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By a margin of nearly four to one, SMART Transportation Division members have voted to APPROVE the new National Rail Contract. The voting was conducted by BallotPoint Election Services, who certified the following results for each craft eligible to vote:

CRAFTACCEPTREJECT
Conductors79.89%20.11%
Brakemen78.98%21.02%
Engine Service76.58%23.42%
Yardmen79.97%20.03%
Yardmaster86.68%13.32%
Combined79.57%20.43%

The approved contract will have an effective date of December 1, 2017, with implementation of new pay rates and employee healthcare cost-sharing modifications planned for January 1, 2018. Employees’ monthly healthcare contributions will remain frozen at $228.89 for the life of the contract.
The term of the agreement is for five years, from January 1, 2015 to December 31, 2019. In addition to a 3% increase previously negotiated and already implemented on January 1, 2015, the contract provides for full retroactive pay of 2% from July 1, 2016 through June 30, 2017, and 4% from July 1, 2017, until implementation of the new rates. Thereafter, affected members will receive a boost in wage rates of 2.5% on July 1, 2018, and 3% on July 1, 2019.
The ratified contract will cover over 35,000 SMART TD members employed by BNSF, CSX, Norfolk Southern, Kansas City Southern, Union Pacific and numerous smaller carriers, all of whom were represented in this round of bargaining by the rail industry’s National Carriers’ Conference Committee.
The SMART TD negotiating team was led by President John Previsich, who was assisted in the negotiations by Vice Presidents David Wier, John Lesniewski, Troy Johnson, John England, Doyle Turner and Jeremy Ferguson, along with General Chairpersons Danny Young (BNSF), Mark Cook (NS), Brent Leonard (UP) and Steve Mavity (CSX), all four of whom are nationally elected TD officers in addition to serving as General Chairpersons.
For this round of bargaining, SMART TD joined forces with five other unions to form the Coordinated Bargaining Group. The other unions in the CBG are the American Train Dispatchers Association; the Brotherhood of Locomotive Engineers and Trainmen (a Division of the Rail Conference of the International Brotherhood of Teamsters); the Brotherhood of Railroad Signalmen; the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers and the National Conference of Firemen and Oilers/SEIU.
President Previsich commented: “I believe that our negotiating team, along with the teams from the other unions in the CBG, are to be commended for staying the course during a long and tedious round of negotiations. The easy thing for them to do when the going got tough was to declare defeat and walk away from the negotiating table, as others have done, but our team never wavered. By rejecting the carriers’ unreasonable demands while staying at the table and continuing to negotiate, the team was successful in obtaining an agreement that achieved an approval rate of 79.57%.”

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The SMART Transportation Division, formerly the United Transportation Union, is the largest rail union in the United States representing members in all operating crafts, including engineers, conductors, trainmen, switchmen and yardmasters.

Follow this link to view this release in PDF form.

The Pittsburgh Post-Gazette reported that with the help of a $20 million dollar state grant, Norfolk Southern (NS) will develop a second freight route through Pittsburgh, Pennsylvania, that has the capability of supporting double-stack freight cars. The project has been in the works since last June, when a landslide from Mount Washington closed NS’s double-stack line for nearly two weeks. The second, alternative line will now exist as a backup line. A portion of the funds will be utilized for railroad bridge repair in the area.
Click here to read more.

CSX_logo
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
 
KCS_rail_logo
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
 
CP_Logo_RGB
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
 
union_pacific_logo
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
 
CN_red_logo
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
 
ns_Logo
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.

ns_LogoRailway Age reported that Norfolk Southern Corp. (NS) will downsize its Knoxville, Tenn. yard effective May 1. Approximately 135 positions will be eliminated. According to NS, this action is in response to lower traffic volumes. Read the entire story here.

ns_LogoWSLS.com reported that Norfolk Southern plans to cut 2,000 jobs in response to its fourth quarter profits sliding 29 percent amidst its attempts to ward off a takeover bid from Canadian Pacific. 

Read the entire article here.

cp-logo-240The Globe and Mail reported that a proxy fight is likely between Canadian Pacific and Norfolk Southern.

In a recent regulatory filing, NS said that the premium offered by CP in its proposal was too small and the merger and the voting trust proposed would not be approved by regulators.

Read the complete article here.

ns_LogoNorfolk Southern (NYSE: NSC) announced that its board of directors has unanimously rejected Canadian Pacific’s (NYSE:CP) previously announced unsolicited, low-premium, non-binding, highly conditional indication of interest to acquire the Company for $46.72 in cash and a fixed exchange ratio of 0.348 shares in a new company that would own Canadian Pacific and Norfolk Southern.

After a comprehensive review, conducted in consultation with its financial and legal advisors, the Norfolk Southern board concluded that the indication of interest is grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the Company and its shareholders.

Read more from StreetInsider.com.

cp-logo-240Canadian Pacific Railway Ltd., the second-biggest railroad in Canada, is exploring a takeover of U.S. carrier Norfolk Southern Corp. in a fresh attempt to consolidate the North American industry, according to people familiar with the matter. The shares surged on the news. Canadian Pacific is raising financing and has held early-stage merger talks with Norfolk Southern, which is valued at about $24 billion, said two of the people, who asked not to be identified because deliberations are private. Discussions are preliminary and talks may not progress or lead to a deal, they said. Representatives for Canadian Pacific and Norfolk declined to comment. ns_LogoA move for Norfolk Southern, the second-biggest railroad in the eastern U.S., would revive Canadian Pacific’s effort to build a transcontinental carrier after talks with CSX Corp. failed last year. In floating the idea of a CSX tie-up, Canadian Pacific Chief Executive Officer Hunter Harrison upended the long-held view in the industry that it was fruitless to even discuss another merger because regulators would object. Read more from Bloomberg Business.