Edited by the Railfan & Railroad staff
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Norfolk Southern combines divisions
January 12th, 2016
Norfolk Southern is consolidating its Virginia and Pocahontas divisions to form the new Pocahontas Division, with headquarters in Roanoke, Va., effective Feb. 1. The new Pocahontas Division will comprise 2,581 route miles, mainly in Virginia and West Virginia, extending from the Port of Virginia to Portsmouth, Ohio, and from Bristol, Va., to Hagerstown, Md.
In a related move, Norfolk Southern is changing traffic patterns and idling parts of its “West Virginia Secondary,” a 253-mile line between Columbus, Ohio, and central West Virginia that has experienced steady declines in business in recent years. This follows the idling of a 33-mile mainline between Elmore and Princeton, W.Va., in September 2015.
—Norfolk Southern Corp.
CP CEO Hunter Harrison Makes His Case for NS Merger
December 8th, 2015
Undaunted by the door-slamming response by the Norfolk Southern board of directors on December 4, Canadian Pacific CEO Hunter Harrison outlined his strong feelings for the proposed union in a spirited conference call with investors on December 8.
Harrison stressed the importance of adding capacity without adding infrastructure, and sees a combination with NS as the solution. He also called for competitive access to major terminals. President Keith Creel lauded CP's successful turnaround that cut costs and increased shipping velocity.
Investor Bill Ackman of Pershing Square Capital Management slammed NS CEO Jim Squires on his lack of operational experience, despite being part of the railroad's executive legal and finance team since 1992. "The problems at NS are not legal, they’re not finance, and they’re not administration," Ackman said, "They’re operations, and Jim does not really have an operating background."
A revised proposal was submitted that would reduce the cash offer to NS shareholders, but would increase their share in the new combined company from 41 to 47 percent, according to a report in today's Financial Times. Norfolk Southern CEO Squires said the revised terms were “even more uncertain and risky” than the previous proposal.
While NS currently has the worst operating cost-to-revenue ratio of any of the Class I railroads, Squires remained confident his railroad could turn their fortunes around with their own plan, despite a slumping commodities market. A lack of support from shippers and perceived roadblocks from the Surface Transportation Board are also cited as reasons not to pursue serious merger talks with CP.
—Railfan & Railroad
NS Says "No" to Unsolicited CP Offer
December 4th, 2015
Norfolk Southern announce their unanimous rejection of Canadian Pacific's "unsolicited indication of interest" in a press release this morning. "We believe that CP’s short-term, cut-to-the-bone strategy could cause Norfolk Southern to lose substantial revenues from our service-sensitive customer base," said NS president and CEO James Squires. The board of directors summarized their review of the CP offer as undervalued, facing substantial regulatory risk, and overreaching its estimates of cost savings and operational efficiency.
The full text of the press release can be found here.
—Railfan & Railroad
NS reviews unsolicited bid from CP
November 18th, 2015
Norfolk Southern Corp. announced today they will review the unsolicited $28 billion offer made by Canadian Pacific yesterday. A merger between the two railroads would create a combined company worth $47 billion reaching from the Canadian west coast to the eastern Atlantic Seaboard and down to the Gulf of Mexico. The merger plan is being pushed by CP executive H. Hunter Harrison, backed by activist investor William Ackman's hedge fund Pershing Square Capital Management. Reports indicate that Harrison met with NS executive James Squires last week in Florida to discuss the possibility of merger. Squires initial response was cool, citing what he saw as insurmountable regulatory hurdles blocking the way to the creation of a new transcontinental rail shipper. —Railfan & Railroad
Canadian Pacific explores Norfolk Southern takeover
November 9th, 2015
According to a report released on Bloomberg.com, Canadian Pacific has held early stage merger talks with Norfolk Southern Corp. An earlier attempt by CP to take over CSX was abandoned last year. Canadian Pacific CEO Hunter Harrison advocates a consolidation of the rail industry, and integration with Norfolk Southern would create the first transcontinental carrier.
