A week after railroads lost an appeal against the U.S. Department of Transportation’s new brake requirements, CSX Corp. (NYSE: CSX) has reinforced its stance against the new program.
The new brake rules were issued by the DOT in May, and included phasing in tougher tank car standards and new electronically controlled pneumatic braking systems on any trains carrying more than 70 cars of crude oil by 2021. On November 11, the agency’s Pipeline and Hazardous Materials Administration denied appeals against the rules.
Thousands of rail tank cars roll through the cities, suburbs and rural areas of East Tennessee day and night, moving chemicals and energy products desperately needed by a variety of industries that provide thousands of jobs throughout the region.
The commodities these tank cars carry are wide and varied, almost a who’s who of the chemical industry. And yes, some of them are dangerous.
A recent CSX tank train rolling through the crossing on Liberty Street at Middlebrook Pike offered a virtual montage of commodities shipped regularly by rail through Knoxville: LP gas, hot molten sulfur, isopropyl alcohol, piperidine and more, all identified by their four-digit hazmat code numbers displayed in a diamond-shaped sign on each car’s side.
In a press release Oct. 14, 2015, CSX announced record financial results for the third quarter of 2015.
Net earnings for the railroad came in at $507 million for the quarter, compared to the $509 million for the same period last year, which translates into a third quarter record of $0.52 per share, as compared to $0.51 per share in 2014.
CSX reports that revenue declined nine percent, while expenses decline 11 percent as a result of low fuel prices, cost reductions and savings from efficiency initiatives. The resulting $933 million in operating income drove a third quarter record operating ratio of 68.3 percent.
“CSX’s third quarter results demonstrate the company’s ability to leverage improving service while controlling costs in a dynamic environment where commodity prices and the strength of the U.S. dollar are challenging many of our markets,” CEO Michael J. Ward said. “Our performance supports strong pricing and continued efficiency gains as we continue to drive value for customers and shareholders.”
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.
Overall, Kansas City Southern (KCS) reported decreases in earnings for the third quarter 2015. However, the railroad did experience a record-setting operating ratio of 65.2 percent for the quarter, a 0.9-point improvement.
KCS reports revenues of $632 million, a decrease of seven percent as compared to the third quarter of 2014. Operating income also saw a four percent decrease to $220 million as compared to the reported $229 million a year ago. Reported net income totaled $132 million, or $1.20 per diluted share as compared with the $138 million or $1.25 per diluted share of a year ago. Adjusted earnings per share came in at $1.21 compared to the reported $1.29 of the third quarter 2014.
Overall, the railroad saw a decrease of two percent in carload volumes for the quarter. The third quarter saw a six percent increase in Agriculture & Minerals and a five percent increase in Chemical & Petroleum.
“Kansas City Southern’s third quarter 2015 financial and operational statistics point to meaningful sequential improvement from the second quarter,” CEO David L. Starling said. “While the company’s third quarter revenues increased $46 million over the second quarter, operating expenses grew by only $13 million. This improved financial performance contributed to a record third quarter operating ratio of 65.2 percent.
“There is no question that KCS has been confronted with some challenges in 2015. The resiliency of this company has been demonstrated by its ability to hit these challenges head-on and recover quickly while maintaining strong margins. We look to finish this year with continued strong commercial and operational improvement and ride this positive momentum into 2016.”
Canadian Pacific Railway announced the highest-revenue ever for the third quarter 2015, a 16 percent growth in adjusted earnings per share and the lowest operating ratio for the period in the company’s history.
Revenue saw an increase of two percent to C$1.71 billion, while adjusted operating ratio improved 290 basis points to a record-low of 59.9 percent. Adjusted operating income also saw increases to C$685 million, a 10 percent increase. Adjusted earnings per share advanced 16 percent to C$2.69.
“I am proud of the CP team’s execution this quarter amid stubborn economic softness and the lowest commodity prices in more than a decade,” CEO E. Hunter Harrison said. “It’s clear that despite the ongoing tough economic environment, our continued focus on service, cost control and incremental investment in the franchise will serve customers and shareholders well in the long run.”
