Railroad News

July 2016

Rail News: BNSF Railway

Union Pacific Corp. reported today its second-quarter 2016 profit fell to $979 million, or $1.17 per diluted share, compared with $1.2 billion, or $1.38 per diluted share, in second-quarter 2015.

Operating revenue declined 12 percent to $4.8 billion, while operating income fell 15 percent to $1.7 billion compared with last year's Q2 performance, UP officials said in a press release.

A new intermodal rail service will serve the Port of Wilmington and CSX's intermodal terminal in Charlotte, N.C., Gov. Pat McCrory and the North Carolina Department of Transportation announced yesterday.

The "Queen City Express" will be the only direct freight-rail service into the greater Charlotte area from a Southeast port, McCrory said in a press release.

Canadian Pacific's second-quarter 2016 revenue fell 12 percent to $1.45 billion, operating income dropped 15 percent to $551 million and net income decreased 16 percent to $328 million (all in Canadian dollars) compared with the same period last year, the Class I announced this morning.

Reported diluted earnings per share declined 9 percent to $2.15 from $2.36 and adjusted diluted earnings per share decreased 16 percent to $2.05 from $2.45 due in large part to the 12 percent drop in revenue, CP officials said in a press release.

CSX has been determined a "best place to work" according to the 2016 Disability Equality Index (DEI), the Class I announced yesterday.

The railroad received a company-record score of 90 percent on the index, which tracks indicators of corporate disability inclusion, such as access, employment practices, culture and leadership, and community engagement and support services, CSX officials said in a press release.

Kansas City Southern's second-quarter 2016 revenue declined 3 percent to $569 million, but operating income jumped 18 percent to $220 million compared with the same period a year ago, the Class I announced this morning.

Excluding the estimated impact of Mexican peso depreciation and lower U.S. fuel prices, KCS' revenue rose 2 percent compared with the previous year's quarter, company officials said in a press release.

Union Pacific Railroad is soliciting public comments on its Response Management Communications Center (RMCC) as part of a required assessment to maintain the center's accreditation.

The center centralizes UP's responses to critical incidents 24 hours a day, seven days a week. The center is accredited by the Commission on Accreditation for Law Enforcement Agencies (CALEA).

Two BNSF Railway Co. trains collided head-on in Panhandle, Texas, last month after one of the trains missed a stop signal, the National Transportation Safety Board (NTSB) announced yesterday in a preliminary report.

Three crew members died when the eastbound and westbound trains collided at 8:21 a.m. June 28 in BNSF's Panhandle Subdivision. The collision caused the derailment of the locomotives and several cars from both trains, and resulted in a significant fire.

CSX Corp.'s second-quarter 2016 revenue declined 12 percent to $2.7 billion, driven by a 9 percent decrease in volume that affected all markets but especially coal, which plummeted more than 30 percent.

The company yesterday posted Q2 net income of $445 million, or 47 cents per share, down from $553 million, or 56 cents per share, in the same period last year.

— by Pat Foran, editor

Class I second-quarter earnings announcements were two to three weeks away as we prepared to finish our July issue, but Class I execs already had let the world know that the year-over-year comparisons weren’t going to be good. They told us that in April during their Q1 earnings conferences and reminded us last month.

Norfolk Southern Corp. will pay nearly $500,000 to 2,086 African-Americans as part of a settlement agreement with the U.S. Department of Labor to resolve allegations of race-based hiring discrimination, federal officials announced yesterday.

The case involves an NS business unit in its engineering department, Maintenance of Way No. 34, which entered into the agreement with the department's Office of Federal Contract Compliance Programs (OFCCP). NS is a federal contractor that has had more than $10 million contracts with the Federal Highway Administration, U.S. Department of the Navy, U.S. Department of Air Force and U.S. Fish & Wildlife Services.

SSA Marine, Melford International Terminal and Cyrus Capital Partners LP announced yesterday the formation of a joint venture that will construct a container terminal as part of the Melford Atlantic Gateway project in Nova Scotia.

The new 315-acre marine container terminal will be built at the Strait of Canso, Nova Scotia, and will become the closest North American port on the circle route to Europe and Asia via the Suez Canal, the companies announced in a joint press release.

Robert Martinez, Norfolk Southern Corp's. vice president of business development and real estate, will be in China this week to meet with business leaders who are considering locating their manufacturing plants in the United States, NS announced yesterday.

Martinez plans to meet with a range of Chinese companies, including manufacturers of automobiles, tires, chemicals, tissue and metals.

Union Pacific Railroad was recognized last week by Food Logistics as a "Top Green Provider" for delivering fresh food and beverages, the Class I announced last week.

UP is the first large North American railroad to receive the recognition. The publication's annual list recognizes companies whose products, services or leadership enhances sustainability within the food and beverage industry, UP officials said in a press release.

Canadian Pacific yesterday began laying off 500 track maintenance workers, the Teamsters Canada Rail Conference announced on its website.

The "temporary layoffs are the result of lower car volumes and a softening demand in a lackluster North American economy," said CP Assistant Vice President of Public Affairs and Communications Martin Cej in a prepared statement to CBC News, which the union also posted on its website.

The remains of two BNSF Railway Co. crew members involved in a train collision on Tuesday have been recovered, the railroad announced yesterday.

A third crew member is still unaccounted for, while a fourth crew member is in "stable" condition at a local hospital, BNSF officials said in a post on the company's website.

Two BNSF Railway Co. trains were traveling on the same track when they collided head-on yesterday morning near Panhandle, Texas.

Three crew members are missing, and one crew member was injured after he jumped from the train before the collision, according to local news reports. Each train had a conductor and an engineer on board.

Green Plains Inc. and Jefferson Gulf Coast Energy Partners have formed a joint venture to construct and operate an intermodal fuels terminal at Jefferson's existing terminal in Beaumont, Texas.

The 50-50 joint venture is expected to invest about $55 million in the project's first phase, which will focus on storage and throughput capabilities for multiple grades of ethanol, according to the companies' press release.