per share (a 15 percent increase); up from C$323 million or C$2.04 diluted earnings per share Revenue: Decrease of 9 percent to C$1.55 billion Operating Income: C$657 million, a decrease of 13 percent Operating Ratio: 57.7 percent, lowest ever reported Click here to read Canadian Pacific’s full earnings report
Net Earnings: $1.1 billion or $1.36 per diluted share (9 percent decline); down from $1.3 billion or $1.50 per diluted share Revenue: $5.2 billion, down 7 percent Operating Income: Declined 11 percent to $2.0 billion Operating Ratio: 62.1 percent, up 1.8 points Click here to read Union Pacific’s full earnings report
Net Earnings: C$972 million or C$1.25 per diluted share, as compared to 2015 3rd quarter of C$1,007 million or C$1.26 per diluted share Revenue: Decreased 6 percent to C$3,014 million Operating Income: Declined 5 percent to C$1,407 million Operating Ratio: A record 53.3 percent, a 0.5-point improvement Click here to read Canadian National’s full earnings report
Net Earnings: $460 million (2 percent increase) or $1.55 diluted earnings per share (4 percent increase); up from $452 million or $1.49 diluted earnings per share Revenue: Declined 7 percent to $2.5 billion Operating Income: Stayed at a steady $820 million Operating Ratio: 67.5 percent, a 220 basis point improvement over 2015’s reported 69.7 percent in the third quarter Click here to read Norfolk Southern’s full earnings report
Note: Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
CBC News reported that a CN Rail trestle bridge was destroyed by fire in Mayerthorpe, Alta; and that the fire may have been purposely set. Read the entire story here.
Ryan D. Edwards, 27, of Schererville, Ind. was fatally injured July 25 while performing switching operations at Canadian National Markham Yard in Homewood, Ill. Edwards (Local 1299 of Schererville, Ind.) hired out in August of 2011.
Throughout his carer with the railroad, Edwards worked as an intermodal operator at BNSF and as a freight train conductor at both CSX and CN. While at CSX, Edwards graduated number one from his training class.
Edwards attended Columbia College in Chicago. He was an avid St. Louis Cardinals baseball fan and could often be seen wearing a Cardinals hat. Edwards married his wife, Victoria, May 22, 2010 and welcomed her two children, Edward and Emily, as his own. They later welcomed his son Ryan “RJ” into their family. He loved his family tremendously.
Edwards leaves behind wife, Victoria; their three children Emily, Edward and Ryan; his parents Nicole and John; his siblings Scottie, Tyra and Joshua; his great grandmother; grandparents and many other friends and family.
SMART TD General Chairperson Adren Crawford (Canadian National GO 433) reports, “The NTSB is investigating along with the SMART TD National Safety Team. No details of the incident have been released. Please keep his family and friends in your thoughts and prayers during this very difficult time.”
Visitation was Saturday, August 1 from 9:30 a.m. until time of service at 10:30 a.m. at the Salem Lutheran Church located at 18400 South Ashland Ave., Homewood, IL. Interment followed at Assumption Cemetery in Glenwood, Ill.
Click here to leave condolences for the family, click here to view Edwards’ official obituary.
Canada’s two biggest railroads aren’t letting winter go unchallenged.
Canadian National Railway Co. (CNR) is strengthening its network, increasing employees and engines to keep trains running smoothly prevent another winter of icy and prevent another winter of profit-sapping gridlock. Canadian Pacific Railway Ltd. (CP) is putting additional staff on standby, redeploying some equipment to “strategic” locations, and building new sidings in case below-average temperatures halt cargos.
“Last year was an extraordinary winter,” Canadian Pacific Chief Operating Officer Keith Creel said in a Dec. 15 interview in Toronto. “The rolling equipment, the air-brake systems, the steel that you ride the trains on, the locomotives that have to operate at 40 below zero — there are certain things that just don’t work when it gets this cold.”