“There is no material news pending at this time,” Canadian Pacific said in a statement, citing a request from the Investment Industry Regulatory Organization of Canada that it respond to the day’s stock trading. “CP does not comment on market rumor and speculation.”
Norfolk Southern operates about 20,000 miles through 22 eastern states, while Canadian Pacific’s network spans southern Canada from Montreal to Vancouver, and turns south to connect Midwestern routes with Chicago.
—Railfan & Railroad via Bloomberg News
Maine Central No. 470 Purchased from City
November 6th, 2015
Courtesy New England Steam Corp.
The New England Steam Corporation formally purchased Maine Central 4-6-2 Pacific No. 470 from the city of Waterville, Maine, in a brief ceremony on November 5. The purchase price of $25,000 was agreed to contingent on NESCo removing the locomotive to an off-site restoration facility. Built by American Locomotive Company in 1924, the No. 470 was retired in 1954. To celebrate the 100th anniversary of the Maine Central Railroad, the locomotive was donated to the city of Waterville, Maine, location of the railroad's largest shop facility. On display in its current location since 1971, weather and vandals have taken their toll. The next phase of fundraising will pay for movement to the Downeast Scenic Railroad in Ellsworth, Maine, where the locomotive will be rebuilt and tested. For more information, please visit http://www.newenglandsteam.org.
—Railfan & Railroad
Norfolk Southern announces cessation of service after December 1
October 21st, 2015
Norfolk Southern released a service alert on October 20 announcing the railroad would no longer accept hazardous shipments after December 1.
"Norfolk Southern Railway Company and its rail operating subsidiaries (“NSR”) will no longer accept shipments of Poisonous-Inhalation-Hazard (“PIH”) commodities, effective Dec. 1, 2015..."
The announcement is a reaction to the federal government's deadline to fully deploy and implement Positive Train Control (PTC) by December 31. The railroads affected have been appealing this deadline and requesting a reasonable extension to comply with the new law.
"These service changes – effective across the entire NS rail network -- are required to comply with federal safety laws that become effective after Dec. 31, 2015, the government’s deadline for installation of PTC. Despite investment of nearly $1 billion to date, NS will not meet the deadline..."
Scheduled passenger service on NS rails will also be affected. "NS has notified in writing Amtrak, Virginia Railway Express and Metra that passenger trains will not be permitted to operate on NS track after December 31, 2015..."
At press time, neither Congress nor the FRA have given any indication that an extension to the PTC deadline will be granted.
Read the full service notice here: http://www.nscorp.com/content/nscorp/en/service-alerts/notice-of-cessationofserviceeffectivedecember12015forallshipment.html
—Railfan & Railroad via NS Corp.
CSX plans cuts at Corbin
October 20th, 2015
According to local sources, CSX is planning to close the terminal at Corbin, Ky., in response to a declining domestic coal market. This development comes on the heels of last week's sudden closure of the Erwin, Tenn., terminal, located in former Clinchfield coal country.
—Railfan & Railroad
CSX shutters former Clinchfield route in wake of slumping coal market
October 16th, 2015
On October 15, CSX Transportation announced the closure of its terminal in Erwin, Tenn., and the former Clinchfield route due to a reduction in domestic coal exports. It is estimatde that 300 jobs were lost as operations were wrapped up by the end of the week. Some of the employees may be furloughed to other positions in the company.
—Railfan & Railroad
Amtrak Vermonter strikes rockslide, derails, no life-threatening injuries
October 5th, 2015
Amtrak Train 55, the southbound Vermonter traveling from St. Albans, Vt., to Washington, D.C., struck a rockslide betweeen Northfield and Roxbury, Vt., this morning. According to local news reports from WCAX-TV, the derailment occurred near Route 12A and Bull Run Road. The train had just made its station stop in Montpelier and was headed for Randolph when the train struck a landslide and all five cars left the tracks. Emergency crews have responded, with some injured transported by ATV because of the isolated location. Details are still developing at this time.