Railroad News

Kansas City Southern employs PSR to improve service performance, forge a traffic-growth foothold

The new mantra "service begets growth" was developed by KCS to emphasize the correlation between optimal operational performance and accelerated business generation. Senior execs believe a fluid and resilient railroad is much better positioned to capitalize on traffic-growth opportunities.Photo – Kansas City Southern

By Jeff Stagl, Managing Editor

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BMW opens KCSM-served plant in Mexico

Rail News Home Kansas City Southern 6/13/2019 Rail News: Kansas City Southern
image KCSM operates more than 2,000 miles of track in Mexico, where it expects to serve 14 automotive plants by next year.Photo – Kansas City Southern

BMW Group and Mexican government officials last week marked the opening of the automaker's new plant in San Luis Potosi, Mexico.

To be served by Kansas City Southern de Mexico (KCSM), the more than $1 billion plant is designed to produce up to 175,000 vehicles annually. The facility will be used to produce the BMW 3 Series Sedan, the company's most successful model series, BMW Group officials said in a press release.

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From the editor: Ottensmeyer to receive 2019 Railroad Innovator Award

By Pat Foran, Editor

Progressive Railroading and RailTrends® have named Kansas City Southern President and Chief Executive Officer Patrick Ottensmeyer the 2019 recipient of the Railroad Innovator Award, which recognizes an individual’s outstanding achievement in the rail industry. KCS’s president since 2015 and CEO since 2016, Ottensmeyer has helmed the railroad during a pivotal stretch in its history.

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UP and KCS: A tale of two PSR interpretations — analysis by Tony Hatch

Tony Hatch is an independent transportation analyst and consultant, and a program consultant for Progressive Railroading’s RailTrends® conference.

Last month, two western (well, west of the Mississippi) railroads reported above-consensus first-quarter earnings: Kansas City Southern, which grew year over year (YOY) by 18 percent (adjusted, versus Street estimates of around 10 percent); and Union Pacific Railroad, in its weather-dominated quarter, by 15 percent YOY (versus around 12 percent). KCS lowered its operating ratio by 160 basis points (bps) to (adjusted) 64.2, and UP lowered its OR by a point — having absorbed a 160bps weather impact — to 63.6. It was also noted that “at Union Pacific, we do not include real estate sales in our OR.” Zing! But more than the results — it was the differing tones and tenors of the earnings' webcasts that struck me.

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KCS appoints new leaders of chemical and petroleum, industrial and consumer groups

Kansas City Southern has reorganized its leadership in charge of the chemical, petroleum, industrial and consumer commodity groups, the Class I announced today.

KCS has appointed Ginger Adamiak vice president of energy and chemical products, adding chemical and petroleum in the United States and Mexico to her responsibilities. She previously served as VP energy, industrial development and innovation.

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KCS revises two service metrics

Rail News Home Kansas City Southern 5/1/2019 Rail News: Kansas City Southern
image As part of the railroad's precision scheduled railroading transition, Kansas City Southern has revised the definitions of two service metrics it uses to measure operating performance, KCS officials announced on Monday. "Operational Cars Online" (formerly "Cars Online”) is a metric representing the number of rail cars on the KCS network that are not at a customer’s location. "Gross Velocity (formerly "Train Speed") is a metric measuring the average velocity of a train between its origin and destination, calculated as the sum of the miles traveled divided by the sum of total transit hours.  Transit hours are measured by calculating the difference between a train's origin departure and destination arrival date and times broken down by segment across the train route. This metric includes all time spent at intermediate locations between a train origin and destination, including all crew changes, terminal dwells, delays and incidents. “These revised metrics will give stakeholders a more accurate understanding of [our] operational performance as we strive to improve customer service,” KCS Executive Vice President of Precision Scheduled Railroading Sameh Fahmy said in a prepared statement.  

Contact Progressive Railroading editorial staff.

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KCS posts 'strong' Q1 results

Kansas City Southern today reported record first-quarter revenue of $675 million, up 6 percent from the prior year on a 1 percent decline in volume.

KCS attributed an overall decline in carload volumes primarily to service interruptions at Lazaro Cardenas in Mexico that were caused by teacher protests, company officials said in a press release.

