Reynolds Hutchins, Associate Editor | Jul 21, 2016 2:33PM EDT
Following double-digit dives in profit and revenue in the second quarter, Union Pacific Railroad said Thursday that despite shippers pulling down inventory, it doesn’t expect the soft freight economy to improve until at least 2017 now.
“I think if you look at the absolute volumes, they are not strong,” Eric Butler, UP’s executive vice president and chief marketing officer, said on an earnings conference call with analysts and investors Thursday morning.
Intermodal freight traffic was down 14 percent year-over-year in the second quarter, contributing to a 16 percent decline in related revenue, which rounded out the quarter at $909 million, the railroad reported.
It also contributed to a 19 percent year-over-year decline in profit. The railroad’s net income for the quarter was $979 million. Meanwhile, overall revenue also fell some 12 percent to $4.77 billion.
Reynolds Hutchins, Associate Editor | Jul 20, 2016 3:56PM EDT
Canadian Pacific Railway’s financials took a hit in the second quarter, rounding out a rough first half of 2016, thanks in part to declining intermodal business, a stronger Canadian dollar and devastating wildfires in the Alberta province.
“The second quarter, I think we all recognize has been quite challenging. In fact, this whole first of the year has been quite challenging,” CP CEO E. Hunter Harrison told analysts and investors on a second-quarter earnings conference call Wednesday morning.
Reynolds Hutchins, Associate Editor | Jul 14, 2016 12:14PM EDT
Efforts to attract new intermodal business were not enough to slow the loss of volume and profit at CSX Transportation in the second quarter, and executives say they don’t expect the bloodletting to stop until sometime next year. Other Class I railroads in the coming weeks are expected to report declining profits, partly because of weakness in intermodal traffic.
CSX reported a nearly 20 percent year-over-year decline in second-quarter profit this week to $445 millino, as total freight volume fell 9 percent over the same period. That 9 percent decline was led by double-digit losses in coal volume, down some 34 percent, but the railway’s intermodal business still contributed to the subpar quarter.
Total intermodal volume in the second quarter was down 4 percent to 694,000 units. Related revenue also suffered, down 7 percent to $419 million.
By Jeff Stagl, Managing Editor
When it comes to rolling stock, a lot less of it was rolling on Class Is' networks in the second quarter. The large roads stored more locomotives and rail cars than they had at the same point in 2015, mostly because their traffic is down considerably.
Through 2016's first 24 weeks, U.S. carloads were down 13.3 percent to 5.8 million units and Canadian carloads were down 11.2 percent to 1.7 million units compared with figures from the same 2015 period, according to Association of American Railroads data.
Reynolds Hutchins, Associate Editor | Jul 19, 2016 4:36PM EDT
Like many of its competitors, Kansas City Southern Railway found the second quarter a dud for intermodal volume growth, with traffic dipping 1.5 percent year-over-year.
The Missouri-based railway still reported Tuesday better-than-expected second-quarter profit, thanks in large part to cost-cutting initiatives and a rebound in service after floods slowed the railroad’s cross-border network earlier in 2016.
Second-quarter net income was up 10 percent year-over-year to $120.1 million, KCS executives said on their quarterly earnings call Tuesday morning.
The STB proposed on July 27th, a similar regulation like the Fair Shippers Act in Canada, which allows reciprocal switching at all rail locations.
By Jeff Stagl, Managing Editor
The changing of the guard among Class I chief executive officers continued last month. CN President and CEO Claude Mongeau stepped down June 30 due to issues with his health and the position’s demands.
On July 1, Executive Vice President and Chief Financial Officer Luc Jobin took the helm at CN. That same day, Kansas City Southern President Patrick Ottensmeyer became CEO, succeeding David Starling, who will serve as a senior adviser until he retires at year’s end.