SMART Union
Norfolk Southern said Nov. 3 it intends to hire 500 employees by year end, and add another 2,600 employees in 2012 to meet growing demand for service and to replace those retiring.
Hiring will be for conductors, as well as other crafts, including freight car repairers, machinists, signal maintainers, and track maintenance workers.
For more information, click on the following link:
WASHINGTON – The U.S. Surface Transportation Board has determined that only one major railroad – Union Pacific – was “revenue adequate” in calendar year 2010.
A railroad is considered “revenue adequate” if it achieves a rate of return on net investment equal to at least the current cost of capital for the railroad industry.
Revenue adequacy determines long-term financial sustainability – the ability to pay investors competitive returns as well as covering the cost of efficient operation, which includes obtaining capital for new equipment; to maintain existing track, bridges, signal systems and other capital assets; and to fund capacity expansion.
For 2010, the STB concluded that the current cost of capital for the railroad industry was 11.03 percent, and only Union Pacific achieved a rate of return equal to or exceeding that percentage. No railroad was found to be “revenue adequate” for calendar year 2009.
For 2010, the STB determined that Union Pacific achieved a rate of return on net investment of 11.54 percent; Norfolk Southern, 10.96 percent; CSX, 10.85 percent; Kansas City Southern, 9.77 percent; BNSF, 9.22 percent; Canadian National U.S. affiliates, 9.21 percent; and Canadian Pacific U.S. affiliates, 8.01 percent.
BNSF reported a 9 percent improvement in profit for the third quarter 2011 versus the third quarter 2010.
The third-quarter operating ratio of 71.7 percent was slightly higher than the 70.8 percent for third-quarter 2010. 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.
BNSF, which is privately held by Berkshire Hathway, operates 28,000 route miles in 28 states and two Canadian provinces.
Canadian National reported a 19 percent increase in profit for the third quarter 2011 versus the third quarter 2010.
CN said a 4 percent increase in carloadings and a 9 percent increase in revenue, coupled with “rigorous cost control” drove its higher third quarter earnings.
CN’s third quarter 2011 operating ratio of 59.3 percent improved from the 60.7 percent operating ratio during the third quarter 2010. 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.
CN is primarily a Canadian railroad. Its U.S. holdings include what were formerly Detroit, Toledo & Ironton; Elgin, Joliet & Eastern; Grand Trunk Western; Illinois Central; and Wisconsin Central.
Canadian Pacific’s third quarter 2011 profit fell by 5 percent versus third quarter 2010.
CP’s third quarter 2011 operating ratio deteriorated to 75.8 percent, more than two percentage points higher than its 73.7 percent operating ratio for the third quarter 2010. 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.
Canadian Pacific is primarily a Canadian railroad. Its U.S. holdings include Class I Soo Line and regional railroad Delaware & Hudson.
CSX reported a 12 percent increase in profit for the third quarter 2011 versus the third quarter 2010, much of it the result of higher freight rates as traffic volume slowed.
The railroad said higher fuel surcharges improved its bottom line, offsetting higher costs. CSX said also that its earnings were helped by increased coal exports to China that offset a weakness in domestic coal shipments. Coal accounts for some 33 percent of CSX revenue.
CSX’s third quarter 2011 operating ratio deteriorated to 70.4 percent versus 69.1 percent for the third quarter 2010. 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.
CSX operates some 21,000 route miles in 23 states and the District of Columbia.
Kansas City Southern reported a 99 percent improvement in profits for the third quarter 2011 versus third quarter 2010, driven by higher freight rates and a record level of carloadings, boosted through increased production of automobiles in Mexico destined for U.S. markets.
“These achievements are all the more impressive given the operating challenges caused by prolonged flooding in the Midwest, particularly along the Missouri River,” said CEO David Starling. “The flooding resulted in the closure of a primary rail line into Kansas City from mid-June through Labor Day, which significantly disrupted grain and coal traffic.”
KCS’s operating ratio of 66.6 for the third quarter 2011 was a sharp improvement from the 73.5 percent in third quarter 2010. 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.
KCS operates some 3,500 route miles in 10 states in the Central and South-Central U.S., as well as Kansas City Southern de Mexico, a primary Mexican rail line.
Norfolk Southern reported a 24 percent increase in third quarter profit versus third quarter 2010, citing increased freight rates and a 23 percent boost in coal hauled for export.
The third quarter produced for NS “all-time records for income from operations and earnings per share, while also establishing third-quarter records for net income and operating ratio,” said NS CEO Wick Moorman.
