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Savage and KCS enter joint development agreement to construct a un it train crude oil destination terminal in Port Arthur, Texas
On April 1, Savage Companies (Savage) and KCS announced that they have entered into a joint development agreement whereby Savage intends to construct, own and operate a large multi-user rail terminal in Port Arthur, Texas on property owned by The Kansas City Southern Railway Company (the Terminal). The Terminal, to be known as the Port Arthur Crude Terminal (PACT), will be served by KCS, and will be designed to bring unit train rail service of Bakken Shale Formation crude oil (the Bakken), as well as other formation crude supplies, to the Gulf Coast for distribution to pipeline or refining consumers in Texas.
The 480-acre site on which the Terminal will be built has long been held by KCS for future development, and is attractive due to its proximity to the refining industry and pipeline network. The property is also adjacent to KCS' multi-million ton capacity Pabtex coal and coke export terminal which is operated by Savage. The companies have enjoyed a solid, long-term relationship in Port Arthur. The Terminal will feature an extensive rail complex for unit trains and crude oil tank storage. Savage has begun first level engineering, design and permitting studies, and anticipates that construction will begin later this year, with completion expected by the second quarter of 2012.
Savage expects to immediately commence discussions with potential customers and subscribers at the Terminal. Plans call for Savage and KCS to work with other railroads in securing joint unit train service design for the Terminal. Savage and KCS are also exploring the potential of receiving other products at PACT including certain refined products in concert with KCS' Mexican gateway.
Allen B. Alexander, Savage's CEO and chairman in Salt Lake City, said: "We are pleased to grow and broaden our relationship with KCS, and excited to expand our services to provide a destination crude-by-rail terminal on the U.S. Gulf Coast. All of us at Savage are committed to serving this important industry by designing and operating critical touch points of the crude oil supply chain."
As for KCS: "We believe the Port Arthur refinery complex and the readily accessible storage and distribution infrastructure in the area makes this site an attractive destination for North American crude production. Savage is a natural partner for us given our existing arrangement at the Pabtex facility and Savage's expertise and commitment to the refining industry," said David L. Starling, KCS president and chief executive officer. |
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KC S honors hazmat shippers with safety award
In the U.S., KCS is honoring several customers with a Hazmat Shippers Safety Appreciation award for originating more than 500 bulk hazmat shipments on KCS without a non-accident release in 2010. These customers include Aeropres, Afton Chemical, Chemtrade, ConocoPhillips, The Dow Chemical Company, EKA Chemicals, Georgia Gulf, Linde North America, MeadWestvaco, Norfalco, Occidental Chemical, Olin, Sandhill Group, Sasol and Valero.
"Our customers play a critical role in eliminating the occurrence of non-accidental releases, so the objective of this award is to recognize and say thanks for their help in ensuring the safe rail transportation of hazardous material," said Patrick J. Ottensmeyer, executive vice president sales and marketing.
As part of its commitment as a Responsible Care company, KCS established the Hazmat Shipper Safety Appreciation award in the U.S. to promote excellence in safety, environmental protection, and regulatory compliance by our hazmat customers for their resolve in properly securing hazardous material containers for rail transportation.
All U.S. KCS originating customers shipping at least 500 bulk rail shipment loads containing hazardous material are eligible for award consideration if they have not experienced a non-accidental release on KCS during the previous year. Recognition is corporate based and not awarded to individual plants. Performance is evaluated annually and announced in the spring. |
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KCS promotes rail as carbon reduction strategy
In April, KCS participated in the Green Business Forum hosted by the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM) and the American Chamber of Mexico on the ITESM campus in Mexico City. The forum focused on fostering a greener, more sustainable and entrepreneurial culture.
As part of a panel of speakers, KCS de Mexico vice president sales and marketing David Eaton explained that railroads are one of the most environmentally-friendly and cost-effective ways to transport freight. In fact, starting April 15, KCS de Mexico marketing representatives are calculating the carbon reduction benefits of using KCS over traditional truck for all new business rate quotes.
"Carbon reduction strategies are a reality for most of our major customers. With increasing frequency, our clients are under pressure to reduce their carbon footprint. The essence of our new carbon marketing strategy is to provide our clients with quantifiable green house gas reduction statistics that help them comply with their stated environmental goals. We are convinced that our carbon marketing strategy will lead to more business for the railroad," said Eaton.
