UTU News Digest - Thursday, July 1, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Thursday, July 1, 1999

WASHINGTON: NS, CSXT show no improvement in clearing up delays

WASHINGTON -- Delay-plagued rail operations on Norfolk Southern Corp. and CSX Transportation Inc. tracks showed no broad signs of improvement in the recent congestion and subpar operations that have characterized the Eastern rail system, the Journal of Commerce reported today.

The latest carrier performance data, which became available Wednesday afternoon, did seem to suggest that the recent pattern of slow trains, sluggish yard operations a bulging supply of freight cars was not deteriorating as it has been over the past weeks since NS and CSX took over Conrail Inc. tracks.

In a related move, the Surface Transportation Board approved a trackage rights swap that will give CSX new abilities to run trains in the Detroit area, site of substantial recent delays, over tracks owned by Canadian National Railway Co.

At the same time, CSX gave CN new rights to use tracks in the Buffalo area, which CN had been seeking as a way to improve its access to U.S. markets.

The performance data showed NS was still struggling at rail yards where freight car sorting time continued to increase at nine of 14 key facilities. However, NS was able to speed up terminal operations at Pittsburgh and Elkhart, Ind., two terminals where it had been taking more than two days to move cars between trains. Under Conrail operation, typical car switching took roughly 24 hours.

NS achieved an improvement in overall average train speed to 17.6 miles an hour, but that figure still was 15% worse than early June.

NS also achieved a 1% reduction in its on-line freight car inventory, a statistic that is watched as an indicator of increasing congestion as the car count climbs. However, the 246,000 cars on its tracks last week were still 11% more than early June.

CSX's average daily car count crept up by 1,400 cars, less than 1%. Typical carrier car inventories on other railroads vary by 1% or 2% in the course of normal operations.

"We are doing better," said CSX assistant vice president Bob Haulter. "There is a lag time between the reports (which cover last week) and today (Wednesday). The numbers are basically flat from the week before. It's not what the customer expects, but it is better. We are seeing the trend we thought we could see in this interim time frame."

Operations improved at Indianapolis, Haulter said, and are stabilizing at Selkirk, N.Y., a previous trouble spot.

CSX's average train speed slowed to 18.2 miles an hour, a change of less than 2%. Early in June, that figure was 19.2 miles an hour.

CSX also reported slower handling of freight cars at a majority of its 14 key terminals. Among those that showed improvement were Buffalo, N.Y.

However, car-handling operations at terminals such as Willard, Ohio, Cincinnati and Chicago were slower than the week before.

A more detailed picture of operations at both railroads should emerge next week because the STB late Tuesday ordered both railroads to report more operational data on a weekly basis.

STB said in a statement that the additional reporting reflects concerns regarding system fluidity and slowed service on former Conrail lines.

The additional data, which must be reported beginning on July 7, includes data on blocked sidings and mainlines, equipment interchange and information on the amount of, and reasons for, train delays.

WASHINGTON: But CSX, NS claim they are making progress

WASHINGTON -- CSX Corp. and Norfolk Southern Corp. railways told Reuters Wednesday they continued to make progress in whittling away congestion experienced since they split the Conrail network.

Both railroads said they were experiencing fewer delays and were getting on top of computer problems that created snags when they split Conrail June 1 under a $10.3 billion joint purchase first announced over two years ago.

But a top shipper group said it was too early for its members to see an improvement.

"It's like a train moves - the front starts before the back moves," said National Industrial Transportation League President Ed Emmett in a telephone interview, citing continued problems with delays and misdirected cars.

The Conrail split created two major north-south railroad networks east of the Mississippi River. The railroads are anxious not to repeat Union Pacific Corp.'s <UNP.N> 1997 rail chaos that could invite unwelcome changes in federal regulation.

The Surface Transportation Board on Tuesday requested additional information from CSX and Norfolk Southern starting July 7 on blocked lines and the cause of train delays.

The railroads said further improvements would be achieved over the next few weeks as car industry shipments slowed for auto plant retoolings and coal miners took vacations.

"We knew that we had this first two weeks of July as a time ...of lesser volume to do some catch-up work," said Bob Hault, an assistant vice president overseeing the integration of Conrail for CSX.

Norfolk Southern spokeswoman Susan Terpay said the railroad was adding 92 locomotives to run special short trains around bottlenecks.