The NS third quarter 2011 operating ratio of 67.5 was a third-quarter record low and 2.1 percentage points below its third-quarter 2010 operating ratio of 69.6 percent. 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 operates some 20,000 route miles in 22 states and the District of Columbia.
Union Pacific reported a 16 percent increase in profits for the third quarter 2011 versus third quarter 2010, citing price increases and fuel surcharges in the face of a sluggish economy, weather-related difficulties in parched Texas and sharply higher fuel prices.
UP’s operating ratio of 69.1 percent for the third quarter 2011 was slightly higher than the record 68.2 percent operating ratio it posted in the third quarter 2010. 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.
Union Pacific operates some 32,000 route miles in 23 states in the western two-thirds of the U.S.
As BNSF is now privately held, it does not report its earnings.
Canadian National:
Canadian National Railway July 25 reported an 8 percent increase in profit for the second quarter 2011 versus the second quarter 2010, citing a 10 percent increase in intermodal loadings (trailers and containers on flat cars) and a 14 percent increase in intermodal revenue.
CN’s second quarter 2011 operating ratio of 62.3 percent showed little change from the 61.2 percent for the second quarter 2010. 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.
CN is primarily a Canadian railroad. Its U.S. holdings include what were formerly Detroit, Toledo & Ironton; Elgin, Joliet & Eastern; Grand Trunk Western; Illinois Central; and Wisconsin Central.
Canadian Pacific:
Canadian Pacific Railway’s second quarter 2011 profit fell by 23 percent versus second quarter 2010, owing to widespread and prolonged flood disruptions, said the carrier.
CP’s second quarter 2011 operating ratio of 88.8 was four percentage points higher than the operating ratio for the second quarter 2010. 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.
Canadian Pacific is primarily a Canadian railroad. Its U.S. holdings include Class I Soo Line and regional railroad Delaware & Hudson.
CSX:
CSX July 19 reported a 22 percent increase in profit for the second quarter 2011 versus the second quarter 2010, much of it the result of higher freight rates as traffic volume slowed.
CSX said the improved profits will allow $2.2 billion in spending to make improvements to its tracks, yards and signals, and purchase additional locomotives and freight cars. The railroad also said it will increase employment by 4 percent in 2011, double its proposed headcount increase announced earlier in the year.
CSX’s second quarter 2011 operating ratio declined to 69.3, versus 7.2 for the second quarter 2010. 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.
CSX operates some 21,000 route miles in 23 states and the District of Columbia
Kansas City Southern:
Kansas City Southern July 21 reported a 19 percent improvement in profits for the second quarter 2011 versus second quarter 2010, driven by improved auto, intermodal and coal traffic as it established records for the number of carloads handled.
Its operating ratio of 71.7 was almost a full percentage point better than its operating ratio in the second quarter 2010. 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.
KCS operates some 3,500 route miles in 10 states in the Central and South-Central U.S., as well as Kansas City Southern de Mexico, a primary Mexican rail line.
Norfolk Southern:
Norfolk Southern July 26 reported a record second-quarter profit – a 42 percent improvement for second quarter 2011 versus second quarter 2010. The railroad cited increased intermodal traffic (trailers and containers on flat cars) and coal loadings as significant contributors to the improved earnings.
The NS second quarter 2011 operating ratio of 69.5 percent was slightly improved from the 69.9 percent for second quarter 2010. 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.
NS operates some 20,000 route miles in 22 states and the District of Columbia.
Union Pacific:
Union Pacific July 21 reported a 10 percent increase in profits for the second quarter 2011 versus second quarter 2010, citing prices increases and an 11 percent increase in chemicals and agricultural carloads. The railroad said it was the best-ever quarterly earnings.
UP’s operating ratio of 71.3, however, was 1.9 percent higher than second quarter 2010. 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.
UP said it plans to hire some 4,500 new workers by the end of 2011 – 3,000 to replace those retiring and 1,500 to new positions.
Union Pacific operates some 32,000 route miles in 23 states in the western two-thirds of the U.S.
As BNSF is now privately held, it does not report quarterly earnings.
Football season is long over. The New York Jets never made it to the Super Bowl. National Football League players are locked out by their owners. The upcoming football season could be in jeopardy.
And how about Norfolk Southern conductor and former Jets defensive back Keith Fitzhugh, who last fall turned down a Jets’ offer to return to the team in favor or being a conductor?
“I’m so happy,” Fitzhugh, age 24, recently told The Associated Press. “It turned out just right for me.”
