A group of politicians from both sides of Washington’s great divide have joined the parade of people and organizations professing before the Surface Transportation Board the perils of poor railroad service, painting the carriers and PSR as a prime accelerant of U.S. economic problems, everything from inflation to high fuel prices to undernourished cows.
We hosted virtual investor meetings and a group call with Justin Roberts, Greenbrier’s Vice President Corporate Finance and Treasurer. North American demand remains solid, and the production ramp-up appears set to occur without additional disruptions. In Europe, the Ukrainian conflict seems to have caused transitory headwinds, which, we believe, could create noise. We remain constructive but are slightly cautious in the near term.
Cynthia Garneau on May 20 gave up VIA Rail Canada leadership with two years remaining in her nominal tenure.
Once upon a time, conservative jurists were the best friends to federal regulatory agencies such as the Surface Transportation Board (STB). When those agencies pushed the boundaries of their decision-making independence, federal courts considered them experts in their field and accordingly deferred to their interpretations of the statutes they administered.
Let’s admit it, and fix the expectation: U.S. Class I railroads have not experienced robust service recovery. Yet railroad optimism and expectations of satisfied customers persists. Why?
Railway Editor-in-Chief William C. Vantuono’s “From the Editor” about high-speed rail in America asking “Why is High-Speed Rail Such a Heavy Lift?” compelled me to put together some possible answers to the question. And to those I have added some other “fresh” ideas that people in the rail industry may not have seen in other places. First, some observations.
U.S. diesel pricing remains elevated, passing along significant costs to shippers via fuel surcharges. At Cowen and Company, we believe sustained high diesel pricing will ultimately benefit the railroads and IMCs (intermodal marketing companies) as shippers explore different modes of transport.
The National Mediation Board (NMB) has agreed to give the nation’s 12 railroad labor unions, representing some 125,000 unionized rail workers, an opportunity May 24-26 to demonstrate their commitment to a voluntarily negotiated settlement with most of the nation’s railroads over changes in wages, benefits and work rules.
The witness phase of the slugout between Amtrak on one side and CSX, Norfolk Southern (NS) and the Port of Mobile on the other, ended May 12 as its 11th day concluded. It ended not with T.S. Eliot’s oft-quoted “whimper” but truly with a bang.
We hosted another Suds with Seidl event featuring leaders across the railroad industry. Rail service continues to be severely challenged, although there have been some slight improvements in recent weeks. Rails continue to have tremendous pricing freedom, and are capitalizing despite service metrics. Intermodal demand remains high, although the recent Blume Global supply chain management platform cyberattack outage has impacted service.