Union Pacific Railroad reported declines in revenue for the third quarter 2015. The railroad reported net income decreased to $1.3 billion or $1.50 per diluted share down two percent as compared to last year’s $1.4 billion or $1.53 per diluted share in the third quarter 2014.
Operating revenue decreased 10 percent to $5.6 billion. UP did set a quarterly record in operating ratio, which came in at 60.3 percent, two points better than the third quarter 2014 and 1.1 points better than the previous record set in the fourth quarter 2014. The railroad reported that operating income was down five percent to $2.2 billion.
“Total volumes decreased about six percent in the quarter, more than offsetting another quarter of solid core pricing gains,” CEO Lance Fritz said. “On the cost side, we’ve made significant progress aligning our resources to current demand, and I am pleased to report a quarterly record operating ratio of 60.3 percent.
“We’ve made great progress in meeting this year’s challenges. As we finish 2015 and head toward next year, we continue to face many uncertainties. Energy prices, the consumer economy, grain markets and the strength of the U.S. dollar will all be key to future demand. Over the long term, we are well positioned to safely provide our customers with excellent service, while delivering strong value to our shareholders.”
Canadian National Railway reported its financial and operating results for the third quarter. The railroad saw increases in net income, operating income, revenues and an improvement in operating ratio. The railway saw declines in carloadings and revenue ton-miles for the third quarter 2015.
CN saw an 18 percent increase in net income to C$1,007 million, while diluted earnings per share also increased 21 percent to C$1.26. Operating income increased 16 percent to C$3,222 million, while carloadings and revenue ton-miles each declined by six percent. CN set an operating ratio record of 53.8 percent, a five-percentage point improvement.
CFO Luc Jobin said, “CN delivered record third-quarter results thanks to strong team execution in safely and efficiently meeting our customers’ needs while recalibrating resources to the weaker volume environment. We remain committed to our long-term agenda of operational and service excellence, investing in the safety and integrity of our network, and fulfilling our role as a true backbone of the economy. With CN’s continued strong performance this year, we are pleased to reaffirm our outlook for double-digit adjusted earnings per share growth in 2015 versus last year’s adjusted diluted earnings per share of C$3.76.”
Norfolk Southern Corporation reported declines for the third quarter 2015. Net income declined to $452 million or $1.49 per diluted share, compared to last year’s reported $559 million or $1.79 per diluted share.
The railroad reported operating revenues saw a 10 percent decline to $2.7 billion due to reductions in fuel surcharge revenues and continued reductions in coal shipments. Overall, volume declined three percent to 1.9 million units for the quarter. Income from railway operations decreased by 18 percent to $822 million as compared to last year’s reported third quarter. Railway operating ratio came in at 69.7 percent. NS did see a decline in operating expenses by seven percent to $1.9 billion due to lower fuel costs.
“Norfolk Southern’s third-quarter results reflect commodities markets that continue to soften, as well as cost associated with restructuring initiatives to strengthen our company going forward. These pressures will linger in the fourth quarter, while traffic volume to date continues to lag behind last year. However, looking ahead to 2016, we are confident that with a reasonably stable economy and our own intense focus on service, returns and growth, we are poised for better results,” CEO James A. Squires said.
TAMPA, Fla. — Is the solution to the Tampa Bay area’s mass transit woes already crisscrossing Hillsborough, Pasco and Pinellas counties?
That’s a question local planners will begin considering in the weeks and likely years to come as Jacksonville-based CSX Corp. considers selling off two rail lines that could conceivably be operated as commuter routes.
CSX floated the sale of 96 miles of track at a recent meeting of the Tampa Bay Transportation Management Area Leadership Group, which includes three elected officials each from the three counties’ Metropolitan Planning Organizations and sets regional transportation priorities.
