KCS releases annual ‘state of the railroad’ report
Written by Carolina Worrell, Senior Editor, Railway Age
In its 2015 state of the railroad report, released to employees on Jan. 4, 2015, Kansas City Southern (KCS) said the company will see many of the same challenges in 2016 that it faced in 2015, creating a "cautious" outlook for the year ahead.
“We expect continued volatility in oil and natural gas pricing, which means our energy business, just like our peers’ businesses, will again be difficult to predict,” said KCS CEO David L. Starling and President Patrick J. Ottensmeyer. ” The strong U.S. dollar will make American exports more expensive and less attractive to other global producers, which may impact many of the products we move, such as steel and paper. Beyond these key indicators, there are various other factors that signal softness in the global industrial economy, but we must focus on making the best of market dynamics at hand.”
“For these reasons, among others, we are cautious about our outlook for 2016. Despite these challenges, we will proceed with many of the planned strategic capital expenditures that will drive our longer-term growth in areas such as plastics, automotive and intermodal. However, we will need to be extremely thoughtful about the cost side of our business and must ensure we are using our financial and human resources assets wisely. As such, we will remain flexible and respond quickly to evolving circumstances in order to protect our profitability in the short term.”
Starling and Ottensmeyer added, however, that the company demonstrated resilience in 2015 in every aspect of its operations, finances and marketing, and is “well positioned for future growth.”
“That said, we operate in an industry that must consider both the long and short term timeframes and we can say with confidence that our long term future is bright. Just as in the past, we will get through this period of economic uncertainty and will make the appropriate strategic capital investments that will facilitate industry-leading growth when macro-economic dynamics shift in our favor. For the foreseeable future, however, we will need to continue to be nimble and resilient. KCS demonstrated its resiliency in 2015 and we should all be proud of our meaningful accomplishments. We will operate with this hallmark mentality through 2016 and we should be excited by the future prospects for our great company.”
This state of the railroad report provides an overview of KCS’ primary accomplishments in 2015 and the progress planned for 2016. Highlights include:
• Installation of 40,000 ties and 20 track-miles of rail between Beaumont, Texas and Dequincy, La., completing a three-year program for track upgrades over this rail segment.
• Installation of 132,000 ties on the line from Kansas City, Mo. to East St. Louis, Ill.
• Installation of 76,000 ties and five track-miles of rail in the areas of Artesia, Columbus and Aberdeen, Miss.
• Continued annual tie cycle programs on the Pittsburg subdivision from Kansas City, Mo. to Pittsburg, Kan.; Laredo subdivision from Laredo to Corpus Christi, Tex.; and New Orleans subdivision from Baton Rouge to New Orleans, La.
• Replaced 38 miles of curved rail and other priority rail areas across the system.
Additionally, this past July, KCS opened a new, state-of-the-art intermodal terminal in Wylie, Tex., providing an annual lift capacity of 342,000 containers, 1,500 parking spaces, and 400 container stack spots.
For the full breakdown of KCS’s 2015 accomplishments in both its U.S. and Mexican operations, by division, click HERE.
