POSE / SEPO (Portland - Selkirk trains)

[jaymac]

Keeping investors happy means keeping expenses low. However twisted it might be, quarterly reports rule, meaning that tactics are generally more important than strategy.

[gokeefe]

Given how frank -- even proud -- CSX seems about its retrenchments, it would seem expectable that NS might scale back its competition-based investments, including for PAS.

Or sensing an opening, increasing their PAS etc investments to finally have a distinct advantage over CSX. Or do the decaying CSX connections make this moot?

I think NS is seeing a major opening that they never expected.

[johnpbarlow]

Keeping investors happy means keeping expenses low. However twisted it might be, quarterly reports rule, meaning that tactics are generally more important than strategy.

OTOH, NS invested $140M in PAS 9 years ago in 2008 (track, Auto/intermodal terminals), and then invested $217M in acquiring the D&H from CP two years ago. NS is spending quite a few $$ upgrading the D&H track to NS main line standards from Sunbury to Mechanicville. And the Portage Trestle replacement project is due to come on-line on the Southern Tier within a year, costing NS another $55M. And 1-2 years back NS spent $160M doubling the size of Bellevue Yard. Then there are DC to AC locomotive rebuilds going on at Roanoke and Juniata.

NS has demonstrated it has a long term strategic view by investing much money in its capital assets to maintain and develop its traffic base.

I agree that NS might see an investment opportunity in New England, as well as elsewhere in the eastern US, with the ongoing CSX brain freeze. If nothing else, by switching SEPO/POSE to run via E Deerfield / RJ instead of PAR's Worcester Branch, PAS (& NS) would see more revenue. PAR could mothball 30 miles of decrepit track, Hill Yard ops might become less congested and more fluid, and maybe more $ would be plowed into District 3 maintenance.

[gokeefe]

Pan Am would never give up on it's interchange with CSX. It's a key part of their leverage with NS.

[johnpbarlow]

Here's marginally relevant commentary from NS' Q2 earnings con call yesterday morning:

Jason Seidl - Cowen and Company, LLC

All right. I guess, my follow-up is going to be more on the top line side. We did, as you know, our big Railroad Shipper survey,. And your eastern competitor probably got the worst ratings and service. And we just held dinner last night with some railroad people, and clearly, they're having some service challenges over there. Have you seen freight come over from the other eastern railroads due to poorer-than-expected service, where it can come over? And if it's come over, has it come over at regular pricing, or have you been able to actually increase the pricing on that?

James A. Squires - Norfolk Southern Corp.

Look, Jason, again, let me just set the stage here, and I'm going to let Alan comment specifically on what's going on with the top line in that regard. But first off, our focus is very much on enhancing value at NSC and driving our plan to continue to drive productivity and growth. And growth is an important part of that plan. We'll take the market share, whether it's from truck or competitors, as long as it complements our network and obviously falls to the bottom line. Those are the keys.

So, Alan, what are you seeing in terms of the landscape?

Alan H. Shaw - Norfolk Southern Corp.

Jason, we are always talking to our customers. As Jim noted, our primary form of competition is truck. But we're talking to our customers about service products that offer a sustainable view of their markets and allow them to grow. And we have seen some business move over to us. It's a small amount, I'll tell you that, but it's early. We've got a really good service product. The customers value the continuity of our market approach, of our operating philosophy, and our focus on allowing them to grow with their customers.

...

Alan H. Shaw - Norfolk Southern Corp.

So, we're going to capitalize on opportunities that fit our network. And if customers see that we provide a predictable, efficient service product that meets their needs, whether that's in competition with truck or another rail carrier, then we're going to go after that business, Jim, as long as it fits our network and we can drive value to our shareholders.

Thomas Wadewitz - UBS Securities LLC

Okay. But when you said, it's early, does that imply that there might be some building in the opportunity, or am I over-reading that comment?

Alan H. Shaw - Norfolk Southern Corp.

I'll tell you that the average duration of our contract is three years, and so, it takes time for some things to play out.

[gokeefe]

Wow .... interesting to see NS picking off some business.

[johnpbarlow]

STB tells CSX to straighten up and fly right:

https://seekingalpha.com/amp/news/32827 ... congestion

[gokeefe]

Perhaps the most telling paragraph:

Arch Coal (NYSE:ARCH) said during today's earnings conference call that CSX service problems have started to affect coal shipments to the coast bound for export.

That has got to be a serious problem for a major customer to be saying this ... And now it's out in the open and the regulator has noticed ...

[flyingfox10]

Yea, that stopped months ago.

[fromway]

CSX dropped asphalt tanks on the ground in Pennsylvania this morning causing a fire and evacuation. CSX was not sure if the fire was from the asphalt or other materials. The train was going from Chicago to Selkirk. CSX will have some explaining to due about this mishap.

[Dick H]

Some details on the Hyndman PA Derailment today (8/2) from WJAC-TV

http://wjactv.com/news/local/csx-32-rai ... derailment" onclick="window.open(this.href);return false;

[newpylong]

"The train involved was traveling from Chicago to Selkirk, N.Y., and consisted of five locomotives and 178 rail cars total. Of those, 128 cars were carrying mixed freight, "


178 cars - another EHH masterpiece.

[rr503]

Also do note that it was going from Chicago to Selkirk......via Cumberland. Maybe he's trying to move freight off the Chicago line to justify his single-tracking?

[johnpbarlow]

Also do note that it was going from Chicago to Selkirk......via Cumberland. Maybe he's trying to move freight off the Chicago line to justify his single-tracking?

If CSX routed this Chicago-Selkirk train via Atlanta/Waycross/Rocky Mount it could be perhaps 400 cars long!

[J.D. Lang]

Also do note that it was going from Chicago to Selkirk......via Cumberland. Maybe he's trying to move freight off the Chicago line to justify his single-tracking?

If CSX routed this Chicago-Selkirk train via Atlanta/Waycross/Rocky Mount it could be perhaps 400 cars long!

Yeah 178 car train over Sand Patch with no helpers going from Chicago to Selkirk. That ought to improve car movement metrics for CSX.
J.L.