Blanchard Railroad Week in Review, Third Quarter 2022

The Railroad Week in Review:
Third Quarter 2022

Week ending September 30
Why The non-Class I railroad community commodity base is an excellent measure of the total railroad manifest carload business. Dow Jones Theory stock chart. Fall NEARS conference observations; GWR example of Class I and short line collaboration. The downside of "train time is any time."

Week ending September 23
Former Ford Motors exec to replace Foote directly; review of CSX performance under Foote — customer comments. Housing starts and lumber carloads; AAR charts.

Week ending September 16
Strike averted — for now; steps taken in case of strike remain instructive. Are the railroads still relevant; how the business continues to change — lessons from Penn Central and Rock Island bankruptcies. AAR carload trends chart.

Week ending September 9
AAR Revenue Units for Week 35 continued their downward trend year-over-year; dwell/velocity chart. NS Week 34 declines in spite of improving KPIs; presentation slide.

Week ending September 2
AAR Revenue Units for Week 35 continued their downward trend year-over-year; dwell/velocity chart. NS Week 34 declines in spite of improving KPIs; presentation slide.

Week ending August 26
The Presidential Emergency Board (PEB) appointed last month issued its non-binding conclusions August 16 (WIR 8/22) and now the fun begins. American Chemistry Council members continue to report freight transportation disruptions that have “negatively impacted” supply chains; plastics vs aggregates RPU/distance comps.

Week ending August 19
Making book on potential outcomes of PEB recommendations; three possibilities. Labor productivity measures — UP approach realistic; presentation excerpt.

Week ending August 12
Greetings: BNSF posts OK results for 2Q2022. Revs 15% to $6.5 bn on 2.5 mm rev units, -6%./ RPU +22%; ops income +7%, besting rival UP by 6 points. Comment on BNSF “Customer Notifications” website feature. Why pay attention to the ISM Manufacturers’ Purchasing Managers Index; historical trends, what we can learn from them.

Week ending August 5
The triple hazards of increased rates, slow car cycle tines, higher per-ton lease costs, and customer supply chain damage. FRA proposed rule on locomotive cab staffing does not address embedded doubling of crew costs, loss of railroad competitive advantage, impact on railroad fluidity, and operations where a lone engineer has been the practice for decades, such as MU commuter trains.

Week ending July 29
Revisiting the subject of de-globalization and intermodal volumes; Larry Gross weighs in. Canadian National’s second quarter results show how operating to plan relates to customer satisfaction. Norfolk Southern Q2 revenue increases to $3.3 billion, up 16 percent — all of it on rate increases. Canadian Pacific total revenue C$2.2 billion on a one percent decrease in revenue units; grain was the big hit.

Week ending July 22
Precision agriculture addressing complex supply chains; the railroads’ role in simplifying food distribution and availability. CSX reports small volume increases with double-digit rate increases; operating income barely budges. Union Pacific does the same with car-counts and rates but with a strong carload commodity mix; focus on car-miles per day, average operating inventory.

Week ending July 15
Houston-area industrial park contract switching company files to become common carrier; potential benefits. Lumber futures and housing starts; AAR chart. CP operational improvements and share price gains trending up and to the right.

Week ending July 8
Why the privately-held candy maker Mars Inc. approach to “stakeholderism” is something Class I railroads would do well to model; Berkshire Hathaway parallel and BNSF. Author Peter Zeihan on the decline of globalization; potential effects on railroad traffic patterns. Early look at Q2 railroad results nothing to write home about; has the asset base gotten too big to manage?

Week ending July 1
Train delay trends by railroad; NS worst, BNSF second worst. Field crop conditions and ag products carloads; pie chart of grain carloads by commodity. Peter Ziehan book teaser.

THE BLANCHARD COMPANY
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Roy Blanchard, rblanchard@rblanchard.com
Laura Blanchard, lblanchard@rblanchard.com