Extra crews were being found by offering temporary work to former employees and using furloughed Union Pacific engineers and conductors, Terpay said.

Emmett said the next few weeks would be critical. "If there is not substantial improvement by the middle of July then shippers are really going to be worried."

WASHINGTON: CN, IC see no service disruption

WASHINGTON -- Canadian National Railway Co. and Illinois Central Railroad, trying to stay straight on a path where others have stumbled, today will begin to knit together a North American rail system designed to capitalize on rapidly growing north-south trade, The Journal of Commerce reported today.

The Canadian National-Illinois Central pathway, with an associated marketing agreement to reach Mexico, parallels a commercial marketplace in which trade virtually has doubled in five years since the passage of the North American Free Trade Agreement.

But their $2.4 billion deal, which will create the first major international rail system, has been overshadowed by extensive U.S. rail problems.

When Canadian National and Illinois Central first proposed a network stretching from both Canadian coasts to central Mexico in February 1998, Union Pacific Railroad was in the throes of service problems that cost the railroad and its shippers billions of dollars.

Today, when the Canadian National-Illinois Central merger integration actually begins, a $10 billion corporate breakup of Conrail Inc. by Norfolk Southern Corp. and CSX Corp. that was supposed to be trouble-free instead resembles a corporate breakdown. Shippers are irate about a wave of extensive delays, computer problems and operational mix-ups.

But executives at Canadian National and Illinois Central insist that the other railroads' merger-related difficulties won't be repeated.

"We don't anticipate any of the kind of problems that have been created in past mergers," E. Hunter Harrison, CN's chief operating officer, said in an interview. "Our view was that nothing we are seeing today is a new kind of problem or an issue that just came up. Our integration plan, in our view, is a pretty cautious approach. Very little integration is required. M (merger) day plus one isn't going to be much different from M-day minus one.

"The biggest thing we are concerned about is service," Harrison said. "We are sensitive to that in everything we have done. The merger will have nothing but a positive impact on service."

Ed Emmett, president of the National Industrial Transportation League, said members of his organization have demonstrated little concern about the merger.

"I have not heard a word from members in weeks about the CN-IC deal," he said. "If there is any concern it hasn't been brought to our attention. That's probably because they (NITL members) are overwhelmed by the Conrail situation."

Harrison described steps meant to avoid others' difficulties with computer systems and operational changes such as train dispatching and crew management.

"We're not doing anything day one with information systems," he said.

Indeed, CN has said its systems integration won't be completed until July 2000. In addition, several original objectives to consolidate operational activities are on hold.

For example, the merged railroad was supposed to change operations in the Chicago area so that train crews from Canadian National and Illinois Central could work over the other railroad for 150 miles or so.

That proposal is a subject of negotiations with the Brotherhood of Locomotive Engineers and the United Transportation Union, which represent train crews on both railroads.

Any revisions to current operations would have to be spelled out in new agreements to implement merger-related changes.

"We have some things to clarify," Harrison said, without being specific. "There is a provision for arbitration (in the negotiating process), but I don't think it will be necessary. I feel reasonably comfortable that before the year is out we will have implementing agreements."

Also on hold is consolidation of train dispatching and crew management of Canadian National's U.S. operations at an Illinois Central facility in the Chicago area.

"That is an issue that is being reviewed," Harrison said. "I'm not sure that is going to take place. It's involved with implementing agreements with TCU (Transportation Communications Union) and ATDA (American Train Dispatchers Association). It looks like we might not have to make the moves to achieve some of efficiencies we seek."

One of the few immediate changes is centralized coordination of network operations, as well as locomotive and rail car distribution activities.

Those steps are tied to a new organizational structure that has five operating divisions supervised from a network operations center in Edmonton, Alberta.

The new approach stresses decentralized decision-making and more localized sales initiatives to reach potential customers.

Asked if CN was concerned about potential problems from creating a new operating structure as integration begins, Harrison said, "It is something we will watch closely. We are sensitive to the changes we are trying to make. Is there a concern it won't be effective? Absolutely not. The first objective was keeping the integrity of the network. That is our strength and that is important to customers. There is no way local involvement will hurt integrity of the network."

FLORIDA: Two Amtrak trains graze each other

JACKSONVILLE -- Two Amtrak trains grazed each other early today, injuring at least five people.