JACKSONVILLE, Fla. – CSX employees are enduring another round of layoffs, this time at the company’s mechanical shops in Corbin, Kentucky.
CSX announced Tuesday that the shops will be closed, affecting about 180 active employees at the facilities. All affected employees at Corbin will receive at least 60 days of pay and benefits, CSX said in a news release.
Union employees also may have other benefits available in accordance with their labor agreements, CSX said. Many furloughed employees will be eligible for jobs in higher-demand areas on CSX’s network.
United Continental Holdings Inc’s new chief executive officer has suffered a heart attack, a person familiar with the matter said on Friday, barely a month after he took on the job of improving the airline’s profitability and reputation.
The board at United – the No. 2 U.S. carrier by capacity – was informed “promptly” after Oscar Munoz was taken to hospital, the person said.
“There’s no reason for the board to meet,” the person said. “We’re still gathering information about his medical condition and prognosis.”
United’s previous chief executive left while federal authorities were conducting an investigation involving the Port Authority of New York and New Jersey.
Motorists’ wait time at U.S. rail crossings may double as CSX Corp. hooks trains together to boost efficiency amid plunging demand for coal shipments.
Bulk cargo is the latest focus in CSX’s effort to improve productivity. Getting more cars behind the locomotives is one way to do that — even if a longer, heavier load spends more time on the tracks.
“We’re actually combining two long trains” in some coal markets, Chief Executive Officer Michael Ward said in an interview Wednesday, Oct. 14. “Some of the trains can get to a couple of miles long.”
JACKSONVILLE, Fla. – As CSX works to match its resources to a changing business environment, the company today announced the reduction of train operations at Erwin, Tennessee.
The decision, the result of significantly reduced coal traffic through the region, includes closing a locomotive service center, project shop and car shop, and eliminating switching operations at the Erwin yard. Approximately 300 CSX contract and management employees who work at the facilities and in support roles will be affected.
MONTGOMERY, W.Va.— The Federal Railroad Administration (FRA) today announced the cause of the February 16, 2015 CSX/Plains All American derailment in Mount Carbon, W.Va. The accident resulted in 27 derailed cars, a fire that ignited immediately and eventually burned for days and the evacuation of hundreds of local residents.
FRA was the lead agency tasked with responding to and investigating the February accident. Following a thorough investigation, the FRA announced the cause of the derailment to be a broken rail, resulting from a vertical split head rail defect. The defect that eventually resulted in the derailment was missed by CSX, and their contractor, Sperry Rail Service, on two separate inspections in the months leading up to the accident.
In addition to announcing the cause of the derailment, FRA also provided a path forward to prevent similar rail-caused accidents in the future:
The agency announced it will release a Safety Advisory, which urges closer and more detailed inspections where defects and flaws are suspected, and stronger training for rail inspection vehicle operators
FRA announced it will explore the need for rail-head wear standards and potentially require railroads to slow trains or replace a rail when certain conditions pose a safety risk
FRA secured a commitment from CSX to require internal rail flaw operators to review previous inspection data alongside real-time data in order to assist in identifying conditions and flaws that have changed or worsened between inspections
“Our country relies on the safe transportation of large quantities of energy products across the nation, and it is our responsibility to require operators to implement strict safety standards,” said U.S. Transportation Secretary Anthony Foxx. “FRA’s findings and action today should make it clear to rail operators that we will do exactly that.”
The cause of the derailment – the vertical split head broken rail – was missed in at least two separate rail inspections in December 2014 and January 2015. Data from both inspections show evidence of the defect, but neither CSX or CSX’s contractor, Sperry Rail Service, discovered the defect which led to the broken rail. FRA has issued $25,000 fines against both CSX and Sperry Rail Service for failure to verify a potential rail defect.
The broken rail was also near the location of a previous broken rail discovered by an FRA inspector and repaired in May 2014.
