Railroad Week in Review:
Second Quarter 2002
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ending June 29, 2002
A loopy week on Wall Street, but the rails did OK. FEC was the big winner,
up 13%. Jim Valentine reports on the CSX analysts' trip. CN to help
rehab another shortline to 286. Trinity stock continues to rise even
as orders are down by half. Using www.shipcsx.com
demurrage page to measure rail receivers' internal processes. PBS on
Amtrak: Passenger trains work best between large cities less than a
day's ride apart. Chicago-LA won't work.
ending June 22, 2002
Union Pacific sweeps carload increases through Week 23 (chart). Goldman
Sachs initiates rail coverage; BNSF on Recommended List. Trinity Railcar
short sales up 36% by Mid-June. Grain trains get bigger on CSX, NS;
shipper impact positive. Rail bonds back in favor. Amtrak's David Gunn
interviewed by Jim Lehrer on PBS, sees 50-50 chance for July 1 shut-down.
On a more personal note, Philadelphia Mayor Street's Neighborhood Transformation
Initiative (NTI) took on a new meaning this week as beauty was turned
into blight in our South Philadelphia neighborhood. [details]
ending June 15, 2002
The shortline-class 1 interface is gaining increasing attention from
both sides. This week we enumerate on some of the responsibilities for
making the interchange work in a scheduled RR environment. Morgan Stanley's
Week 22 traffic report shows signs of economic recovery with CSXT in
the lead on chemicals. We list two new CSXT chemicals initiatives and
play. More on EBITDA and pro forma results, this time from Prof Wanda
Wallace of the W&M B-School. Remarks to the Merrill Lynch Transp
conference from BNSF, CSXT, NS, UP. Observations made at RRA reception
at NYSE. May carloads for GNWR up for the system, down for same-store.
ending June 8, 2002
Norfolk Southern's shortline gathering in Roanoke was a huge success
judging from observations offered up by both hosts and guests. The shortline
benefits of the Thoroughbred Operating Plan are mind-boggling if executed
well on both sides of the interchange. Chart: shortline share of NS
carloads by commodity. A Kansas rail study estimates the loss of 1700
feeder railroad miles would add $50 mm a year to highway maintenance
costs. Iowa Pacific is a new shortline holding company headed up by
Ed Ellis. Michael Dell talks about internal "friction" impeding
business growth. Amtrak now threatens to shut down the entire system.
Rail stocks emerge from a down week for the Dow
ending June 1, 2002
More on the BNSF/NS coal contract. Delaware to finance bridge rehab;
NS to pay tolls. RailAmerica sheds two light-density lines in Texas.
STB declines to overrule local court in Green Mountain Railway case.
Car-builder stocks continue to languish. TRB proposes 12.% increase
in truck weight.
ending May 25, 2002
Speaking at the January Earnings Presentation in NY, Norfolk's Ike Prillaman
said 2001 "was a watershed year for our coal business as we made
the transition from export and domestic metallurgical coal to developing
opportunities and growing the utility market." To which I added,
"The shift from export coal dependence presents new opportunities
in all business lines." See WIR for 2/2/2002. The prescient Mr.
Prillman's remarks have come home to roost. This week we delve into
the changes in Norfolk's coal trade relative to the rest of the industry
and relative to NS opportunities on the merchandise carload side. Elswhere,
BNSF and NS have a contract to bring PRB coal to Georgia starting in
18 months. Both CP and GNWR gave good account of themselves at the recent
Bear Stearns conference. And CN earned an upgrade from Morgan Stanley.
ending May 18, 2002
Intermodal loads lead commodity carloads again in Week 15. IC gets the
STB's blessing to cross KCS at grade to access plastics plant in Louisiana.
BNSF tapped by Wal-Mart as "Rail Provider of the Year" for
the fourth time running. Genesee & Wyoming April carloads up on
acquisitions in US, iron and gypsum in Australia. Bangor & Arootstic
logistics and bridge subsidiaries declare bankruptcy. Trinity Industries
shares remain stuck in $18-20 trading range as car orders lag last year.
KCS subsidiary Grupo TFM dodges competitive bullet on Mexcian antitrust
ruling. Illinois EPA fines UP for diesel fuel spilled in a wreck it
didn't cause three years ago.
ending May 11, 2002
Providence & Worcester loss widens in 1Q02 from 1Q01. RailAmerica
carloads up for April chiefly on acquisitions. Some thoughts on the
sellers' market for shortlines. Restating leverage levels for GNWR and
RRA. Storage charges increase on UP and BNSF. Railway Industry Agreement
waiver request form offered by ASLRRA on-line.
ending May 4, 2002
The news this week is concentrated around just three items. Matt Rose's
remarks to the shortlines in Orlando, couched in terms of his remarks
to the PNWARS in Portland last Feb. The business of measurement is absolutely
critical. I just spent several days with a shortline where a measured
scheduled interchange will be the difference between excellent fiscal
health and muddling through. Then there are first quarter results for
GNWR and RRA. In both cases I've tried to drill down to the core business
and in both cases it was a challenge. With any luck I got it right.
Do let me know what you think.
ending April 27, 2002
Earnings Week was truly that with all the class 1s reporting at once.
The constant thread was one of lower revenues and (mostly) still lower
operating expenses. The good news is the hiatus in loadings due to the
soft economy provided opportunities to make the railroads run better.
The thrust of the accompanying text is on better operating practices,
commercial positioning and trends as opposed to strict financial reporting.
That's because WIR readership is comprised mostly of railroad managers
and logistics professionals depending on reliable freight services.
Knowing who's doing what and why can make a difference. At the end of
the commentary is a chart comparing the major class 1s on many of the
same metrics used in the blanchard.com Benchmarks Spreadsheet.
ending April 20, 2002
CP and FEC get favorable mention as asset plays in Barrons. GNWR reports
March and quarterly carloads up. Two RailAmerica properties win ASLRRA
awards. Class 1s to report 1Q02 earnings next week -- specifics on respective
websites. CP and CN stock prices lead for the week. Comments on car
repair and performance of TRN, GBX, WAB, GMT. Good marks for CSX Financial
Supplement available for downloading as a PDF.
ending April 13, 2002
Alamada Corridor completed with benefits for UP, BNSF, Anacostia's Pacific
Harbor Line. Matching Dow Jones sector performance to rail traffic by
STCC. Potential impact on NS' stock price if utility coal shipments
slow near-term. Genesee & Wyoming terminates Arthur Anderson relationship.
RailAmerica March carloads up en toto, down on "same railroad" basis.
Greenbrier posts loss after write-downs. Lessons for railroads in IBM
Annual Report. Corrected dividends chart
ending April 6, 2002
Rail stocks this week got set back a bit from the gains of last week,
but with dividends there may still be room for some growth. CN goes
to court to challenge shortline application for access to CN customers.
RailAmerican sells off 102 miles in Georgia. NS poised for turnaround,
announces East Carolina Business Unit to operate 485 miles of light
density track. My opinion on Amtrak long distance trains.