Class I railroads

5 Wall Street impressions about proposed CP-KCS merger

A photograph of a Kansas City Southern locomotive.

Canadian Pacific (NYSE: CP) announced plans to acquire Kansas City Southern (NYSE: KSU) for $29 billion on Sunday morning. Here are five initial impressions from Wall Street transportation analysts about this proposed transaction.

Wall Street likes the deal

The merger of CP and Kansas City Southern (KCS) would be combining two of the smallest Class I railroads. It would also be integrating two railroads that are striving to reach an operating ratio (OR) in the mid-50s. OR, represented in a...

https://s29755.pcdn.co/news/5-wall-street-impressions-about-proposed-cp-kcs-merger

Class I railroads outline 2021 projections, February weather impacts

A photograph of a Union Pacific facility at an industrial facility.

All of the publicly traded Class I railroads presented at investment bank JP Morgan’s industrial conference last week. Here are some themes expressed through the multiday event:

Weather dents February’s rail volumes and could impact first-quarter results

When the Class I railroads reported their fourth-quarter earnings results in January, they anticipated favorable volume expectations for 2021.

That outlook hasn’t changed for most, given rail volumes in January and March, but the severe weather...

https://s29755.pcdn.co/news/class-i-railroads-outline-2021-projections-february-weather-impacts

Analysts all in on transportation stocks; transition to services spending no threat

Transport stocks looking up, according to analysts

A couple of bullish reports this week highlight reasons to favor transportation stocks moving forward. The outlooks call for favorable freight fundamentals around demand, utilization and pricing to remain in place for the foreseeable future.

Consumer demand not likely to wane anytime soon

UBS (NYSE: UBS) transportation analyst Tom Wadewitz said he sees a “perfect storm” for freight demand, pointing to tight capacity, inventory rebuilding and a steady stream of stimulus money. “The combination of...

https://www.freightwaves.com/news/analysts-lean-in-on-transport-stocks-spending-on-services-not-a-threat

Weather hits J.B. Hunt’s Q1; intermodal prospects favorable

Intermodal segment most impacted by bad weather

In an appearance at an investor conference on Wednesday, management from J.B. Hunt Transport Services (NASDAQ: JBHT) said the recent stretch of inclement weather is likely to hit first-quarter operating income by $15 million to $20 million.

The company reported operating income of $155 million in the first quarter of 2020 and $208 million during the fourth quarter as a comparison.

John Kuhlow, J.B. Hunt’s CFO, said the winter storms produced “probably one of the hardest winters that we’ve ever...

https://www.freightwaves.com/news/weather-hits-jb-hunts-q1-intermodal-prospects-favorable

Technology’s long, and likely continuing, impact on freight rail headcount

A photograph of a man standing in front of a parked train locomotive.

The freight railroads’ industrywide deployment of technology has been a key factor in headcount fluctuations throughout the decades. 

But technology’s impact on the number of employees working for the U.S. freight railroads in the future could depend on the railroads’ balance sheet goals or on federal or state intervention, according to industry observers.

Historical link between technological advancements and headcount

Headcount levels typically reflect market demand for rail service, with higher...

https://s29755.pcdn.co/news/technologys-long-and-likely-continuing-impact-on-freight-rail-headcount

Class I railroads upbeat about intermodal in 2021

A photograph of intermodal containers on a train.

Class I rail executives are hoping anticipated higher North American intermodal volumes will be a moneymaker for their companies in 2021.

The COVID-19 pandemic is continuing to spur high e-commerce levels, with consumer spending expected to remain elevated, executives said over the last two weeks in fourth-quarter earnings calls to investors and analysts. Meanwhile, executives also hope to convert some truck volumes to rail amid the tight truck market.

“Projected strength in consumer spending,...

https://www.freightwaves.com/news/class-i-railroads-upbeat-about-intermodal-in-2021

US Class I rail headcount tumbles 14% in 2020

A photograph of a Union Pacific train.

The U.S. operations of the Class I railroads employed the fewest number of employees in 2020 since at least 2012.

Headcount at U.S. Class I rail operations totaled 120,492 employees last year, a 14% decrease compared with 140,185 employees in 2019, according to data that companies provided to the Surface Transportation Board (STB). This annual average was the lowest since at least 2012, the earliest year that FreightWaves has data available. 

Within that total, headcount for train and engine...

https://s29755.pcdn.co/news/us-class-i-rail-headcount-tumbles-14-in-2020

Regulators: Railroads beat deadline for anti-crash technology rollout

The long-awaited rollout of anti-crash technology known as positive train control (PTC) among all railroads required to install the technology is now complete, according to the Federal Railroad Administration (FRA).

PTC, which was mandated as part of the Rail Safety Act of 2008, is now in operation on all 57,536 required freight and passenger railroad route miles – including seven Class I railroads, Amtrak and 28 commuter railroads – prior to the year-end deadline set by Congress.

“Achieving 100%...

https://www.freightwaves.com/news/regulators-railroads-beat-deadline-for-anti-crash-technology-rollout

5 big freight rail themes in 2020

A photograph of a train driving through a desert.

To say that 2020 was a roller-coaster year might be an understatement. From COVID-19 to congestion, here are five themes that dominated the freight rail industry in 2020.

Coronavirus causes volume volatility

Perhaps the dominant theme of 2020 could be the impact of the coronavirus pandemic on rail volumes and the freight rail industry overall because the industry is still feeling the pandemic’s impact 10 months since the outbreak first began in North America.

Rail volumes crashed in April and May,

https://www.freightwaves.com/news/5-big-freight-rail-themes-in-2020

Class I rail headcount plunges to new low in November

A photograph of a train crossing over a bridge. The train is hauling intermodal containers.

Employee headcount among the U.S. operations of the Class I railroads in November was at its lowest level since at least early 2012.

U.S. operations of the Class I railroads employed 114,960 in mid-November, which is 13.7% lower than November 2019 and 1.58% lower than October, according to data submitted to the Surface Transportation Board. 

November’s total is the lowest in 2020 and the lowest total since January 2012, which is the earliest date for which FreightWaves has data.

All six employee...

https://s29755.pcdn.co/news/class-i-rail-headcount-plunges-to-new-low-in-november

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