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5/9/2014



Rail News: HomePage

Four Class Is seek to get well beyond one of the worst winters on record


Now that Norfolk Southern Corp. has persevered through the "most severe winter in years," business is rebounding, led by intermodal, energy-related markets and an automotive market that's gaining strength, said Chairman and Chief Executive officer Wick Moorman yesterday at the Class I's annual stockholders meeting today in Williamsburg, Va.

"I'm happy to report that the Norfolk Southern operating team came through [the winter] with flying colors. The result is that today, our operating metrics are much improved and we are steadily progressing to the high service levels we and our customers enjoyed last year," he said, according to a press release.

After the cold weather departed, NS' business rebounded almost immediately, said Moorman.

"I'm confident that 2014 will be another very good year for our company," he said.

Union Pacific Railroad is distancing itself from winter's doldrums, too. Resources deployed over the past several months are aiding the Class I's operational recovery efforts and improving operations, UP officials said in a customer advisory issued on Wednesday.
 
Train-delay hours in the Northern Region have been reduced significantly over the past several weeks. At its worst, train-delay hours increased two-and-a-half times compared with the beginning of the year, UP officials said.

"We have eliminated 85 percent of the excess delay, and we are showing continued improvement as we return to normalized operations," they said.

Velocity has increased, as well, and is expected to keep rising as the network becomes more fluid. The railroad has gained more than 1 mph from its lowest velocity in a week this year and now is reaching an Association of American Railroad-reported 24.4 mph, UP officials said.

With train-delay hours down and velocity up, freight-car inventory levels are falling and overall service levels are improving, they said.

CSX Corp. also is expecting better days ahead after the harsh winter, Executive Vice President and Chief Financial Officer Fredrik Eliasson told attendees yesterday at Bank of America Merrill Lynch's Global Transportation Conference in Boston.

"With winter behind us, volume growth has picked up strongly, and we have visibility to several million new tons of domestic coal as inventories are normalizing and natural gas prices have risen," he said, according to a press release. "With the broader economy remaining healthy and with this improved environment for our domestic coal business, we expect to produce modest earnings growth in 2014."

Expectations for 2014 represent the ninth time in the past 10 years that CSX will produce earnings growth, despite a 55 percent loss in domestic coal volume over the past several years, said Eliasson.

"We have emerged from the reshaping of the energy markets as a stronger, more flexible and more customer-driven company," he said. "CSX is well positioned to deliver compelling results for our shareholders as we support manufacturing renewal, energy independence and global trade."

Meanwhile, Canadian Pacific CEO E. Hunter Harrison yesterday said that sending grain cars to a congested terminal like Chicago this past winter would have significantly impacted the supply chain's ability to move grain to the benefit of Canadian farmers. Last year was a record crop for the grain supply chain.

"The reality is that Canada's grain handling system is just not built to handle this record amount of grain and CP is moving all the grain the supply chain can currently handle," said Harrison. "CP is moving grain in all available lanes but we need to move grain to fluid outlets with strong cycle times to move as much grain as possible as quickly as possible."

Harrison believes that direct face-to-face discussions based on facts are the best way to make progress on strengthening Canada's grain handling and transportation system.

"We need constructive dialogue instead of the ongoing back and forth that is happening in the media among various parties," he said. "CP has reached out to customers and other stakeholders, including the Western Grain Elevator Association, and looks forward to further constructive dialogue in person."

CP continues to meet or exceed the Canadian government's order to move about 5,500 grain cars per week. Compared with a five-year average, the railroad has moved 15 percent more grain from September through April, said Harrison. In addition, CP has added capacity from Winnipeg to Chicago this spring to support the strong demand for Canadian grain into the United States.



Contact Progressive Railroading editorial staff.

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