Blanchard Railroad Week in Review, First Quarter 2026

The Railroad Week in Review:
First Quarter 2026

Week ending March 27
The Iran war; how rising crude oil prices affect everything from diesel fuel to fertilizer. The growing US demand for electricity; the Berkshire Hathaway solution; the crucial BNSF role therein. A lesson for all railroad operators.

Week ending March 20
The importance of knowing what went wrong as opposed to simply dwelling on the historical why stuff happens; finding the root cause of the unplanned event. Digging into the why and relentlessly pressing on the what went wrong. Artificial intelligence's real comparative advantage is in the amalgamation of weak signals into recognizable patterns. The war in Iran and its impact on the railroads; more drilling and more frack sand?

Week ending March 13
The discussion of using AI in trip planning and streaming railroad operations continues. It appears my use of the vernacular has been well-received, based on mail from active railroad managers who have their CLE licenses. Why railroads are absolute, or, to quote Ayn Rand, A is A. At the end of the day, If the railroad knew when 80% of customer cars would be ready to depart for a distant node, they could schedule trains accordingly.

Week ending March 6
BNSF closed 2025 with $22.8 billion in freight revenue, essentially flat year over year, on 9.6 million revenue units, also unchanged. The headline, however, is below the revenue line: full-year operating income rose 8% to $8.0 billion on flat revenue, driving a 2.5-point improvement in the operating ratio to 65.6; This OR reflects not financial engineering but operational execution. Greg Abel's first shareholder letter as CEO of Berkshire Hathaway shows emphasis on operating earnings, insurance float durability, and reinvestment optionality. Highlighting BNSF President Farmer reinforces BNSF's status not merely as a financial holding but as a core operating pillar,

Week ending February 27
There continues to be a buyer's market for transportation services; truckers still beating each up on rates. The planned UP takeover of NS continues to raise eyebrows; there are deeper reasons to take a very cautious approach to this whole exercise, and they start with operational control. WIR continues its shift toward process and away from product.

Week in Review, February 20
NS derailment on Horseshoe Curve: operational and cultural takeaways. Operationally, Horseshoe Curve is main artery linking east and west markets for NS; blocking it hurts the railroad down. Culturally, the railroad's notably restrained public posture following the incident marks a departure from prior practice. In ordinary times, a derailment at Horseshoe Curve is an operating problem to be fixed. In the present moment, it is also something more: a reminder that Norfolk Southern's performance is now being measured not just in tonnage moved, but in confidence sustained. To be continued...

Week in Review, February 13
Railroad Week in Review has warned over the years that U.S. railroads are drifting from stewardship toward financialization; shifts in corporate culture to blame. Comparing Abel the Allocator with Vena the Operator. How intermodal rewards discipline and punishes illusion — and it will do so regardless of how the transaction is framed.

Week in Review, February 6
Canadian Pacific Kansas City ran 1.1 million revenue units in Q4, up 1%, and 4.5 million for the full year, up a respectable 3%. System RPU was unchanged in the Q and up a point for the year. Canadian National delivered a modest top-line improvement in Q4 2025 with freight revenue of C$4.3 billion, up about 3% year-over-year. Norfolk Southern reported freight revenues of $3 billion in Q4, unchanged YOY. Total Q4 revenue units came down 2% due largely to coal's 11% drop; merch units including auto gained a mere point.

Week in Review, January 30
CSX opens 4Q2025 earnings-call season with what can fairly be described as so-so results. Revenue $3.2 billion, down 1%, on 1.6 million revenue units, up 1.4%. Union Pacific reports 4Q2025 freight revenue of $5.8 billion, down one percent, on 2.1 million revenue units, down 4%.

Week in Review Extra, January 28
This Week In Review Extra enlarges on a recent UP/NS STB Filing from Drew Robinson of Atlantic Systems. He argues that whereas the Applicants have laid out WHAT they plan to do, the financial HOW is lacking. He lays out several of the considerable costs of the UPNS initiatives but suggests the filing doesn't say who pays for what. In short, this is where the filing leaves the realm of theory and enters the realm of checks, debt markets, and balance sheets.

Week ending January 23
I am quite pleased to see the STB rejected the UP/NS "merger" application. The STB's language in its Decision is quite clear and free of legalese. The Board's rejection could also be read as a demonstration of their regulatory independence after Vena so unwisely set them up as under the thumb of the President.

Week ending January 16
The merger Applicants argue that the US needs a single railroad. connecting the Atlantic and Pacific Coasts. Maybe. It's a question of control. Canadian grain flows gradually orienting away from the U.S. market and toward direct offshore outlets. The Class Is report their 4Q2025 results starting the afternoon of January 22. Reminder: The next "Rails to the Future" industry conference is coming in May from the Broad College of Business at Michigan State University. Drop me a note if you need more info.

Week ending January 9
My comments about paper barriers in the context of the proposed UP-NS transaction brought forth some helpful observations from a dear friend with whom I have worked on shortline issues for more than 20 years; why the 1998 Railway Industry Agreement between the ASLRRA and RIA needs to be revived. A long-dormant Genesee Valley RR upstate New York rail line
returns to life after 25 years of inactivity.

Week ending January 2
The deeper I delve into the UP+NS merger filing, the more I'm convinced this is really all about intermodal and the merchandise carload franchise is almost an afterthought. Intermodal low-margin, highly subject to diversion rates. Why carload doesn't need a merger and continues to pay the rent. Another example of how short lines build business by creating customers.

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