WIR 2018, Third Quarter

All issues in Adobe Acrobat format.

Week ending September 28
The Northeast Association of Rail Shippers (NEARS) holds its annual fall conference in Tarrytown, NY. Stifel touches on recent developments in the Oil & Gas Exploration and Production arena. Soybean growers continue to get hammered by the US trade restrictions. Cherilyn Radbourne writes that CN is well-positioned to cope with next year’s burgeoning demand for its service. Iowa Interstate Railroad promotes Joe Parsons to President and CEO. RailTrends 2018 coming to the Times Square Marriott in NYC November 29-30.

Week ending September 21
KCS holds its annual “Strategic Partners Conference” in KC; partnership with short lines and regional railroads a key ingredient to growth. Union Pacific debuts “Unified Plan 2020” based on Precision Scheduled Railroading principles; builds on “Blend and Balance” initiative begun in May.

Week ending September 14
CP holds its first short line meeting in ten years at their stunning Calgary campus; both short lines and CP itself learn a lot from each other. North American AAR railroad revenue units year-to-date ending September 8 increase 3.6 percent; merchandise carloads ex-auto, 34.1 percent of total units, up 3.2 percent. KCS and CSX make leadership changes in their commercial groups.

Week ending September 7
Week 35 merch carload numbers are encouraging; short line favorite commodities playing a strong role. Canadian National buying 60 more GE units; rationale for the order comes from customers’ increasing demand for CN services. Kansas City Southern releases Sustainability Report, “For the Long Haul.” OmniTRAX sells its Hudson Bay Railway and Port of Churchill facility to local interests. Eyal Shapira adds two new properties, gets 286 access to his Raritan Central.

Week ending August 31
Twelve short lines and regional railroads to benefit from the recent FRA award of more than $200 million to assist with the deployment of PTC systems; summary of short lines and nature of grants. Vermont Railway opens new propane rail and truck terminal in Hampton, NY; room for expansion. CSX dwell times explained and measurements improved; time for short lines to start tracking carload trip plan compliance.

Week ending August 24
Canadian Pacific has finished the 2017-2018 grain movement season with September 2017 alone being a record month; adding grain hoppers and locomotives to move still more even faster. CP and GWR have begun their direct service into southeastern Ohio from Vancouver, BC; bypassing Chicago interchanges, the service offers flexible destinations and creates compelling round-trip economics. Comparing short line and Class I carloads for June; six-year Class I commodity trends. New York & Atlantic has tapped Chuck Samul to be Director of Sales and Marketing effective September 1. Further comment on the “financialization of companies” — how distant ownership saps entrepreneurial creativity to the detriment of the customer.

Week ending August 17
Genesee & Wyoming North American revenue units for July were up 12 percent year-over-year, with about the same mix dominating; bulk commodities from ag products and aggregates to coal and lumber comprise 80 percent of GWR total units. The USDA has upped its forecasts for the 2018-19 crop year, saying that total corn, wheat, and bean production could increase two percent following two years of declines; relative impact on railroads. A look at fertilizer trends and where railroads can benefit. The dangers of railroads being turned into financial companies from service providers. Gary Marino is back in business.

Week ending August 10
BNSF reports Q2 revenues of $5.69 billion on units up five percent, largely from merchandise carloads (industrial plus ag products); merchandise revenues increase 14 percent, powered by a 16 percent gain in the industrial side. Week 31 CSX carloads stagnate at 2017 levels; reorganizes operating leadership under COO Ed Harris. CSX cuts run-through intermodal lanes off UP.

Week ending August 3
Why the Cult of the Operating ratio is getting out of hand; running a service business vs. a business zeroed in on shareholder returns. American Railcar Industries to build a 7,650 cars for GATX; a mixed bag of both good and bad news. Russian potassium on its way to taking a bite out of demand for Canadian potash? The so-called “watershed” states are once again in the limelight.

Week ending July 27
Canadian National posts 2Q revenue of C$3.6 billion, up nine percent, on 1.5 million revenue units, up six percent; ops performance metrics on the mend. Norfolk Southern 2Q operating revenues of $2.9 billion up 10%; revenue units up 6%. Genesee & Wyoming reports 2Q as strongest quarterly carload growth for its North American properties since the 2011 first quarter — 430,000 revenue units, up 8%; NA operating income was $80,000, up less than a point.

Week ending July 20
Q2 earnings call for four roads. Three Class Is plus GWR to go. CSX leads off with total revenue of $3.1 billion, up six percent, on 1.6 million revenue units, up two percent; merch carload revenue including automotive increases six percent, Union Pacific Q2 total revenue increases eight percent to $5.7 billion on four percent more revenue units (2.2 million); volumes trending up — UP is now running about 180,000 loads a month vs.160,000 two years ago. Canadian Pacific Q2 total revenue increases seven percent to C$1.8 billion on 679,000 revenue units, up two percent. KCS Q2 total revenue increases four percent to $682 million on a one percent gain in revenue units; revenue gains in five of six commodity business units.

Week ending July 13
Cars-in-storage trends can give some insight as to what’s coming in terms of merch carload volumes; boxcars, mill gons and covered hoppers being kept busy — a positive sign for the merch sector. Some encouraging words about the small business sector; why that’s good for small railroads. How an aggressive BD program can woo and win customers. OmniTRAX takes ownership of two lines previously leased from CSX; their Panhandle Northern to benefit from community’s FRA grant request.

Week ending July 6
Class I railroads see a slowing of frac sand loads into the Permian Basin over the next few months, for several reasons; I name several shortlines that can add to outbound crude oil capacity. Tank car demand is there; time to get them out of storage. Trains magazine on CP accomplishments; how the shoes fit short lines. China to Austria by container train in ten days including two gauge changes.

Leave a Reply

Your email address will not be published. Required fields are marked *