Blanchard Railroad Week in Review, First Quarter 2008

The Railroad Week in Review:
First Quarter 2008

Current Issues

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Week in Review, 1/4/2008
Canadian National continues its buying spree with the acquisition of the 202-mile Athabasca & Northern in Alberta. Patriot Rail has made its third acquisition, the 34-mile Utah Central Railway. RailAmerica beefs up sales force in Northeast. Value Line ranks the rail industry 51st in earnings growth potential for 2008. Byron Wein, Chief Investment Strategist for Pequot Capital, cites potential for recession in 2008; weak short lines at risk. BNSF makes Forbes “Best-Managed Companies” list in the transportation category. Who exactly is TCI?
Week in Review, 1/11/2008
Barron’s this week ran a Q&A on commodity pricing and the implications for Class Is and short lines are significant. Greenbrier, with its unusual fiscal year for this industry, reported Q1 earnings (November close) that missed the estimates. Short lines garner $millions in grants and loans. Wellsboro & Corning gets a new operator.

VDRPT has finished its Economic Assessment report on the proposed regional intermodal facility near Roanoke. Credit Suisse rail analyst Jason Seidl writes, “2007 was nothing short of a volatile year." Watco acquires the operations of Reload Inc. Providence & Worcester and GATX team up in equity-leasing agreements.
Week in Review, 1/18/2008
Conflict in the air at MWARS: the need for more rail capacity vs. the threat of investment-limiting legislative and regulatory proposals by certain special-interest groups. A visit to the South Shore's freight operations. PWX redux. Short line performance measurement at CSX.
Week in review, 1/25/2008
It's earnings time again. CSX leads off breaking the $10 billion annual revenue mark for the first time. CN takes a 3% yoy revenue bath. NS hits record revenues even though volumes were not what one might have liked. UP ups quarterly revs 6% yoy on essentially unchanged volumes. Chart comparing the four for the full year. Not pretty.
Week in Review, 2/1/2008
The relationship between operating income and eps. BNSF revenues up, vols down, ops income flat. CP revenues flat, vols up 3%; the railroad is running better than ever. Tony Hatch on BNSF and UP results. Greenbrier buys wheel supplier. Tables.
Week in Review, 2/8/2008
KCS turns in a strong, understandable performance with lots of operating cause and effect. Icahn moves on GBX; combo with his ARII in the wind? Bulls and Bears -- Goldman upgrades KCS, Zacks takes CSX down. PSAP takes a good step forward toward getting rid of the demurrage annoyance.
Week in Review, 2/15/2008
Genesee & Wyoming’s 2007 results for the fourth quarter and year are
impressive. CSX holds its 19th annual short line confab – the
longest-running show in the business -- this coming week. Reader feedback on
what’s working and what needs improving. Anonymous shortline managers' Class I
criticism unwarranted and not helpful to the good of the order.
Week in Review, 2/22/2008
Notes from the CSX short line conference. The disconnect between what
railroad lobbyists say in DC and actual rail-shipper working relationships. Why railcar manufacturing and demand are leading indicators for the railroad business as a whole. Car cycle time a key and recurring theme. Week Six traffic for short lines and Class Is.
Week in Review, 2/29/2008
What the future may bring for coal-hauling short lines. Tony Hatch writes about the FY 2007 results and their implications for 2008. Morgan Stanley and Bear Stearns comment on the truck-load scene and I relate both to the merch carload trade. More take-aways from the CSX short line meeting. How Bay Colony Rail increased carloads by a factor of six in 20 years.
Week in Review, 3/7/2008
More on the migration from north to south and how it affects short lines. Finding the opportunities. Credit Suisse and RW Baird write about changes in the truckload sector. Patriot Rail adds a fourth property. CSX Chair Michael Ward holds forth on TCI before Congress and CNBC. Shortline takes from BNSF Analysts Day. How long can we keep charging more and more for less and less?
Week in Review, 3/14/2008
Tony Hatch reports on the Railroad Equipment Conference. Lessons for shippers, lessors and users. Bear Stearns observations on car supply. UBS and BSC provide very different takes on the Congressional hearings on TCI and CSX. Over-supply in the truckload sector through Q1? Does the Dow Theory still apply? The folly of stripping out food and fuel from "core" inflaton related to the folly of looking at RR ops costs ex-fuel. Canadian Short Line conferences in the same week in May. Short line merch carload gains through Week 9 mask Class I organic losses in the category.

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Laura Blanchard, email preferred lblanchard@rblanchard.com