Railroad News

CN has submitted an application to the Canadian Transportation Agency for approval of the Class I's proposed logistics hub in Milton, Ontario.

The application outlines the infrastructure required for the $250 million project (in Canadian dollars) and what CN anticipates will be the economic benefits of the logistics hub, CN officials said in a press release.

Canadian Pacific expects to reduce its workforce by about 1,000 employees in 2016, company officials said during an earnings conference call with analysts yesterday.

The job reductions are necessary to adjust to lower traffic volumes. Positions will be eliminated across the board, but most of the unionized positions will be eliminated by attrition, said Chief Executive Officer E. Hunter Harrison. Most of the cuts will have kicked in by the middle of 2016, he said.

A decrease in traffic volume, a hurricane in Mexico and flooding in the United States resulted in Kansas City Southern posting lower revenue, profit and earnings for the fourth-quarter and full year in 2015, the company announced this morning.

KCS posted fourth-quarter 2015 net income of $140 million on revenue of $598 million, compared with net income of $142 million on revenue of $642.5 million for the same period in 2014, according to a KCS press release.

Pricing gains weren't enough to offset the decline in traffic volume in fourth-quarter 2015 at Union Pacific Railroad. As a result, UP posted net income of $1.1 billion, or $1.31 per diluted share for the period, compared with $1.4 billion, or $1.61 per diluted share, in fourth-quarter 2014, the railroad announced this morning.

Operating revenue for the quarter fell 15 percent to $5.2 billion compared with Q4 2014. Fourth-quarter business volumes — measured by total revenue carloads — declined 9 percent in 2015 compared with a year ago. Volumes fell in each business group except for automotive. Coal led the decline; freight revenue for that category fell 31 percent, according to the company's press release.

CSX Corp. announced yesterday that it's consolidating operations administration from 10 divisions to nine divisions and closing administrative offices in Huntington, W.Va.

Huntington Division administration will be reassigned to the Atlanta, Baltimore, Florence, Great Lakes and Louisville divisions, the company said in a press release.

CSX will develop a major freight-rail intermodal terminal in Johnston County, N.C., the company and Gov. Pat McCrory announced yesterday.

The proposed "Carolina Connector," or CCX, will serve as an intermodal transportation hub in the south, transferring a range of goods — from food to furniture to appliances — between trucks and trains, CSX officials said in a press release.

Effective Feb. 1, Norfolk Southern Corp. will consolidate its Virginia and Pocahontas divisions to form a new Pocahontas Division, with its headquarters in Roanoke, Va., the Class I announced yesterday.

The consolidation is part of the company's efforts to improve operating efficiency and support long-term growth, according to an NS press release.

CSX Corp.'s fourth-quarter 2015 revenue and profit were down compared with the same quarter in 2014, but the Class I's results beat Wall Street's expectations.

CSX reported yesterday that fourth-quarter 2015 net earnings declined 5 percent to $466 million, or 48 cents per share, compared with $491 million, or 49 cents per share, in the prior year's quarter.

Kansas City Southern Railway Co. (KCSR) will spend about $15 million this year on rail and bridge improvements at the Beaumont Subdivision between DeQuincy and DeRidder, La., Kansas City Southern (KCS) announced yesterday. 

The projects are aimed at increasing capacity and maintaining and enhancing safety on Kansas City Southern's cross-border network, company officials said inn a press release.

CSX yesterday announced new leadership appointments to its sales and marketing organization.

Dean Piacente has been named vice president-intermodal; Clark Robertson, VP-chemicals; and Tim McNulty, VP-agriculture. All three will report to Fredrick Eliasson, executive VP and chief sales and marketing officer, according to a CSX press release.

CSX worked with customers to locate 107 new plants or expanded facilities — projects worth $2.2 billion in customer investments — on the company's rail network last year, the Class I announced yesterday.

The new projects are expected to generate 1,500 new jobs in CSX-served areas, CSX officials said in a news release.

CN has submitted its environmental impact statement (EIS) to the Canadian Environmental Assessment Agency (CEAA) for a proposed logistics hub to be built in Milton, Ontario, the Class I announced yesterday.

The EIS describes measures the railroad plans to adopt to lessen the environmental impact of the $250 million (in Canadian dollars) project. Those measures include:
• an approximately 1-mile private road to be constructed on CN property to avoid truck queuing on public roads;
• a new underpass to be built for Lower Base Line to minimize the impact on commuters traveling in east and west directions past the hub;
• raised earthen berms topped off with native Ontario vegetation and trees to reduce the effects of noise and blend into the natural environment of the area;
• enhancements to be made to Indian Creek's natural habitat; and
• environmentally advanced technology and design in the hub, such as solar panels, rainwater capture, natural and LED lighting.

The National Transportation Safety Board (NTSB) has determined that Union Pacific Railroad's failure to conduct a risk assessment of a new control point (CP) signal installation contributed to a collision of two UP trains in 2014, the agency announced in a report last month.

The incident occurred in September 2014 near Galva, Kan., when an eastbound UP train collided with the side of a westbound UP train, according to the NTSB's executive summary of its investigative report.

Industry organizations that represent major customers of Norfolk Southern Corp. have asked the Surface Transportation Board to reject Canadian Pacific's hostile takeover bid, according to the Reuters news agency.

Reuters reviewed copies of the letters, which have not been made public. Sent last month, the letters revealed customers' concerns over CP's cost-cutting plans, the impact on service and the potential for higher prices for customers, the news agency reported.

Although Kansas City Southern will face many of the same economic challenges in 2016 that it faced in 2015, the company's "strong financial and operational footing" is well-positioned for growth. As a result, KCS will proceed with many of its planned strategic capital expenditures, the Class I's top executives said yesterday in a letter to KCS employees.

In their "State of the Railroad" report, KCS Chief Executive Officer David Starling and President Patrick Ottensmeyer said the economic challenges ahead result in the company's cautious outlook for the new year.

The Florida Department of Transportation (FDOT) will host a public meeting today on alternatives for a proposed railroad overpass in the city of Starke.

The meeting is being held as part of FDOT's project development and environment study for the possible overpass and potential locations, FDOT officials said in a press release.

Inadequate track conditions led to a CN train derailment near Faust, Alberta, in June 2014, the Transportation Safety Board (TSB) of Canada announced yesterday in its report.

The derailment resulted in no injuries or product release. Approximately 1,200 feet of track was damaged in the incident, however.

[Editor's note: This story has been updated to include CP's response, which was issued this afternoon.]

Norfolk Southern Corp.'s board has unanimously rejected Canadian Pacific's latest merger proposal, NS officials announced today.

The Andersons Inc. announced yesterday that it will begin an expansion of its ethanol facility in Albion, Mich.

The expansion project will double the facility's capacity, Anderson officials said in a press release. The facility is served by Norfolk Southern Railway.

More than 1,500 first responders along CN's network have downloaded the AskRail mobile app to access real-time information about the contents of rail cars in their communities, the Class I announced today.

Emergency responders are the only people eligible to sign up for the app, which was developed by the Association of American Railroads. The app enables responders to view rail-car contents through a simple search, and provides railway emergency contact information and reference resources to support incident response.