The Railroad Week in Review:
Third Quarter 2013


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Week ending September 27
TIGER grants are alive and well in Florida and Wisconsin: who gets how much, for what and where. Jerry Johnson reflects on the STB's paper barrier changes and the effect on further line transfers to short lines. Bill Greene on why the CSX target ops ratio in the mid-60s is doable. Jason Seidl says NS is "modestly ahead," though I say that depends on what you're measuring. Alcos step aside on the A&M. CP closes Calgary loco shop over exhaust complaints.

[No Week in Review September 20]

Week ending September 13
The Feds may be running out of money but they still find TIGER-$ to spread around -- VTR and NHN have $million paydays. Rio Grande Pacific's Nebraska Central turns 20; festivities planned. Why there may be less to the recent uptick in lumber carloads than meets the eye. GWR Aug NA carloads up a bit -- petroleum products the winner tho coal and ag still a drag. STB's new paper barrier rules won't do much to encourage further Class I spinoffs.

Week ending September 6
Texas-based Andrews Group to provide petroleum fire-fighting countermeasures for short lines running crude-oil trains. Preventing a repeat of Megantic-scale damage to home and hearth. Limiting shortline liability exposure. One suggestion on where NS can cut ops costs and improve single-carload yields.

Week ending August 30
Requiescat in pace, Rick Corman. Union Pacific Short Line Conference highlights.

Week ending August 23
Providence & Worcester second quarter results; freight revs up 12% to $8 million. CSX gets well-deserved high marks from Barclay's. Preview of UP shortline meeting in Omaha next week. ASLRRA to inaugurate safety training program at Eastern Region meeting in Norfolk next month. BNSF updates hazmat train operating practices, makes "first responder" training available to connecting roads.

Week ending August 16
Week 31 (Aug 8) Shortline traffic up 8% -- 2% if you back out coal, crude, intermodal. GWR July loads up 8% all-in; 10% ex-coal, crude, intermodal. Whatever happened to chems industry "Responsible Care" program? How short lines can implement best practices. Insurance implications? MMA loses Canadian "Certificate of Fitness," ordered to cease ops by Aug 20.

Week ending August 9
BNSF posts strong second quarter results with best-of-class showing in the merch carload arena. LB Foster Q2 rail sales off ten percent on slower than anticipated Class I capex spend; encouraging words about the shortline space. FreightCar America earnings miss; too much emphasis on coal. Chart of Class I coal trends. MMA files for bankruptcy; rail industry taking steps to prevent a repeat. CN and GWR leadership setting the pace.

Week ending August 2
FEC reports a stunning second quarter -- a real four-bagger with wins all round. GWR year-over-year metrics effectively double on RA acquisition; apples-to-apples same store revenues up 10 percent, two-thirds of that from North America. Forest products and housing starts -- is there cause for cheer? UBS shows nine quarters of down-then-flat revenue growth for S&P leaders.

Week ending July 26
CN, NS and CP wrap up the 2Q Class I earnings calls. CP bested all comers for percentage gains in freight revenues, RTMs, merch carload revs, percentage drop in ops expense and points of improvement in the OR. NS lags the pack in carload revenue increase percentage and system RPU change. CN's strength is in running a superb carload network with the lowest OR in the biz; CP is clearly a Work in Progress with quantum leaps in key metrics. The question remains, where does it level out?
NS is a mystery. The railroad is in physically great shape, their core network is fast and efficient and they have a cadre of bright and energetic people running the show. The merch carload sector represents 68% of RTMs and 63% or revenue; Wick said at the short line meeting just a few weeks ago that NS is looking to the carload network to offset much of the coal drag. Yet Merch vols up 2% and merch RPU's up one-tenth of one percent suggests something's amiss.
GWR reports next Wednesday and I expect Berkshire on Friday so we can put some revenue numbers behind the BNSF carload data -- which, BTW, shows the largest Q2 percentage merch carload gain among the Class Is.

Week ending July 19
CSX, UP and KCS quarterly results are in. CSX vols weak but controlling costs today to improve tomorrow's margins on potentially smaller volumes. UP unleashes a swirl of superlatives. KCS does exceptionally well in the face of a severe downturn in grain. More fallout from Lac-Megantic. CP hires CN ops veteran to run Eastern Region. Rich Timmons tapped to stay on another year.

Week ending July 12
A summary of events leading up to the MMA incident in Quebec. Some questions to ask suggesting steps to take in order to prevent a repeat. Why some consumer goods customers receive raw product by rail and by inference why railroad managers need to pay attention to consumer spending patterns.

Week ending July 5
A short-ish letter this week owing to the Fourth of July holiday. Nonetheless, having the first-half carload data to start your first second-quarter week could prove useful. In addition to slicing and dicing the AAR data for meaningful shortline comps, I ran specific high-volume STCCs for CSX and NS and found them running the same course: flat to down. Tables.

 

 

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