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9/30/2005



Rail News: Rail Industry Trends

Class Is' service metrics still show pluses and minuses, Smith Barney/Citigroup says



Thirty-eight weeks into 2005, six of the seven Class Is continue to have difficulty raising average train speed, according to Smith Barney/Citigroup's latest ground transportation research report.

During the period ending Sept. 23, average velocity stood at 23.2 mph for Kansas City Southern, down 11.7 percent; 23.6 mph for BNSF Railway Co., down 6.2 percent; 22.0 mph for Norfolk Southern Corp., down 4.1 percent; 19.4 mph for CSX Transportation, down 4.0 percent; 21.4 mph for Union Pacific Railroad, down 1.7 percent; and 24.4 mph for Canadian Pacific Railway, down 1.0 percent compared with 2004’s first 38 weeks. Only Canadian National Railway Co. has boosted train speed — 4.4 percent to 25.5 mph.

"Velocity at CPR is down 5.2 percent quarter-to-date and may remain down through year end as they lap challenging comparisons in the fourth quarter," said Smith Barney/Citigroup Managing Director and Progressive Railroading columnist Scott Flower in the report. "With this year’s grain crop expected to be of higher quality — resulting in greater grain movements — train speeds may suffer as grain moves at a slower-than-average velocity."

Excluding CN and UP, all the Class Is continue to operate more cars on line compared with the same 2004 period. Through 38 weeks, KCS’ cars on line increased 9.2 percent to 27,672 units; NS’, 5.3 percent to 192,969 units; BNSF’s, 3.8 percent to 207,767 units; CPR’s, 1.6 percent to 67,918 units; and CSXT’s, 0.4 percent to 234,096 units compared with the same 2004 period. CN’s and UP’s cars on line decreased 1.4 percent to 110,516 units and 1.1 percent to 319,436 units, respectively.

Meanwhile, CN, UP, CPR and KCS are leading the pack in average terminal dwell times. Through 38 weeks, CN’s system-wide average of 13.3 hours dropped 7.6 percent, UP's average of 28.3 hours decreased 6.5 percent, KCS’ average of 25.8 hours declined 5.8 percent and CPR’s average of 29.2 hours fell 0.5 percent compared with 2004’s first 38 weeks. NS’ average increased 4.9 percent to 23.3 hours, CSXT’s average terminal dwell time rose 4.8 percent to 29.8 hours and BNSF’s average went up 1.2 percent to 10.0 hours.


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