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6/23/2005



Rail News: Rail Industry Trends

Nearing 2005's midpoint, most Class Is' service metrics remain on uphill slope, Smith Barney/Citigroup says


About halfway through 2005, average train speeds for three of the four largest U.S. Class Is have dropped more than 5 percent compared with the same 2004 period, according to Smith Barney/Citigroup's latest ground transportation research report.

During the year’s first 24 weeks, BNSF Railway Co.’s, Norfolk Southern Railway’s and CSX Transportation’s average velocity declined 5.8 percent, 5.1 percent and 5.1 percent, respectively. Kansas City Southern’s and Union Pacific Railroad’s average velocity decreased 11.1 percent and 2.1 percent, respectively, during the period.

“UP is making some headway in their operational turnaround — train speeds have improved 6.5 percent to date in the second quarter versus last year,” said Smith Barney/Citigroup Managing Director and Progressive Railroading columnist Scott Flower in the report.

Meanwhile, the Canadian Class Is continued to boost train speeds. Canadian National and Canadian Pacific railways’ average velocity rose 4.3 percent and 1.1 percent, respectively, compared with 2004’s first 24 weeks.

Excluding CN and UP, the Class Is still are operating more cars on line compared with last year. Through 24 weeks, KCS’ cars on line increased 8.7 percent to 27,490 units; NS’, 6.8 percent to 194,946 units; CPR’s, 3.7 percent to 69,538 units; BNSF’s, 3.0 percent to 203,956 units; and CSXT’s, 1.0 percent to 234,997 units. UP’s and CN’s cars on line decreased 1.1 percent to 319,914 units and 0.2 percent to 112,729 units, respectively.

CN and UP also are two of three Class Is — the other, KCS — to reduce average terminal dwell times on a year-over-year basis. Through 24 weeks, UP’s system-wide average of 28.4 hours dropped 5.9 percent, CN's average (based on nine terminals) of 13.7 hours decreased 5.4 percent and KCS’ system-wide average of 26.5 hours fell 2.3 percent compared with the same 2004 period. The system-wide averages of CSXT, NS, CPR and BNSF rose 7.8 percent to 30.2 hours, 6.6 percent to 24.0 hours, 4.5 percent to 32.5 hours and 0.6 percent to 10.0 hours, respectively.

“Looking ahead, [NS’] initiation of the Thoroughbred Operating Plan 2, which is primarily focused on the company's intermodal business, may result in improved service metrics via greater asset utilization and network fluidity,” said Flower “However, we remain wary on exactly how much incremental improvement can be squeezed out of the system.”


Contact Progressive Railroading editorial staff.

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