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for Union Pacific Units Tier 4 Tests
Union Pacific’s first new Tier 4-compliant ET44AC locomotive No. 2570, was captured on General Electric’s test track near Harborcreek, Pa., on October 19, 2015. The production for these units began full stride in November, as part of a new order for 100 units. The Environmental Protection Agency is enforcing the new Tier 4 guidelines in an effort to significantly reduce emissions and boost efficiency.
PHOTO BY STEPHEN KOENIG
KANSAS CITY SOUTHERN DANNY JOHNSON
Grain Business Booming
Observers along virtually all portions
of the KCS network have reported a significant increase in grain business coincident with the harvest season. Extra grain movements have been noted all over the system. Some of the more unusual trains have been operating between Lansing Grain near Delhi, La., and Valdosta, Ga., with a mix of KCS, Canadian National, and Norfolk Southern power. With the harvest still ongoing, the frequency and variety of grain movements are expected to continue for weeks to come.
Former GM&O Maintenance Project
A significant number of projects moved forward on the Tuscaloosa, Ala., to Aberdeen, Miss., route between October and the end of November. This segment of the KCS is former Gulf, Mobile & Ohio trackage, and until recently was one of the lighter traffic segments of the KCS. With the startup of crude oil unit trains to a refinery in Tuscaloosa, the lighter rail on those segments requires additional maintenance to ensure safe movements. The maintenance projects will be completed in phases. Phase One between Tuscaloosa, and Artesia, Miss., took place from the end of October and wrapped up mid-November. Phase Two is scheduled for work north of Artesia to Aberdeen, Miss., through the end of November.
NORFOLK SOUTHERN SCOTT LINDSEY
Triple Crown Services Fallout
Most customers of Norfolk Southern’s
Triple Crown Service (TCS) spent the month of October trying to figure out their options to replace the capacity that they were about to lose. This scramble followed the September 18 announcement by NS that it would significantly downsize its TCS subsidiary no later than the end of November. Once this restructuring is complete, TCS’s new mission will be to focus on the transportation of automotive parts in the Detroit-Kansas City lane. Thus, it will withdraw its unique RoadRailer and TOFC service options from a service network that had expanded over the past three decades from its Fort Wayne, Ind., hub to Jacksonville, Fla.; Atlanta, Ga.; Dallas, Texas; Minneapolis, Minn.; Chicago; Toronto; and the Northeast. Triple Crown generated annual revenues of roughly $350 million, supported by a workforce of 240 employees. By the end of this year, that workforce will be cut by around 200 people. NS will also recognize accelerated depreciation and other costs totaling approximately $65 million in the second half of the year. In addition, TCS will terminate its lease of trailers that had been supporting TOFC services in lanes such Atlanta-Chicago and Chicago-Northeast. The restructuring reflects a decision by
NS to simply not reinvest in the unique RoadRailer equipment fleet with which TCS handled most of its business. While that is an important element of the sto-
ry, the big takeaway is NS has elected to mostly withdraw from the direct re- tailing portion of its intermodal service options. It is no secret that TCS had to carefully find ways to grow its revenue and margins without chipping away at too much of the business handled by NS’s two largest intermodal partners, J.B. Hunt and Hub Group. In its September press release, NS not-
ed that it would work with shippers and logistics partners to convert business handled by TCS into its current contain- er/trailer intermodal network. This was a welcome opportunity for Hunt, Hub, Swift, Alliance, and many other custom- ers, whose domestic boxes ride most of the NS intermodal lanes. However, TCS had managed to develop several lanes for which customers will face various combinations of longer rail routings and longer drayage miles if they want to con- tinue using intermodal. A good example of this is from the Southeast into Canada, where TCS offered direct service via the Detroit gateway in partnership with Canadian National. Competitors using domestic containers must run from the South- east into Chicago, and then use either CN from Chicago to Toronto or NS from Chicago to Buffalo. The latter option in- volves longer drayage and hassles with cross-border truck movements. At press time, it is not yet known if NS will ex- pand its current container options to help fill gaps left from the TCS cuts.
Pocahontas Division Changes
With a number of market factors significantly reducing coal loadings from
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