In December 2010, KCS de Mexico recognized seven customers who avoided the generation of 197,000 tons of greenhouse gases by using the KCS network to transport their products. This extraordinary achievement is a clear example of the environmental benefits of shipping by rail. These customers include Arcelor Mittal, Cemex, Dow, EXXON, Pemex, Procter and Gamble and Ternium.
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KCS strategy highlighted at National Coal Transportation Association spring conference
Recently, KCS executive vice president sales and marketing Pat Ottensmeyer, assistant vice president sales and marketing Darin Selby, and manager sales and marketing Josh Monroe attended the National Coal Transportation Association (NCTA) Spring Conference in Colorado Springs, Colo.
NCTA membership is open to producers or consumers of coal produced in North America. NCTA describes this membership structure as helping both the NCTA and transportation companies produce better and more enduring solutions involving the use of coal. The NCTA is comprised of approximately 150 coal producers, equipment and parts manufacturers, service providers, energy experts and utilities working together with transportation providers in stewardship of North America's valuable coal resources.
Ottensmeyer was a speaker at the conference and used the opportunity to provide an overview of KCS' strategy, as well as opportunities for moving coal throughout the U.S. and Mexico. Coal makes up 23 percent of KCS' revenue in the U.S. and 14 percent of KCS' consolidated revenue.
Coal from Wyoming's Powder River Basin began moving on KCS in the mid-1970's. This traffic has supported a variety of track infrastructure and capacity expansion projects over the past four decades.
Long-term, KCS is well-positioned to serve coal producers seeking options to participate in trade with China at the Port of Lazaro Cardenas with the developing Terminales Portuarias del Pacifico (TPP) coal facility. TPP will be the first dedicated public terminal for mineral bulk and steel products on the Mexican Pacific Coast able to receive cape size vessels. Initially, the facility will have capacity for three million tons per year and has the ability to increase up to six million tons upon completion of the second phase.
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KCS safety officer makes presentation to ExxonMobil
In April, KCS general director safety and training Trenton Anderson gave a presentation about KCS' safety efforts to employees of ExxonMobil. In response, ExxonMobil Baton Rouge area rail logistics group lead Pat Quint wrote:
"Thank you for bringing in Trenton Anderson to present at our safety meetings at the Baton Rouge Chemical Plant and Polyolefins Plant. The meetings went very well as evidenced through the active audience participation and interface that occurred. At ExxonMobil, we value the emphasis our rail service providers place on operating safely in the workplace. Your company's commitment to safety (five consecutive Harriman awards) is impressive and was professionally conveyed in Trenton's presentation and interactions with our employees. We look forward to building on this groundwork as we look for other opportunities to share safety ideas and safety initiatives."
KCS is pleased to bring its safety message to customers. To schedule a visit, customers are encouraged to contact the Customer Solutions Center in the U.S. or the Customer Service Center in Mexico.
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 KCS carbon calculator now available
Socially responsible shippers are evaluating various modes of transportation for environmental impact, and making transportation and logistics decisions based on minimizing their carbon footprint. When you consider that:
- A freight train moves a ton of freight an average of 480 miles on a single gallon of fuel;
- According to a recent independent study produced for the Federal Railroad Administration, railroads on average are four times more fuel-efficient than trucks; and
- Because green house gas emissions are directly related to fuel consumption, railroads have a lower carbon footprint and moving freight by rail instead of truck reduces gas emissions by 75 percent, on average...
Railroads look like a very smart, environmentally-friendly choice.
A new carbon calculator specific to KCS lanes in the U.S. and Mexico is now available on the KCS website. By selecting an origin and destination plus total freight weight and commodity, this tool will calculate the number of trucks compared to the number of rail cars needed to move your shipment, and estimate the CO2 emissions you can reduce by shipping on rail as compared to truck. |
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New demurrage application now available
As of May 1, the new demurrage application is available in the MyKCS section of www.kcsouthern.com and the new Tariff KCS 6000 is in effect. The new application allows you to:
- View all current, accurate and detailed demurrage data online for each of your inbound or outbound shipments;
- View all equipment at your facility;
- Dispute records for the current month; and
- View current invoices as well as a six month invoice history.
For U.S. customers, the change is simply the addition of a new online application, much like ones already in use by other railroads.
For Mexico customers, the change is both a new online application and a new, simplified methodology using credits and debits for the calculation of demurrage. This methodology is more consistent with railroad industry practices, was recently approved by the SCT, and will help to improve operations and functionality.
