This morning (March 15), the U.S. Surface Transportation Board (STB) announced its decision to allow the merger of two of our nation’s seven Class I railroads.
The Canadian Pacific Railway Limited (CP) has now been given the federal clearance needed to finalize its agreement to acquire the Kansas City Southern (KCS) Railway Company.
The merger of the two corporate giants has been in the works since the fall of 2021 and has included an extensive amount of analysis by the STB on the ripple effects of the merger through the industry and for the supply chain as a whole. In short, the board found the net result of this merger to be a positive both economically and environmentally.
Expectation from the STB is that this merger will result in an addition of 800 new operating positions in the U.S.
The merger goes into effect April 14, 2023, and the company will now be know as Canadian Pacific Kansas City (CPKC). There will be an unprecedented seven-year oversight period allowing government regulators to ensure that all parties are living up to the agreed-upon stipulations.
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.
NORTH OLMSTED, Ohio — The team negotiating the next National Rail Contract which will affect more than 40,000 SMART Transportation Division members has been finalized by the union’s leadership. The team will be led by TD President Jeremy Ferguson with the assistance of Vice Presidents Brent Leonard; John J. Whitaker III; Chadrick Adams; Jamie C. Modesitt; Joe M. Lopez and David B. Wier Jr. Also part of the team are five General Chairpersons, Mike LaPresta (BNSF); Gary Crest (Union Pacific); Roger Crawford (Illinois Central); Thomas Gholson (Norfolk Southern) and Christopher Bartz (yardmasters). “We are prepared to do whatever it takes to get the most out of this round of national contract talks,” President Ferguson said. “It will be a challenging process and it could be quite contentious at times. However, we on the negotiating team are confident that as we work through the process we can achieve a positive result.” The opening meeting of negotiations is scheduled for February 26 and 27 in Washington, D.C., with talks occurring in Cleveland, Omaha, Washington, D.C. and Chicago, as the year progresses. SMART-TD is part of a Coordinated Bargaining Coalition that consists of it and nine other unions representing rail labor. Carriers BNSF, CSX, Kansas City Southern, Canadian National, Norfolk Southern, Soo Line, Union Pacific and numerous smaller railroads are represented by the National Carriers’ Conference Committee (NCCC) during negotiations. In related news, CSXT will not be part of national bargaining, except for health and welfare issues. For the wages and rules portion, SMART-TD and CSX have agreed to begin bargaining locally on behalf of trainmen starting Jan. 21, 2020. A joint meeting for the negotiating parties regarding facilitated bargaining is scheduled in Jacksonville, Fla., on January 22 and 23. Additional meeting dates for these negotiations are currently under discussion, and a tentative schedule will be set in the near future. Neither the SMART-TD nor CSX have exchanged any proposals, and an agenda for the subjects to be discussed during these contract talks, which are separate from the National Rail Contract negotiations, has yet to be finalized.
Canadian Pacific announced Wednesday, Nov. 20 that it has come to an agreement that would result in the Class I carrier acquiring the Central Maine & Quebec Railway (CM&Q). Financial terms of the acquisition were not disclosed in a news release announcing the deal. CP’s purchase from Fortress Transportation and Infrastructure Investors LLC now gives the carrier trackage and facilities from St. Jean, Quebec, Canada, to Searsport, Maine, and is expected to close by the end of the year. SMART Transportation Division represents 52 members on the CM&Q in the Transportation, Mechanical and Engineering Departments who belong to GO-049, which is represented by General Chairman Rick Lee. CM&Q owns 481 miles of rail lines primarily in Quebec and Maine. Read the full release from PR Newswire.
Brother Robert “Rob” J. Hemling, 39, of Randolph, Wis., and a member of Local 590, died in a train accident March 27 in Sparta, Wis. Brother Hemling, a conductor for Canadian Pacific, was working at Cedar Creek Lumber when he was killed. Police and media reports did not provide details about the circumstances of the accident. He began working for the Wisconsin & Southern Railroad before joining Local 590 in 2003. He is survived by his wife, Megan; his two daughters, Madelynn and Savannah; parents, Randy and Kathy Hemling of Beaver Dam; his siblings, Rachel (Corey) Bradley of Beaver Dam, Andy (Shelly) Hemling of Randolph and Aleshia (Clint) Redeker of Randolph; parents-in-law, Terry and Betty Boomsma of Beaver Dam; a sister-in-law, Tara (Justin) Kienast of Burnett; grandmothers, Evelyn Schumacher of Randolph and Lucy (Gordon) Braaksma of Randolph; a step-grandmother, Deb Stiemsma of Randolph; nieces and nephews, Cole, Brandi, Hunter, Emma, Griffin, Paisley, Aidan, Kate, Alayna, Taylor, Brody, Kaiden and Sam; aunts, uncles, other relatives and friends. Visitation will be 4 to 8 p.m. Monday, April 2, 2018, and on Tuesday, April 3, 2018, from 10 a.m. until an 11 a.m. funeral service at First Reformed Church, 406 S. High St., Randolph, with Pastor Linda Heisler officiating. Burial will follow in Randolph Cemetery. A memorial fund directed toward Brother Hemling’s family has been set up at https://www.gofundme.com/conductor-rob.
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.
According to Progressive Railroading, Canadian Pacific (CP) has been fined $1.2 million by the Federal Communications Commission (FCC) for operating 100 wireless radio facilities in the U.S. without FCC approval. Read the entire story here.
The Calgary Herald reported that Canadian Pacific Railway may eliminate more jobs in 2016 than originally announced; possibly as many as 1,400 positions. Read the entire story here.
Fox 9 reports that a fatality that occurred last week during a crew change on Canadian Pacific may have been preventable. In an interview with the news channel, Minnesota State Legislative Director Phil Qualy said that CP could have taken action to move the crew changes to a safer area, but took no action. Qualy told SMART TD that he had submitted numerous letters to CP about the safety of having a crew change in the specific location where the engineer-trainee Jeffrey Harsh was killed but no action had been taken. In a similar trajedy, CP railway worker Jamie Jijian died in 2013 as a result of a “combination of hazardous conditions acting together.” His death is also believed to have been preventable. Rail workers are still performing crew changes in the area where Harsh lost his life last week. “As a representative of the FRA’s Switching Operations Fatality Analysis (SOFA) working group, I would like to point to section 3.7 of SOFA’s 2011 report “Findings and Advisories of the SOFA Working Group Volume I: SOFA Report with Appendix A,” that warns of the dangers of crossing active rails, to all carriers, interested parties and members.” Harsh’s case is still under investigation by the FRA. Click here to read SOFA’s 2011 report. Click here to read more from Fox 9. Click here to read more about Jijian’s accident from CBC News.
Fox 9 reports that a fatality that occurred last week during a crew change on Canadian Pacific may have been preventable.