CP, CSX, UP respond to STB's rail-service concerns

Canadian Pacific, CSX Corp. and Union Pacific Railroad last week responded to the Surface Transportation Board's (STB) request for Class Is to provide the board with their 2018 service plans in response to shippers' complaints about deteriorating freight-rail service.

In his report to the board, CP President and Chief Executive Officer Keith Creel said the railroad's network has recovered from winter weather challenges in the upper Midwest and Canada that affected car velocity and locomotive cycles to such an extent that March volumes will be CP's highest since March 2015 as measured by revenue ton miles.

"Overall, volumes to date have been in line with our initial forecast. We have seen stronger volumes than we expected in several areas, in particular potash, frac sand, fertilizer and intermodal. We have also seen an increase in demand for Canadian crude oil by rail given the development of pipeline constraints which have driven price spreads in favor of rail," wrote Creel.

"Service challenges on a Canadian competitor have contributed to an unexpected shift of business to CP as well," he added. "These factors together with demand in other business lines lead us to believe that the strong demand seen in Q1 2018 will likely continue throughout the year. ... We are well positioned to serve that demand."

Creel also described specifics for how CP is addressing other service-related factors. To read his letter, click on this link.

In his letter to STB officials, CSX President and CEO James Foote noted that the Class I has delivered six months of service improvements based on key metrics since  initial implementation of its "scheduled railroad model" of operations.

"Our recent performance is above 2017 averages and we've achieved record levels for velocity, car order fulfillment and dwell," wrote Foote. "Our scheduled railroad model provides substantial opportunities to further optimize the network by yielding faster transit times, better service and increased asset utilization."

For more specifics about CSX's plan, click here to read Foote's letter.

In his response to STB members, UP Chairman, President and CEO Lance Fritz said that UP is deploying more resources, as well as developing and implementing operating strategies aimed at improving service.

"We are particularly focused on reducing rail-car inventory on our network," Fritz wrote. "Elevated rail-car inventory creates additional congestion at yards, terminals and sidings, which reduces velocity and increases human and locomotive resource consumption."

Moreover, UP is modifying existing service plans as necessary to reduce inventory and improve fluidity, he wrote.

"We are also intensifying communications and evaluating opportunities to bypass congested interchange locations with our Class I interchange partners to ensure we are spotting and pulling cars in a timely manner," Fritz's letter stated. "We are also adding jobs to support yard and terminal fluidity. At the network level, we are focused on train-plan discipline. Running trains as scheduled helps ensure locomotive and crew balance, which allows us to more efficiently use available resources."

For more details on UP's service response plan as described in Fritz's letter, click on this link.

Last month, the STB also received responses from CN and BNSF Railway Co.