Blanchard Railroad Week in Review, Third Quarter 2010

The Railroad Week in Review:
Third Quarter 2010

Current Issues
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Week in Review, September 24
August, 2010 carload comps from the AAR, ASLRRA, RailAmerica and GWR. ASLRRA highlights new funding sources and a data base to compare state programs. "Buy American" may stop Maine passenger service extension in its tracks. Health insurance costs hit short lines hard; impact on hiring is clear.
Week in Review, September 17
Notes from the Eastern Region ASLRRA meeting in Baltimore. Disconnect between shortline and Class I merch carload goals; too many railroads chasing too few cars? Encouraging signs from the steel industry. Discouraging signs from Jay Rockefeller; the Members will never let a good deed go unpunished.
Week in Review, September 10
An interview with US Rail Partners' John Howell about his company's latest shortline acquisition. Cherilyn Radbourne sees Canadian rails as "safe havens" given the economic turmoil in the US. Excerpts from Wolfe Trahan shipper survey; implications for short lines and the merchandise carload business. NS opens Heartland Corridor. Map. Book review: The Cars of Pullman.
Week in Review, September 3
Why the LAL (and others if its ilk) do good when times are bad. Gulf & Ohio to absorb Lancaster & Chester. Reader feedback on the economy. Kaufman on trends and analysis. Price-book multiples and high-frequency trading; how low RR stock prices can affect short lines. Some comments on upcoming seminars and meetings.
Week in Review, August 27
Observations on the two kinds of short lines: those that can carry their own weight and those that can't. What readers say about railroads in this economy. The Wall Street Disconnect. GWR July carloads up 7% yoy. P&W commodity car-counts up 25%, breaks even on ops income. Watco joins AAR.
Week in Review, August 20
A positive view on the economy based on our Virginia trip. RailAmerica July Carloads up 5% (We'll comment on GWR July carloads next week). Patriot Rail acquires Weyerhaeuser railroads, inks lease agreement in NC. Implications of The Andersons Rail Group recent news. Art Cashin on deflation. RailTrends tees up Sept event in NYC. Two book reviews.
Week in Review, August 6
GWR brings up the markers on the 2010 second quarter earnings season showing how running bigger trains, not more trains, can be a shot in the arm for per-car yields. UBS sees brighter future for coal volumes. Dennis Gartman waxes poetic on the value of "stuff" stocks; I add the railroad benefit angle. Wolfe Trahan & Co shares some trucking insights. WIR takes a holiday August 13.
Week in Review, July 30
NS, KCS and CP round out the Class I calls with one common thread: You can add more cars without increasing variable expense all that much. The batch just gets bigger. Try that with trucks where every move is a custom-made product.RailAmerica shows there IS a future in the merchandise carload business as it continues its remarkable turnaround story. First half BNSF coal and intermodal loads per AAR stats uninspiring; merchandise and ag looking much better. GWR reports next Tuesday.
Week in Review, July 23
UP and CN post outstanding results for the second quarter though the AAR confirms vols still lag 2008 levels. UBS says housing still not out of the woods -- UP and CN results support this too. Maine ponies up $18 million for the MMA; the Enviro Assessment from the STB says the railroad won't really be missed as 90% of potential rail users don't use it anyway.
Week in Review, July 16
Train-watching on the northern Virginia reaches of the NS "Crescent Corridor." Notes from the annual NS shortline meeting in Roanoke; why I think NS is leading the industry in shortline carload growth. CSX leads off the Earnings Season with a 33% ops income gain on 22% more revenue and 13% more volume. RA and GWR post double-digit carload gains for June.
Week in Review, July 9
Will the revenue-unit gains of the first half last into the second half? Round Two of the "Ninety-percent Economy" thread. Why marginal short lines continue to be at risk. Don Phillips on TSA's over-reaction to RR photogs. Are Class Is recovering volumes at a faster clip than the short lines? At this early stage of the game the answer appears to be yes.
Week in Review, July 2
Sharp sell-off in Tuesday's financial markets bodes ill for rail freight volumes going forward. What I call the "90-percent economy." Week 25 car-counts; look for Week 26 comps between Class Is and Class IIs and IIIs. RailAmerica buys Atlas Railroad Construction in an accretive transaction.

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Roy Blanchard.215-913-7740 mobile, royblan@icloud.com
Laura Blanchard, 215-985-1445, lblanchard@rblanchard.com