News / North American rail freight operators steam ahead with positive H1 results

Photo: © Nico Maglieri

Results from North American rail freight operators for the first half of the year make healthy reading after intermodal rail traffic lost out to cheaper trucking alternatives in 2016.

And it seems Hunter Harrison has had an immediate effect at US operator CSX, where he was appointed chief executive in March following his resignation from Canadian Pacific.

CSX recorded 2% growth in volumes, with revenues per unit up 4%, while total intermodal revenues increased 7% year-on-year, taking the carrier back to its previous growth rate, which, prior to 2016, had seen a decade of average annual growth of about 7%.

Mr Harrison said CSX was implementing “Precision Scheduled Railroading” on an expedited timetable as part of a major overhaul of operations.

“We are converting switching operations, balancing the network, streamlining resources and getting more out of our assets,” he said.

“Although there still remains a lot to be done, we are confident that these initiatives will drive improved customer service, greater resource efficiency and superior shareholder value.”

Rival rail operator Union Pacific also saw revenue-growth, of 3% year-on-year, despite just a 1% upturn in volumes.

But in the mid-west things weren’t so rosy. Kansas City Southern reported declines across the board as revenue and volumes dropped by 1% – although this was an improvement on 2016’s 5% decline.

And while Norfolk Southern has yet to issue its six-month figures, results from the three months to March indicated a positive start to the year, with revenues up 9% against volume growth of 4%.

In Canada, both Canadian Pacific (CP) and Canadian National (CN) maintained the overall optimistic tone of the year so far.

CP saw revenues climb 6%, against a 4% volume increase, but CN stood out, with revenues and volumes spiking 12% year-on-year – although revenues per carload dipped marginally.

The carrier’s president and chief executive, Keith Creel, praised the results, also saying they demonstrated the “power of precision railroading”.

“Strong volumes across many of our key business segments, combined with disciplined cost control, produced record operating income and earnings for the quarter,” said Mr Creel.

“We are off to a strong start in 2017 and remain confident that our team of committed railroaders will continue to safely and efficiently deliver results in the second half of the year, and beyond.”