"We're still not sure what happened,'' said Fire Chief Ray Alfred. ``We don't know what caused it.''

The accident caused the engine car and a baggage car to tip over.

The injured were taken to St. Vincent's Medical Center in Jacksonville, said hospital spokeswoman Kim Welch.

"We expect all of them to be treated and released today,'' she said.

The trains were heading in opposite directions on the Miami-to-New York City route and were carrying a total of about 300 people, said Amtrak spokesman John Wolf. Amtrak transported the remaining passengers on buses to the nearest train station.

WASHINGTON: INS' role in "Railroad Killer Case" probed

WASHINGTON -- The Justice Department's top watchdog will investigate why the Immigration and Naturalization Service detained a Mexican national wanted for questioning in connection with several murders but let him go, the INS said Wednesday.

INS Commissioner Doris Meissner said the agency's failure to identify Rafael Resendez-Ramirez, a 39-year-old drifter charged in two murders and linked to six other slayings, "has raised serious questions about the INS' knowledge of the case and procedures used in encounters with'' him.

"As a result of these questions, I have referred the matter to the Justice Department's Office of the Inspector General,'' said Meissner in a statement.

She also said the INS' office of internal audits was reviewing INS procedures "in an effort to avoid any similar situation in the future.''

The inspector general's office investigates waste, fraud and abuse.

The INS arrested Resendez-Ramirez in the El Paso area during the week of June 1 for being in this country illegally and deported him to Mexico later that day, the FBI said.

Two days after his June 2 release, authorities believe he killed a 73-year-old woman west of Houston. The following day, they believe he killed a 26-year-old Houston schoolteacher at her home. His fingerprints then were found June 15 in Gorham, Ill., at the scene of the murder of an 80-year-old man and his 52-year-old daughter.

INS officials said that when Resendez-Ramirez was in the custody of the Border Patrol on June 1, they didn't have any information on his criminal records or of any outstanding warrants.

But Meissner said the INS had multiple entries on Resendez-Ramirez in a photo and fingerprint database that provides immediate identification of aliens apprehended by Border Patrol. The system became widely available in 1997 and 1998. Prior to that INS relied on a text database of names.

INS first encountered Resendez-Ramirez in 1976 after he was arrested in Michigan. He was returned to Mexico, but since that time has been deported from the U.S. on three occasions in 1985, 1987 and 1991. He was also apprehended by Border Patrol agents eight times between January 1998 and the present.

Meissner said the Justice Department will look at why Resendez-Ramirez "was not detained and whether INS knew about Resendez-Ramirez criminal activities after being contacted by local law enforcement earlier this year.''

CANADA: Canadian Pacific Railway temporary halts Prairie Network rationalization

CALGARY -- Canadian Pacific Railway (CPR) confirmed today it will temporarily forego all uninitiated branchline discontinuance efforts on the Prairies until the end of September, when a government-industry group has completed work as part of a federal program to reform the grain handling and transportation system.

As a member of the grain reform group, led by Arthur Kroeger, CPR believes it is in the best interests of all stakeholders to focus on our efforts to improve the grain handling and transportation system, said Rick Sallee, vice-president of agri-products, coal and resource products at CPR.

"This is a significant transition period on the Prairies, when co-operation and a strong focus on Mr. Kroeger's mandate is required. As a result, we will temporarily forego new discontinuance procedures.''

An exception to this plan could occur if a money-losing line previously scheduled to be advertised for sale under the federal discontinuance process were facing significant capital expenditures in the short term. In such a case, the discontinuance process would be initiated.

CPR will continue with certain initiatives already under way, including the sale today of the 115-km (71.5-mile) branchline between Pangman and Assiniboia, Sask. Discussions toward the sale began a year ago.

CPR also will proceed with track salvage work already under way, or scheduled to begin, on three other branchlines: the Bromhead and Wood Mountain Subdivisions in Saskatchewan and the Lyleton Subdivision in Manitoba. Service on those low-volume lines had been previously discontinued, following unsuccessful efforts to find private- or public-sector buyers.

Operations on the Lyleton Subdivision, a 29-km (18-mile) line in southern Manitoba, were discontinued in July, 1996 as part of the enactment of the Canada Transportation Act of 1996. The federal government in 1995 had recommended fast-track rationalization of the Lyleton Subdivision and 17 other Prairie lines, determining that those lines undermined the efficiency of the branchline system.

