Kansas City Southern responds to STB's service concerns

Kansas City Southern President and Chief Executive Officer Patrick Ottensmeyer has responded to the Surface Transportation Board's (STB) request for information about Class Is' service outlooks for 2018.

In his April 5 letter to the STB, Ottensmeyer said KCS Railway Co. (KCSR) is "adequately staffed and adequately equipped to meet expected service demand in 2018, and service demand is generally in line with our internal forecasts."

However, KCSR has experienced slowdowns in the Beaumont-Laredo portion of its network since November 2017, Ottensmeyer noted.

"While we have taken and continue to take steps to counteract those slowdowns to the extent we can, as the Board knows, the rail system is heavily interconnected," Ottensmeyer noted. "Accordingly, our success in overcoming slowdowns depends on not only our efforts but also the efforts of our connecting and host carriers to overcome issues on their networks or to find rerouting opportunities."

KCS is the final of the seven U.S. and Canadian Class Is to respond to the STB's request for information about their service plans in response to shippers' complaints about deteriorating rail service.

Specifically, the board heard from the National Grain and Feed Association (NGFA) and the Alliance of Automobile Manufacturers, which both "voiced similar serious concerns about the reliability of the nation's freight network," the STB said in its letter to Class I executives.

The STB asked the railroads to report back on their locomotive availability; employee resources, including current train and engine employee headcount and managerial resources; local service performance, including locations where performance is trending below norms; this year's service demand; communication with shippers; and capacity constraints.

In addressing the STB's specific request for information, Ottensmeyer said:
• KCS has a combined fleet of 1,072 locomotives in the United States and Mexico, with 65 in storage. The active fleet is up 3 percent over first-quarter 2017 and includes short-term lease units. "KCSR believes that its fleet of available locomotives is adequate to meet current demand," he said.
• KCSR does not anticipate any employee furloughs and is in a "normal hiring cycle."
• KCSR's actual carloads for Q1 2018 are tracking "slightly below" projections. "Carloads in the agriculture and mineral and automotive business units have been negatively impacted by congestion in south Texas and problems in the supply of automotive equipment," he said.
• The Class I uses multiple ways to keep customers informed of their shipments.
• KCSR has worked with UP to increase capacity in UP's Brownsville subdivision, where KCSR has trackage rights. KCSR also has completed projects to increase capacity in Texas.

All the Class I executives' responses are available on the STB's website.