Blanchard Railroad Week in Review, Fourth Quarter 2023

The Railroad Week in Review:
Fourth Quarter 2023

[No Week in Review December 29]

Week ending December 22
BNSF "urgent Issues" progress report in chart form; wish the other Class Is would make their reports as accessible as this. There are definite signs that 5 of 6 Class Is will be paying more attention to customers in 2024; NS announces marketing retrenchment. This is the final installment of the 2023 Week in Review series. Your continued interest and involvement are greatly appreciated. For 2024 I'm looking for a resurgence in manifest carload volumes, continued good health in export coal tonnage, and a possible decrease in international intermodal boxes.

Week ending December 15
Stock-picking vs. ETFs; role of merch carloads in keeping valuations up. BNSF publicizes performance metrics; graphic from bnsf.com.

Week ending December 8
Two railroad-initiated expansion projects that would provide significant public benefits found objectionable by that very public. UP and a shortline wanting to re-establish service on an 11-mile Utah branch line to reach a sizable business park near Salt Lake City voted down by the STB; brilliant Member dissent. NIMBYs object to Georgia short line wanting to extend its property 5 miles to add more businesses and access CSX; without the railroad, the business expansions could put 20,000 new trucks on the highways.

Week ending December 1
John Deere manufacturing outlook as leading indicator of ag-related railroad carloads; shortline example. Why STB's first mile/last mile measure should include Class I interchanges with short lines and regional railroads. RailTrends 19 perhaps the best ever; collaboration and trust among all players — railroads and customers — key themes.

[No Week in Review November 24]

Week ending November 17
Five senior-level railroad conversations at the Stephens conference. Sound bites from all. Common thread: avoiding analyst-speak, talking opportunities, showing where the warts remain. Generally avoided conversations about the OR, stressed other metrics. Seeking out more collaboration between Class Is looking for greater distances between OD pairs. Measurable customer deliverables trump cost-cutting.
An observation: Although presenters brushed OR talk aside, certain sell-side analysts in the audience still brought up the OR in the Q&A. Goes directly to George Soros' comments on reflexivity: ratings given per the anaylst's perception pushing up share prices even though the underlying fundamentals suggest otherwise. That's how we get PE multiples in the 20s.

Week ending November 10
Why I track economic news and trends; parallels with railroad volumes and share prices. BNSF Q3 financials; soft volumes but decent financials.

Week ending November 3
BNSF Q3 carload/intermodal mix; financials next week. UP's Kenny Rocker on service commitments. CEO Jim Vena on staff cuts, elaborates on measuring more things to fix more things to meet more customers' expectations.

Week ending October 27
CN revenue down 6.6% to $C4.1 billion on 1.4 million revenue units, down 7.1%; additional volumes to come seen in most carload commodities. CPKC numbers somewhat skewed do to merger accounting; what's behind the numbers. NS revenue down 7%; total revenue units 1.4 million, down 7%.

Week ending October 20
UP leads off the earning season; revenue units drop nearly 3% to a shade over 2 mm. CSX posts 4% freight revenue decrease to $3.2 bn for 1.6 mm revenue units, down 2.3%. AAR petroleum products outlook.

Week ending October 13
UP leads off the earning season; revenue units drop nearly 3% to a shade over 2 mm. CSX posts 4% freight revenue decrease to $3.2 bn for 1.6 mm revenue units, down 2.3%. AAR petroleum products outlook.

Week ending October 6
NS does 3 mm 3Q revenue units, down <3% YOY; is NS regaining some of its lost momentum? Industrial chemicals and the ISM; why a low labor/raw materials cost ratio helps; charts. AAR posts excellent Sep and YTD 2023 results.

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