Clayton County’s proposed transit partner reports record profits
By David Pendered
The railroad that owns the corridor where the proposed commuter rail line would be built in Clayton County has just posted record profits for the second quarter of 2014.
Norfolk Southern’s financial situation warrants attention as Clayton County voters prepare to vote in November on a proposed 1 percent transit sales tax. Likewise with some of its corporate decisions, such as one last week to sue the state of Maryland to block the public release of information about shipments of crude oil.
The future of commuter rail in Clayton County depends largely on whether Norfolk Southern agrees to share its existing freight corridor, presuming voters approve the proposed 1 percent sales tax.
Norfolk Southern reported net profits of $562 million for the second quarter. Those earnings are 21 percent higher compared to the same period in 2013. Earnings were up across all the commodity groups the railroad handles, according to the company’s July 23 filing with the federal Securities and Exchange Commission.
Analysts had expected the nation’s railroads to report an increase in profits compared to the year’s first quarter, when inclement weather slowed shipments and increased costs. Other railroads reported income growth in the second quarter, including CSX Corp. at 1.5 percent and Union Pacific at 17 percent, according to wsj.com.
Significantly for Norfolk Southern, the company has reduced its operating costs. The company reported that 66.5 percent of its operating revenues was consumed by operating expenses in the second quarter. That compares to 70.2 percent for the second quarter of 2013,
“Norfolk Southern delivered excellent financial performance during the second quarter, reporting the highest railway operating revenues in its history,” CEO Wick Moorman said in a statement.
“We see continued strength across most of our business segments and are optimistic that overall economic conditions will drive growth,” Moorman said. “Our focus remains unchanged. We are committed to running the safest railroad, providing superior service, increasing efficiency, and driving superior returns to our shareholders.”
Miamiherald.com reported July 24 that Norfolk Southern had filed a lawsuit to prevent Maryland from releasing information about crude oil shipments.
The U.S. Department of Transportation began requiring the information after a series of serious train accidents resulted in spills and fires. The information is intended mainly to provide emergency responders with a better idea of what they face when responding to derailments, according to the news report.
Norfolk Southern’s lawsuit contends the information should not be released on two grounds: it’s confidential commercial information, and its release could jeopardize security of shipments. CSX Corp. is expected to file a similar lawsuit in Maryland, according to the report in miamiherald.com.
The company filed the lawsuit after two news agencies, The McClatchy Co. (which owns The Miami Herald) and Associated Press, sought documents through Maryland’s Public Information Act related to Norfolk Southern’s transport of crude oil, according to miamiherald.com.
MARTA’s current long-range transit plan for Clayton County is to extend rail service from MARTA’s East Point Station to Clayton’s Justice Center in Jonesboro. The route would pass through Hapeville, Mountainview, Forest Park, Clayton State University, and Morrow. Eventually, the route could be extended to Lovejoy.
MARTA could substitute bus service for trains if Norfolk Southern doesn’t participate, MARTA GM Keith Parker has told state lawmakers.