When we previously visited with Fitzhugh last fall, he had spurned the Jets’ offer and was in conductor training. Many called his decision to stay with NS “crazy.”
Job security and a steady income were and are more important to Fitzhugh, especially in an economy where jobs are scarce and good benefits even more scarce.
Indeed, some of his former – and now locked-out – NFL teammates, have asked Fitzhugh if they could get him a similar job on Norfolk Southern, reported the Associated Press. “They’re, like, ‘Hey, Keith, if this doesn’t work out for me …’ and I just tell them, ‘Just go ahead and apply, just like I did,'” he told the Associated Press.
“No big-name guys,” Fitzhugh told the Associated Press, “but guys who are straddling that line like I was. When they hear about what I do, it’s kind of exciting to them, too, because you turn into a kid all over again. You’re riding a train that has 4,000 or 5,000 horsepower and you really can get into the thrill of it. It’s a fun job, man.”
Fitzhugh is now a full-time conductor and member of UTU Local 511 in Atlanta, and most often working a run between Atlanta and Chattanooga, Tenn. He resides in Hampton, Ga.
Could Fitzhugh eventually return to the NFL? He told the Associated Press that NS officials promised him a leave of absence if another opportunity presented itself. “I’m still young and I keep my body in shape,” he told the Associated Press. “I don’t know if the opportunity will ever come with this lockout, but I can’t say yay or nay. You never know who might call me and give me an opportunity.”
“For me, having job security is important,” Fitzhugh told the UTU News last fall when he made the decision to stay with NS. “I was released three times [twice by the Jets, once by the Baltimore Ravens]. There is no job security [in the National Football League]. Why risk losing a good job with Norfolk Southern? I have buddies with two degrees who can’t find a job.
“Working for Norfolk Southern is one of the best prestigious jobs you can have,” Fitzhugh told the UTU News last fall. “I have to look out for what’s best for me and my family. I think riding on a locomotive is one of the coolest things.”
Fitzhugh
Most major North American freight railroads reported strong earnings for the first quarter 2011 versus first quarter 2010.
Following is a wrap-up for the quarterly earnings reported by the railroads to the investment community.
Not included is BNSF, which is privately held and does not report its financial results to the investment community.
Mention is made of each railroad’s operating ratio. 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 higher is profit.
Canadian National
Canadian National reported a 31 percent increase in first quarter 2011 profit versus first quarter 2010. This comes following a 19 percent increase in CN profit for calendar year 2010.
CN’s operating ratio for the first quarter 2011 was 69 percent, slightly better than the 69.3 percent reported for first quarter 2010. The railroad’s fourth-quarter 2010 operating ratio was 63.6.
CN is primarily a Canadian railroad. Its U.S. holdings include what were formerly Detroit, Toledo & Ironton; Elgin, Joliet & Eastern; Grand Trunk Western; Illinois Central; and Wisconsin Central.
Canadian Pacific
Canadian Pacific Railway was the only major North American rail system reporting a drop in profit for the first quarter 2011 compared with first quarter 2010. CP cited severe winter weather as the cause of its profit decline.
CP’s calendar-year 2010 profit increased by 39 percent.
The railroad’s first quarter 2011 operating ratio soared to 90.6 compared with 82.3 in the first quarter 2010. CP’s fourth quarter 2010 operating ratio was 77.6.
CP said its 15,143 employee count increased by 613 during the quarter, but gave no indication of whether it would add employees the remainder of 2011.
First quarter 2011 train speeds fell by almost 14 percent and the number of train accidents soared by 57 percent — both attributed to a dramatic increase in the number of avalanches in the Canadian Rockies and winter-long blowing snow throughout CP’s North American rail network.
Canadian Pacific is primarily a Canadian railroad. Its U.S. holdings include Class I Soo Line and regional railroad Delaware & Hudson.
CSX
CSX profit jumped 30 percent during the first quarter 2011 versus the first quarter 2010, the railroad reported April 19. This comes on the heels of a 35 percent improvement in operating profit for calendar year 2010.
The CSX employee headcount rose in March to 30,464 employees, up 3 percent from March 2010, the railroad said.
The CSX operating ratio for the first quarter 2011 was a record low 72.5 for any first quarter. The fourth quarter 2010 CSX operating ratio was 71.1.
CSX operates some 21,000 route miles in 23 states and the District of Columbia.
Kansas City Southern
Kansas City Southern’s first-quarter 2011 profit was almost double that of the first quarter 2010. This followed an 82 percent increase in profit for calendar-year 2010.
The employee headcount remained constant at 6,080. The railroad did not indicate whether it would be increasing its headcount in 2011.