Customer training on the new application has been ongoing since early March and will continue according to our customers' needs. Please direct questions about the application to the Customer Solutions Center in the U.S. or the Customer Service Center in Mexico. |
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KCS gathers intelligence at Refining, Fuels and Transportation conference
A key function of KCS' sales operations group is market research. Recently, the team attended the Refining, Fuels and Transportation conference, which was hosted by the Global Biofuels Center in San Antonio, Texas. Their mission was to learn about emerging developments or trends that could have an impact on KCS' business and to network with respected industry experts.
The key take away points from this conference were:
- The energy industry is developing new biofuels to meet governmental demands across the globe and designing new infrastructure to meet the needs of this new fuel.
- Refining capacity is up but throughput is not meeting capacity levels in the U.S.
- Mexico is struggling to meet the demands of the domestic economy. Even with the projects planned to come online in the next 10 years, Mexico will continue to need fuel imports.
- The Canadian tar sands will become an even larger player in the U.S. marketplace as tar sands have become a proven source for the fuels industry. Pipeline construction is expected to begin as tar sand expansions increase.
- The Eagle Ford Shale in south Texas has thousands of well sites expected to begin drilling in 2012 as equipment and crews are in short supply at this time.
- The Port Arthur, Texas area is increasing refining and storage capacity and resources which will benefit the commodities moving from Eagle Ford and the Bakken shale in North Dakota and Canada.
KCS is well positioned to help meet the demands of customers in both the U.S. and Mexico. In addition, the recent agreement with Savage to construct a crude oil terminal in Port Arthur will allow KCS to play an increasingly important role in the energy markets. Key initiatives such as investing capital into the rail infrastructure and having one of the newest locomotive fleets in the industry will continue to benefit existing and potential customers. KCS' seamless rail network between the U.S. and Mexico will provide opportunities for customers to take advantage of a consistent, cost effective means of managing their energy supply chain. |
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Mina Mexico commercial station renamed Puerta Mexico
Effective March 15, the KCSM Mina Mexico EM commercial station name changed to Puerta Mexico, EM. This modification requires customers to submit their billing instructions through Internet and Electronic Data Interchange (EDI) transactions reflecting this new name. The attributes of the station (SPLC and FSAC) remain the same.
As a reminder, since early February, all intermodal freight to/from the Monterrey area should read as an origin and destination as Salinas Victoria NL station. |
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Maintenance of way activity
KCS is continuously working to keep our track in good condition to handle our customer's freight. Here is where you will find our maintenance of way team over the next two months.
May
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Location |
Work |
Expected Completion |
Impact to Service | |
Meridian Speedway (Shreveport, La. to Meridian, Miss.) |
Installing cross ties |
May |
Minor delays | |
Monterrey Subdivision |
Installing cross ties, rail renewal, bridge maintenance |
May |
Some delays | |
Tula Subdivision |
Concrete ties renewal, rail renewal, Tunnel 7 maintenance |
May |
Some delays | |
Tamasopo Subdivision |
Wood ties renewal |
May |
Minor delays | |
Saltillo Subdivision |
Undercutting |
May |
Minor delays | |
Caltzontzin Subdivision |
Rail Renewal |
May |
Minor delays |
June
|
Location |
Work |
Expected Completion |
Impact to Service | |
Tula Subdivision |
Concrete ties renewal, rail renewal, Tunnel 7 maintenance |
June |
Some delays | |
Tamasopo Subdivision |
Concrete ties renewal |
June |
Minor delays | |
Monterrey Subdivision |
Concrete T girder renewal in bridges, undercutting |
June |
Some delays | |
Vanegas Subdivision |
Rail renewal |
June |
Some delays | |
Pittsburg, KS |
Laying rail |
July |
Minor delays |
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KCS on the move
In the next two months, you can find KCS at these industry conventions. To schedule a meeting, contact the Customer Solutions Center in the U.S. or Customer Solutions Center in Mexico. May 25-27
North American Rail Shippers Association Annual Meeting
San Francisco, Calif.
June 7-9
Expo Logistica 16
Mexico, D.F. |
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People on the move
These individuals recently joined the KCS sales and marketing team: - Luis Cerezo Lara, Sales Executive, Mexico, D.F.
- Kenneth Smith, Customer Solutions Center Analyst, Kansas City, Mo.
- Evelyn Von Allmen Gutierrez, Intermodal Account Executive, Mexico
These team members were recently promoted: - Angel Apunte Aguirre was promoted from manager of market intelligence to manager of market research in Monterrey, N.L.
- Miguel Arriaga Solar was promoted from senior analyst to manager yield management in Kansas City.
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