22 Oktober 2014

[221014.EN.LOG] Big American Rail Mergers Risk Service Disruptions, Says CSX Chief

US RAIL disruptions and congestion rather than intended improvements can be expected if further consolidation of major US railroads occurs, says CSX Corp CEO Michael Ward.

"We might actually see a step back in service," Mr Ward told analysts in a conference call commenting on third quarter profits that beat analysts' expectations.

Mr Ward referred to the last round of US rail mergers in the 1990s, which were accompanied by system-wide service collapses.

He was commenting on a Wall Street Journal report that Canadian Pacific Railway had offered to buy the No 3 American CSX railway. Both companies declined to comment on the report, but later CP announced that merger talks had ended.

Mr Ward told Reuters he expected push back from customers about freight price increases next year, and said new reporting requirements may take time to implement.

The STB ruled that starting this week (October 22) major railways must report weekly train speeds, dwell times and other service metrics.

Mr Ward said CSX will comply, but added that railways have different definitions for the metrics the STB wants. "Getting everyone to agree on one definition will take time," he said.

Source : HKSG.

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