The KCS first quarter operating ratio declined significantly, from 75.2 percent the first quarter 2010 to 73.8 for the first quarter 2011. The railroad’s fourth-quarter 2010 operating ratio was 73.2.
KCS operates some 3,500 route miles in 10 states in the Central and South-Central U.S., as well as Kansas City Southern de Mexico, a primary Mexican rail line.
Norfolk Southern
Norfolk Southern reported a 26 percent increase in profit for first quarter 2011 versus first quarter 2010. This follows a 45 jump in NS profit for calendar-year 2010.
NS said it would add some 1,100 new workers during 2011, returning employment to the same level as in 2008.
NS operating ratio for first quarter 2011 was 77.1 percent, higher than the 75.2 percent in the first quarter 2010, owing, in part, to severe winter weather. The fourth-quarter 2010 NS operating ratio was 71.9 percent.
NS operates some 20,000 route miles in 22 states and the District of Columbia.
Union Pacific
Union Pacific profit rose 24 percent in first quarter 2011 compared with first quarter 2010, This follows a 47 percent jump in Union Pacific profit for calendar-year 2010.
UP said the railroad would increase its 43,000 employee headcount by about 4,500 in 2011.
The railroad reported a best-ever first quarter operating ratio of 74.7 percent — one of the more difficult for railroads because of winter weather. The fourth quarter 2010 UP operating ratio was 73.2.
Union Pacific operates some 32,000 route miles in 23 states in the western two-thirds of the U.S.
Norfolk Southern reported a 26 percent increase in profit for first quarter 2011 versus first quarter 2010. This follows a 45 jump in NS profit for calendar-year 2010.
NS CEO Wick Moorman said the railroad intends to add some 1,100 new workers during 2011, returning employment to the same level as in 2008.
NS operating ratio for first quarter 2011 was 77.1 percent, higher than the 75.2 percent in the first quarter 2010, owing, in part, to severe winter weather. The fourth-quarter 2010 NS operating ratio was 71.9 percent.
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 higher is profit.
Moorman told Wall Street analysts, “We see continuing opportunities for growth in almost every segment of our business, and we’re optimistic about our prospects for the balance of 2011.”
NS operates some 20,000 route miles in 22 states and the District of Columbia.
Shortline holding company Watco is seeking regulatory approval to acquire 43.6 miles of track from Norfolk Southern in Alabama between Maplesville and Autauga Creek, and 10.1 miles of track between Autauga Creek and Montgomery for creation of a new shortline railroad.
The new shortline would be named Autauga Northern Railroad.
Watco currently controls 22 shortline railroads in 18 states.
How did major railroads perform in 2010?
Reviewing their calendar-year and fourth-quarter profit statements, one wouldn’t know they were operating in the midst of a nationwide recession.
Profits soared, stock dividends were raised and operating ratios improved. (Operating ratio — a railroad’s operating expenses expressed as a percentage of operating revenue — is considered by economists to be the basic measure of carrier profitability.)
Wall Street analyst Ed Wolfe reports the level of freight car and intermodal loadings for the year registered “the best” year-over-year growth in more than 50 years.
Wolfe and other analysts also point to the railroads’ pricing strength — the ability to raise rates on shippers with limited effective alternatives to railroad transportation. Many long-term contracts for hauling coal are expiring, and substantial rate increases on that traffic already are reflected in new contracts.
Indeed, railroad CEOs are predicting another strongly profitable year in 2011, which was reflected in year-end railroad stock prices, which were flirting with record highs.
Following are profit reports from the major railroads:
Canadian National:
Canadian Pacific:
CSX:
Kansas City Southern:
Norfolk Southern:
Union Pacific:
BNSF:
As BNSF is now privately held, it no longer reports detailed financial data.
UTU conductor double-amputee in NS mishap
Norfolk Southern conductor and UTU Local 768 member Larry McVay, age 43, lost an arm and a leg in a switching accident near Lafayette, Ind., the morning of Jan. 3, and is recovering in an Indianapolis hospital.
A UTU member since Dec. 1, 2007, McVay is a resident of Dalton City, Ill. He and his wife, Lisa, lost a daughter in an automobile accident in 2008.
A Larry McVay benefit fund has been established at Land of Lincoln Credit Union, 2890 N. Oakland Ave., Decatur, IL. 62526. More information may be obtained from the credit union by calling (217) 875-1300.
Members who have PayPal accounts may also make a contribution through the PayPal website by sending funds to the e-mail address benefitlarry@yahoo.com.