Blanchard Railroad Week in Review, Fourth Quarter 2024

The Railroad Week in Review:
Fourth Quarter 2024

[No Week in Review December 27]

Week ending December 20
Genesee & Wyoming's Central Oregon & Pacific has reached an agreement with Union Pacific to handle local service to and from the latter's Eugene Yard in Oregon; two reasons why this is a positive development. Inflation and the real rate of change in carloads vs last year; AAR commodity chart. This is the last Week in Review for 2024; what to expect in 2025.

Week ending December 13
The rewards of paying close attention to SEC filings, earnings call conferences, operating metrics, and so forth. Staying ahead of the business cycle; two charts. Encouraging words from the AAR — the economy is "generally on solid ground."

Week ending December 6
While combing through the financial reports sent to the SEC, I frequently find items that tell me the numbers I'm looking at may not necessarily represent what I'm looking for; examples. ASLRRA reports $millions in government grants in KY, NC for shortline infrastructure projects. We're still not seeing much of an improvement in merch carload volumes year-over-year; chart.

[no Week in Review November 29]

Week ending November 22
Can coal make a comeback; probably not and why. Observations from RailTrends 2024.

Week ending November 15
Observations regarding CSX Investor Day 2024 generally encouraging; clearly the CSX goal of attracting new business is in the process of being achieved. Why share prices trading in a range reflect zero rate of change in revenue units; accelerate the rate of change of new business and see share prices rise.

Week ending November 8
BNSF 3Q2024 freight revenue increased 3% to $5.7 billion on 2.5 million revenue units, up 8%. System RPU slipped 5%, mainly in auto/intermodal. Merch revs — ag+industrial at BNSF — increased 6% on 5% more carloads. The year-to-date revenue unit breakout by category is roughly 55% intermodal (a box is a unit), 29% manifest commodity carloads, 13% coal/coke, and 3% automotive. The ASLRRA has been busy spreading the word about regulatory missteps, CRISI awards, and the April annual meeting in Denver.

Week ending November 1
CPKC freight revenues increased 6% to C$3.5 billion even as revenue units slipped 3% to a million-point-one. BUT...RTMs increased 4% and therein lies the whole CPKC story. UP freight revenue increased 4% to $5.8 billion on 2.2 million revenue units, up 6%. Operating expense came down 2%, nicely complementing the 3% gain in total revenues. Luddites at work.

Week ending October 25
Earnings Calls: I sensed a renewed sense of commitment to the customer and an increased focus on the kind of operations that create customers. The financial reporting was very clean and I sensed no hidden agendas while listening between the lines, as it were.

Week ending October 18
Chemicals, grain, and aggregates continue to be the top three commodity groups handled by non-class I railroads. Non-Class I commodity carloads YTD thru August. Chat GPT conversations increasingly look like e-mail exchanges — UP steam and general ops, e.g. Railway Age "Innovation Showcase" highlights further advancements in AI applications in railroad ops; FRA political considerations a threat?

Week ending October 11
Why I think there is less to the WSJ story on PSR to BNSF than meets the eye. The link between and among revenue units, the ISM and the business cycle. Charts.

Week ending October 4
Greetings: North Shore Railroad Group opens brand new feed mill; only feed mill loop track in Penna. Week 39 revenue unit volumes do not excite. Outlook for 4Q2024 and beyond; how sloppy RR service adds to customer costs and drives away business.

THE BLANCHARD COMPANY
2041 Christian Street - Philadelphia PA 19146-1338 (215) 985-1110 voice - (215) 985-1446 fax
Roy Blanchard, rblanchard@rblanchard.com
Laura Blanchard, lblanchard@rblanchard.com