Rail service slowing down

North American railroads showed continued performance decline on two critical measures of service quality last month. Average network speed for North American rail carriers declined 7.5% during the week of May 9, while terminal dwell times increased 11.7%.

Even Kansas City Southern (KCS), which has shown consistent strong performance on train speed, suffered a slight decline in train speeds (down 0.4%) during the week. However, year to date, KCS has shown a net improvement of 9.8% in system-wide train speeds.

The worst performance for the week was a 10.5% decline in train speeds at Union Pacific. Its overall 12.1% decline in train speed year to date is also the worst among the seven major North American railroads. Average train speed on the UP system was 21.5 miles per hour.

A 9% decline in train speed at CSX for the week put system train speed at 19.2 miles per hour, the slowest CSX has reported in three years. Terminal dwell times also rose 26.7% during the period. Supporting the argument that one week doesn't constitute a trend, equity research firm Morgan Stanley indicates CSX is off only 3.7% in train speed year to date.