Wednesday, April 15, 2015

Rail Freight and Road Haulage and Contract Logistics Show Different Trends

Two Sets of Figures from US Groups Make Interesting Contrast
Shipping News Feature

US – Two sets of first quarter figures from prominent US based freight carriers this week demonstrate different trends. CSX, which operates intermodal services, spreads traffic mostly across rail and road haulage sectors, utilising containers and bulk cargo through its contract logistics offerings. By contrast Genesee & Wyoming (G&W) is a short haul, railway operator with a traffic spread across North America, Australia and Europe.

CSX has produced financial figures whilst G&W released tonnage details, which however generally lend themselves to interpretation as a fairly accurate representation of revenue trends. CSX has seen first-quarter 2015 net earnings of $442 million, an 11% jump against the $398 million in the same period last year. The company also generated earnings per share of $0.45, a 13% hike from $0.40 per share in the first quarter of 2014.

Revenue in the quarter was $3 billion, driven by growth across many of CSX's varied markets and an improved pricing environment, partially offset by the impact of low natural gas prices, lower fuel recoveries and the strong US dollar. At the same time, the benefit of lower fuel prices and cost-saving initiatives more than offset higher inflation and volume-related costs in the quarter. As a result, operating income increased by 14% to $843 million and the operating ratio improved 330 basis points to 72.2%. Michael J. Ward, CSX Chairman and Chief Executive Officer said:

"In this dynamic economic and business environment, CSX's core earnings remain strong and we are continuing our drive to provide excellent service for our customers and value for our shareholders. Our commitment and confidence in CSX's future is underscored by the positive shareholder actions we're taking today."

At G&W traffic in March 2015 was 164,261 carloads, a decrease of 3,732 carloads, or 2.2%, compared with March 2014. G&W’s same-railroad traffic in March 2015 was 155,096 carloads, a decrease of 12,897 carloads, or 7.7%, compared with March 2014. G&W of course completed its acquisition of Freightliner last month and no figures for this company were included.

G&W’s traffic in the first quarter of 2015 was 476,737 carloads, an increase of 9,358 carloads, or 2%, compared with the first quarter of 2014. G&W’s same-railroad traffic in the first quarter of 2015 was 452,168 carloads, a decrease of 15,211 carloads, or 3.3%, compared with the first quarter of 2014. A full breakdown of the G&W figures by commodity and region is available here.