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KCS to use crew management software for U.S. operations

Rail News Home Kansas City Southern 3/27/2019 Rail News: Kansas City Southern
imageKansas City Southern will expand its deployment of the CloudMoyo crew management (CCM) software solution to its U.S. operations, the Class I announced yesterday.The software is already in place at KCS' Mexico operations. The next generation global CCM is designed to leverage the scale of the Microsoft Azure Cloud platform, harness the power of advanced analytics, and use artificial intelligence and machine learning technologies to optimize crew assignments and reduce dwell time for trains and crew, according to a KCS press release.“KCS’ vision is to consistently be the fastest-growing, best-performing, most customer-focused transportation provider in North America. The planned expansion of the CCM solution from Mexico to the U.S. supports this growth vision while delivering a seamless user experience,” said KCS Executive Vice President and Chief Innovation Officer Brian Hancock.KCS officials anticipate the CCM solution will help the railroad bypass lengthy deployment schedules, they said. It will enable KCS crews in the United States and Mexico to work more effectively and securely across geographical locations, while still being flexible to operate independently on regional basis, they added.

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KCS issues statement on Mexican competition panel's rail-service report

Rail News Home Kansas City Southern 3/25/2019 Rail News: Kansas City Southern
imageThe Mexican Federal Competition Commission (COFECE) has issued a preliminary report that assesses freight-rail service for certain chemical and petrochemical products shipped on certain routes in the Mexican state of Veracruz, Kansas City Southern confirmed late last week.The preliminary report is limited to 31 routes with each route tied to a specific product. Kansas City Southern de Mexico (KCSM) serves limited portions of seven of the routes. Last year, KCS' revenue associated with those routes amounted to less than $3 million, company officials said in a press release.The report's issuance has no impact on KCSM's current business, operations or rights under the concession.KCSM officials plan to file a challenge to the preliminary report. If the COFECE panel confirms a "lack of effective competition" on any of the routes identified in the report, then Mexico's Railway Regulatory Agency would initiate remedies that could include mandatory trackage rights, service conditions and rates, KCS officials said.

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KCS: Financial records in 2018, PSR in 2019

Today, Kansas City Southern reported record fourth-quarter revenue of $694 million, up 5 percent compared with the total in fourth-quarter 2017.

The Class I also registered record adjusted operating income of $248 million, up 4 percent, and record adjusted earnings per share of $1.56, up 13 percent  year over year. In addition, KCS’ operating ratio improved 0.9 points to 63.1, although the adjusted ratio inched up 0.3 points to 64.3.

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Kansas City Southern's Wochner to retire as SVP, chief legal officer

Kansas City Southern yesterday announced the retirement of W. James Wochner as senior vice president and chief legal officer, effective March 31, 2019.

In addition, Adam Godderz will be promoted from associate general counsel and corporate secretary to general counsel and corporate secretary for KCS and the Kansas City Southern Railway Co. on Jan. 1, 2019, company officials said in a press release.

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Kansas City Southern to kick off Holiday Express tour

Kansas City Southern's 18th annual Holiday Express will distribute a total of $171,756 in gift cards to The Salvation Army at stops along its route starting Nov. 21.

The holiday train will visit 22 communities on 27 dates, starting in Shreveport, Louisiana, and wrapping up Dec. 18 in Kansas City, Missouri. Other stops in other states include Mississippi, Texas, Arkansas, Oklahoma, Kansas and Illinois. A complete schedule is available on the KCS website.

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Kansas City Southern recognized for IT innovation

Kansas City Southern has been recognized as one of the 2018 CIO 100 for exemplifying operational and strategic excellence in information technology (IT).

KCS will be honored at the CIO 100 Symposium & Awards Ceremony to be held Aug. 15 in Rancho Palos Verdes, California. Each year, the IDG's CIO highlights technology innovation and business value delivered by the award winners.

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Kansas City Southern slates projects for Texas, Louisiana

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.

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Kansas City Southern's Mexican rail operations blocked by protesters

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.

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Kansas City Southern posts higher profit, flat carload volume in Q2

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.

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Joint venture to construct intermodal fuel terminal in Beaumont, Texas

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.

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Meridian Speedway rail line preps for upgrades in Louisiana, Mississippi

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.

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BMW begins to build auto plant in Mexico on KCSM line

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.

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Kansas City Southern's Starling to retire Dec. 31, Ottensmeyer named successor


David Starling

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.

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