“When we see a need for action, we will take it, and that is what FRA is doing today. Broken rail is one of the leading causes of accidents. Railroads moving crude and other hazardous materials through and alongside communities bear significant and special responsibility. All railroads, not just CSX, must be more diligent when inspecting for internal rail flaws or when contracting out inspection work,” said FRA Acting Administrator Sarah Feinberg. “This is just our latest effort to increase the safe transportation of crude and other energy products.”
Over the last two years, the U.S. Department of Transportation (DOT) has taken more than two dozen actions to improve the safety of the transport of crude and other flammable liquids. In May 2015, DOT released its final, comprehensive rule that raises the bar on the safe transportation of flammable liquids by rail. The rule requires stronger tank cars and a better, faster, more efficient braking system – electronically controlled pneumatic (ECP) brakes. ECP brakes can reduce the distance and time needed for a train to stop and keep more tank cars on the track in the event of a derailment. The DOT rule also supplements FRA’s actions to add an Automated Track Inspection Program car to inspect crude routes, focus track inspectors on crude routes via our CORETEX program, and secure voluntary agreements from railroads to inspect track more frequently than current regulations require.
Safety inspectors from the state Department of Transportation and the Federal Railroad Administration uncovered 95 defects in their most recent examination of rail cars and tracks across upstate New York, Gov. Andrew M. Cuomo announced Monday.
Four of those defects, all on CSX mainline track west of Albany, were considered critical, requiring immediate attention, according to the governor’s office. Two were found between Fonda and Amsterdam, while one was found on the track between Fonda and Rome and another in Marlboro. All were repaired immediately.
Railroads are given up to 30 days to repair noncritical defects. Defects uncovered by inspectors included damaged hazardous material placards, thin brake shoes, inoperative lights, loose bolts on oil tank car heat shields, and missing guard rail bolts.
A week after railroads lost an appeal against the U.S. Department of Transportation’s new brake requirements, CSX Corp. (NYSE: CSX) has reinforced its stance against the new program.
Thousands of rail tank cars roll through the cities, suburbs and rural areas of East Tennessee day and night, moving chemicals and energy products desperately needed by a variety of industries that provide thousands of jobs throughout the region.
In a press release Oct. 14, 2015, CSX announced record financial results for the third quarter of 2015.
Overall, Kansas City Southern (KCS) reported decreases in earnings for the third quarter 2015. However, the railroad did experience a record-setting operating ratio of 65.2 percent for the quarter, a 0.9-point improvement.
Canadian Pacific Railway announced the highest-revenue ever for the third quarter 2015, a 16 percent growth in adjusted earnings per share and the lowest operating ratio for the period in the company’s history.
Union Pacific Railroad reported declines in revenue for the third quarter 2015. The railroad reported net income decreased to $1.3 billion or $1.50 per diluted share down two percent as compared to last year’s $1.4 billion or $1.53 per diluted share in the third quarter 2014.
Canadian National Railway reported its financial and operating results for the third quarter. The railroad saw increases in net income, operating income, revenues and an improvement in operating ratio. The railway saw declines in carloadings and revenue ton-miles for the third quarter 2015.
Norfolk Southern Corporation reported declines for the third quarter 2015. Net income declined to $452 million or $1.49 per diluted share, compared to last year’s reported $559 million or $1.79 per diluted share.
JACKSONVILLE, Fla. – CSX employees are enduring another round of layoffs, this time at the company’s mechanical shops in Corbin, Kentucky.
Motorists’ wait time at U.S. rail crossings may double as CSX Corp. hooks trains together to boost efficiency amid plunging demand for coal shipments.
MONTGOMERY, W.Va.— The Federal Railroad Administration (FRA) today announced the cause of the February 16, 2015 CSX/Plains All American derailment in Mount Carbon, W.Va. The accident resulted in 27 derailed cars, a fire that ignited immediately and eventually burned for days and the evacuation of hundreds of local residents.
Safety inspectors from the state Department of Transportation and the Federal Railroad Administration uncovered 95 defects in their most recent examination of rail cars and tracks across upstate New York, Gov. Andrew M. Cuomo announced Monday.