Railroad News

9/9/2016    

Rail News: Kansas City Southern

Kansas City Southern announced Wednesday that it will spend $13 million this year on construction and improvement projects on its Greenville subdivision in Texas and Louisiana.

KCS has slated rail, crosstie and crossing improvements between Leesburg, Texas, and Blanchard, La., starting Aug. 23 through September, according to a company press release.

Kansas City Southern de Mexico, S.A. de C.V., a subsidiary of Kansas City Southern, has experienced service interruptions due to civil protests near its rail network in Mexico, railroad officials announced yesterday.

Led by teachers, the civil disobedience protests that have blocked freight trains are directed at the Mexican government over education reforms, according to news reports.

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.

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.

Meridian Speedway LLC, a joint venture between Kansas City Southern and Norfolk Southern Railway, will invest $28 million in construction and improvements on the Vicksburg and Meridian subdivisions, KCS announced yesterday.

The joint venture is a 320-mile rail line between Meridian, Miss., and Shreveport, La., offering end-to-end steel wheel interchange for intermodal customers.

The BMW Group yesterday held a groundbreaking ceremony in San Luis Potosi for its first auto manufacturing plant in Mexico.

To launch production in 2019, the $1 billion plant will be served by Kansas City Southern de Mexico S.A. de C.V. (KCSM). The facility will be used to build the automaker's best-selling model, the BMW 3 Series Sedan. The plant's annual production capacity is projected at up to 150,000 vehicles.

Kansas City Southern yesterday announced Patrick Ottensmeyer will succeed David Starling as chief executive officer effective July 1. Starling will serve as senior adviser to Ottensmeyer until Starling retires on Dec. 31.

Ottensmeyer will retain the position of president, a title he's held since March 1, 2015. Starling will remain a member of KCS' board until May 2017. Ottensmeyer will join the board when he becomes CEO.

Despite facing lower carload volumes and flooding issues during the period, Kansas City Southern reported higher profit during first-quarter 2016 compared with first-quarter 2015.

KCS announced this morning that Q1 2016 net income rose to $108 million, or 99 cents per diluted share, from $101 million, or 91 cents per diluted share, in Q1 2015.

Kansas City Southern Railway Co. (KCSR) will spend $20 million on construction and improvement projects on its main line from Kansas through Missouri, Oklahoma, Arkansas and northwest Louisiana, the railroad announced yesterday.

The projects include replacement of 6 miles of rail and 92,400 cross ties, as well as improvements to more than 100 grade crossings. Work will begin April 19 and end in mid-June, according to a KCSR press release.

Rangeland Energy is developing a South Texas Energy Products System (STEPS) terminal in Corpus Christi, Texas, on Kansas City Southern's main line, the Class I announced last week on its website.

The terminal is expected to begin service in first-quarter 2017 for initial manifest shipments.

Watco Cos. LLC has reached an agreement with WTC Industrial to design, build and operate a new, public unit-train liquid fuels terminal and general cargo facility at WTC Industrial Park in San Luis Potosi, Mexico.

The terminal will be located on Kansas City Southern de Mexico's (KCSM) main line and will have the capacity to unload one unit train per day in Phase I, company and WTC Industrial officials announced yesterday in a press release.

Kansas City Southern has promoted Jeffrey Songer from senior vice president engineering and chief transportation officer to executive VP and chief operating officer, the Class I announced yesterday.

In addition to his responsibilities for transportation and engineering, he is now responsible for the mechanical function. Songer reports to KCS President Patrick Ottensmeyer, according to a KCS press release.

David Garza, chairman and chief executive officer of Maquinaria Diesel SA de CV (MADISA), has been elected to serve on Kansas City Southern's board, the railroad announced yesterday.

Garza was chosen to join the board after a thorough search process that lasted throughout 2015, said KCS Chairman Robert Druten in a press release.