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Rail News: Rail Industry Trends

Class Is continue to add cars on line, Smith Barney/Citigroup says

During 2005’s first 19 weeks, Class Is’ cars on line increased an average of 3 percent compared with the same 2004 period, according to Smith Barney/Citigroup's latest ground transportation research report. Kansas City Southern’s cars on line increased 7.7 percent to 27,426 units and Norfolk Southern Corp.’s rose 6.9 percent to 195,500 units.

“We attribute [NS’ rise] to a combination of strong carload growth and deteriorating service metrics (i.e., average train speeds and terminal dwell times),” said Smith Barney/Citigroup Managing Director and Progressive Railroading columnist Scott Flower in the report.

Among the other Class Is through the year-to-date period ending May 13, Canadian Pacific Railway’s cars on line increased 3.7 percent to 69,561 units; BNSF Railway Co.’s, 3.2 percent to 202,763 units; and CSX Transportation’s, 1.4 percent to 234,750 units compared with the same 2004 period. Union Pacific Railroad’s and Canadian National Railway Co.’s cars on line dropped 1 percent to 320,374 units and 0.1 percent to 113,506 units, respectively.

“Union Pacific’s network fluidity has improved, helping to drive greater traffic volumes,” said Flower. “A sustained decline in cars on line would allow the railroad to terminate expensive short-term leases on locomotives.”

In the average train speed department, the U.S. Class Is continue to struggle while the Canadian large roads continue to thrive, the report states. Through 19 weeks, average velocity stood at 24.3 mph for KCS, down 10.1 percent; 24.0 mph for BNSF, down 6.4 percent; 19.4 mph for CSXT, down 6.2 percent; 21.8 mph for NS, down 5.8 percent; 21.3 mph for UP down 2.4 percent; 24.7 mph for CN, up 3.6 percent; and 24.5 mph for CPR, up 1.1 percent compared with 2004’s first 19 weeks.

“BNSF’s average train speeds have failed to approach the levels of last year and have followed an up-and-down pattern in recent weeks,” said Flower.

Meanwhile, UP and CN are the only Class Is that continue to reduce average terminal dwell times on a year-over-year basis. Through 19 weeks, CN's average (based on nine terminals) of 14.0 hours decreased 5.1 percent and UP's average (13 terminals) of 28.8 hours dropped 4.7 percent compared with 2004’s first 19 weeks. CSXT's average (12 terminals) rose 9.8 percent to 30.1 hours; NS’ (14 terminals) went up 7.4 percent to 24.4 hours; CPR’s (nine terminals) increased 6.4 percent to 33.8 hours; BNSF’s (11 terminals) rose 1.6 percent to 9.9 hours; and KCS’ (four terminals) increased 0.7 percent to 27.3 hours.

Contact Progressive Railroading editorial staff.

More News from 5/19/2005