WIR 2018, Fourth Quarter

Week ending December 21
The Dow Theory and share prices; what they tell us about the State of the Union and its effect on the railroad outlook. Table. What REALLY is Precision Scheduled Railroading; Quotes from Hunter’s book set the record straight.

Week ending December 14
RailTrends 2018 recap. More than 300 attended; all the Class Is and 14 non-Class I operators represented. Adding value to the customer, PSR, sustainable profitable growth, reliability the major themes. Regional and short line panel on first-mile/last-mile role; creating a custom process out of the batch process delivered by the Class Is. Why carload trip plans must be dock-to-dock. Rod Case on trucks eating our lunch and what to do about it.

Week ending December 7
Precision Scheduled Railroading at RailTrends; does Wall Street care? Comparing share price trends with shortline volume trends. Canadian Pacific debuts new “high efficiency” covered hoppers for grain. Three grain originator plant expansions benefit CN and CP.

Week ending November 30
Two shipper experiences where railroad service is either very, very good, or, like the little girl with the curl, horrid. Why inconsistency alienates customers and keeps new business away. Further thoughts on the financialization of railroads. Some facts about oil prices and their impact on railroad carloads of petroleum products.

[No Week in Review November 23 – Thanksgiving break]

Week ending November 16
Precision Scheduled Railroading (PSR) is the subject of a recent note from Cowen railroad analyst Jason Seidl; he writes that NS and UP have not done well at keeping the customers ahead of the PSR learning curve. Genesee & Wyoming October revenue units for North American operations increase 8.1%; YTD revenue units up 6.4%. Light sweet crude for December delivery closes Monday at $59.03, a price not seen since mid-March; possible bright side for US shale drillers. RJ Corman buying Bill Drunsic’s Nashville operations. AAR says nearly 300,000 freight cars are in storage — empty and ready for revenue loads.

Week ending November 9
BNSF Q3 freight revenue increased 14.8 percent to $5.8 billion; the combined merch carload sector (ag+ industrial) brought in revenue of $2.7 billion, up 21 percent on 11 percent more carloads. NS names Mike Farrell SVP Transportation; based on his terminals experience at CN and CP, I’d say this is a very good call. GWR shows how a successful acquisition program should work. Railfax report with commodity trends against each other; grain regains top billing.

Week ending November 2
The Commerce Department reports that the gross domestic product grew at a 3.5 percent annual rate in the third quarter, down from 4.2 percent in the second quarter; could be the inventory buildup caused the 3Q surge in rail volumes and the tight truck capacity leading to that. GWR North American carloads increased nine percent to 446,219 with double-digit gains in Metals, Waste, and Other (mostly empties); carloads increase in 12 of 14 commodity groups. Freight car builders and suppliers report generally positive conditions. RailTrends to highlight PSR and how it’s grown.

Week ending October 26
Canadian National freight revenues increased 15 percent to C$3.5 billion as revenue units crept up three points but RPU leapt nearly 12 percent; CN aiming for longer lengths of haul, generating more revenue per carload and RTM. Norfolk Southern posts total freight revenue of $2.9 billion, up ten percent on five percent more revenue units and a six percent RPU gain; merchandise carloads including auto up three percent — a clear opening for short lines. Union Pacific revenues up ten percent on six percent more revenue units and a four percent increases in RPU; three themes emerge.

Week ending October 19
CSX blasts off with freight revenues up 12 percent to $3 billion on 1.7 million revenue units — up four percent — and system RPU up nine percent. CP freight revenue increases 20 percent to C$1.9 billion on a 14 percent RPU gain and five percent more revenue units to 702,000. KCS railroad revenues were a record for any quarter, more than $1.1 billion, up six percent on a four percent increase in revenue units.

Week ending October 12
There seems to be general agreement among WIR readers that truckloads — and intermodal boxes by extension — are mainly consumer goods and manufactured products whose volumes are subject to the whims of the economy; commodities — stuff that would hurt if you dropped it on your foot — are not as subject to economic ups and downs — you gotta heat and eat. Further thoughts on CP Intermodal Demand Management; pioneer TCS work on the MoP. Eliminating Unplanned Events in merch carload service. Emerging markets in a railroad context.

Week ending October 5
Canadian Pacific hosts 2018 Investors Day on its Calgary campus; take-aways for short lines. NS Q3YTD carload summary. Why natural resources commodities are important for short lines. Matt Rose to retire next April.

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