Operations on the Bromhead Subdivision, a 71-km (44-mile) line between Southall and Minton, were discontinued August, 1998.

Operations on the Wood Mountain Subdivision, a 104-km (65-mile) line between Ogle and Mankota, were discontinued in January, 1999, a year after the line was first advertised for sale.

Since the Canada Transportation Act of 1996, CPR has discontinued service on about 1,700 km (1,056 miles) of lines in Canada, and has transferred 4,946 km (3,074 miles) of track to shortline operators.

CANADA: CP Rail sells Sask. branch line to Red Coat

CALGARY --Canadian Pacific Railway said it and Red Coat Road & Rail Ltd. have concluded an agreement pursuant to which CP Railway will sell a 71.5-mile branchline between Pangman and Assiniboia in southwestern Saskatchewan to Red Coat.

Terms weren't disclosed.

In a news release, CP Railway said Red Coat, an organization representing communities along the branchline, assumes ownership of the former CPR Assiniboia Subdivision. The agreement covers the sale of land and track, but no equipment or other assets. The new Red Coat line will be operated and maintained under contract by Southern Rails Cooperative Ltd., a Saskatchewan company with previous shortline railway operating experience.

As part of the operating service agreement between the two parties, CP Railway said it will provide connecting rail service to Red Coat, delivering empty grain cars and picking up loaded cars at an interchange point just east of Assiniboia.

ENGLAND: Railtrack blasted on spending...again

LONDON -- Railtrack Plc fielded another barrage of criticism on Wednesday when Britain's rail authority chief said the rail operator's investment plans just didn't cut it.

Alastair Morton, chairman of the shadow Strategic Rail Authority, said Railtrack's plans to increase investment by 10 to 11 billion pounds ($15.9-17.3 billion) to 27.1 billion pounds over the next decade was too little to help revamp the nation's battered rail system.

"A billion a year is not going to do the business,'' he told a transport conference.

He said Railtrack needed to invest more, to cut its own costs and ``through good program design and delivery, the costs of the service it is required to perform.''

Railtrack's response was that it would work with the SRA team to take the industry forward. "Everyone is impatient for improvement. We have to deliver,'' a spokesman said.

The company's shares were unfazed by Morton's remarks, trading 21 pence up at 12.90 pounds by 1305 GMT.

Morton is the third rail chief in the last several weeks to criticize Railtrack's track record and future spending plans -- which have also come under fire by consumer groups.

Earlier this month, the outgoing chief of Britain's rail watchdog, Chris Bolt, demanded that the rail infrastructure giant meet its own timing improvement target or face action.

In May, Bolt's successor Tom Winsor warned Railtrack, privatized in 1996, that it would have to justify its healthy profits by translating them into better performance.

The warnings come on the heels of a harsh report in April by a cross-parliamentary committee which branded Railtrack's spending performance as a failure and scorned the new spending plans.

Morton picked up on his colleagues' theme.

"Railtrack makes its profits from a monopoly license carrying an obligation to provide track access. Shareholders bought the right to enjoy the fruits of that license on the basis that Railtrack must earn its profits by fulfilling its conditions,'' he said.

Railtrack was accused of putting shareholders ahead of investment when it announced record annual pre-tax profits of 428 million pounds last month. But it insists that the profits of today are the investments of tomorrow and says its new spending program is picking up speed.

Morton said his priorities as head of SRA -- a watchdog handling talks to extend franchises for the best train firms and signal the end of the line for the worst -- was getting more investment by Railtrack and extending franchises with operators "determined to flourish without subsidies, or with very limited subsidies.''

FRANCE: New high-speed rail line proposed

PARIS -- France has proposed to build a new high-speed railway between the Mediterranean city of Marseille and the western German City of Mannheim.

The French delegate minister in charge of European affairs Pierre Moscovici said that the project, called "TGV-Rhine-Rhone", should be among the projects to be implemented with priority by the European Union (EU).

He told the French Parliament Tuesday evening that such a railway will help strengthen the railway transportation links of all European countries. France is also planning to build high speed railways between Paris and Strasbourg, eastern France, and that between Lyon and the Italian city of Turin, plus a west-east high speed railway in the southern part of the country.

But all these railway projects are expected to meet with financial difficulties because of lack of interests by private investors. France's railway industry is 100 percent owned by the state railway company SNCF.