Kansas City Southern (KCS) reported 2Q20 revenues of $547.9 million, a decrease of 23% from 2Q19, primarily as a result of an overall decline in demand due to COVID-19. Overall, carload volumes were down 21% compared to the prior year.
According to a report in tpgonlinedaily.com, Progressive Rail wants out of the 10-year contract it signed in 2018 with the Santa Cruz County Regional Transportation Commission to run the Santa Cruz branch line, which worries Big Creek Lumber, one of its freight customers in Watsonville.
Bombardier Transportation has been awarded a $43 million contract by the North County Transit District (NCTD) for 11 new commuter rail cars for the COASTER service.
“We view concerns around Kansas City Southern’s concession in Mexico as overblown. The exclusivity provision cannot be revisited until 2027 and the concession remains in effect for 20 years after that. Further, KSU is improving its operations via PSR, which should aid Mexico as reliable rail service is likely to be a necessity for the country as it grows its manufacturing base. Reiterate Outperform.”
The Association of American Railroads (AAR) reported U.S. rail traffic for the week ended July 11, 2020, and, for this week, total U.S. weekly rail traffic was 449,092 carloads and intermodal units, down 14.9% compared with the same week last year.
A majority of U.S. adults believe that the freight rail industry is critically important to the U.S. economy, according to a newly released poll conducted by Morning Consult on behalf of the Association of American Railroads (AAR). In addition, more than 75% percent of respondents view the industry as safe, “validating years of private investment that have corresponded with dramatic safety gains.”
RAILWAY AGE, JULY 2020 ISSUE: Friction management improves safety, serves as a cost reduction driver, reduces noise pollution and extends rail life. Curving physics involving the wheel/rail interface are basic: When a train passes through a curve, it generates forces that want to push the rails out of gauge. The magnitude of the force is directly related to axle loads.
“Order expectations by the shipper sub-group of railcar buyers were mixed. While a smaller percentage expects to order railcars, the certainty level about ordering has increased. Among railcar suppliers, we favor Trinity for the flexibility of its manufacturing/leasing model, and Greenbrier for its international diversification and cost cutting. GATX’s lease terms offer it some protection.”
“Shippers expect rail price increases of 2.3%, up 40bps sequentially, above rail cost inflation, but well below the survey’s average. Economic expectations are all higher sequentially; some remain below the survey’s average while some are very positive indicators. With PSR cost-cutting, growth opportunities and the ability to capitalize on supply chain near-shoring, Kansas City Southern remains our top rail pick.”
The California High-Speed Rail Authority (CHSRA) is releasing its second project-level Draft Environmental Impact Report/Environmental Impact Statement (EIR/EIS) for the 49-mile project that would provide service between the Salesforce Transit Center in San Francisco and the San Jose Diridon Station. The document for the Northern California project section will be available for public comment starting Friday, July 10.