Blanchard Railroad Week in Review, Second Quarter 2025

The Railroad Week in Review:
Second Quarter 2025

Week ending June 27
AAR carloads for Week 24 (ending June 14) show revenue units dipping slightly compared 2024 but realizing a modest YTD gain; it's encouraging to see more green than red in the year-to-date change column. Even though the AAR Week 24 numbers are not all that robust, YTD in 2025 four of six months show increases in total rail volumes. Train speeds have been stuck in a rut since 2020. Duration Capital Partners makes $600 mm minority equity investment in Watco.

Week ending June 20
Union Pacific CEO Jim Vena and CFO Jennifer Hamann gave a solid presentation at the June 10 Wells Fargo Industrials & Materials Conference. There was only one slide and is speaks volumes about UP's progress in improving the customer experience; selling "the user experience." Cowen report: relevancy for customers. Railway Age Insights telecast: BNSF CEO Katie Farmer emphasizes three key themes: technology, talent, and the customer experience. Looking for talent that can bridge the gap between field operations and enterprise decision-making.

Week ending June 13
Why AI is truly coming of age for railroads; using it for pointers to background on news items and investing trends. How the railroads' quarterly 10-K and 10-Q report on railroad management views of what's coming next and what to do about it. How Proxy Statements spell out who gets paid how much for what and why; seeing whether management is incentivized to build something that lasts—or just chase quarterly applause.

Week ending June 6
Why I dislike non-GAAP numbers; comparing Norfolk Southern results after East Palestine incident with both GAAP and non-GAAP numbers. ISM manufacturing numbers improving slightly; portents for the railroad commodity carload sector.

Week ending May 30
A most amusing exchange with ChatGPT on the subject of investing using characters from Jane Austen's Pride and Prejudice; what Week in Review hopes to accomplish and how. Why keeping things in relative value is invaluable when it comes to allocating resources or prioritizing partnerships; a fertilizer lesson. Using Class I railroad share prices reflect trends in railroad carloads.

Week ending May 23
My take on Greg Abel as Warren Buffett successor as Berkshire CEO; see him as "a very different animal" — he's an operator at heart, with a deep background in energy and infrastructure. Katy Farmer accomplishments as BNSF CEO an excellent fit. Coal making a comeback? Not necessarily.

Week ending May 16
The AAR reports that U.S. railroads originated 1.13 million total carloads in April 2025, up 6.2% over April 2024 — the largest year-over-year percentage gain in 16 months and the third largest in nearly four years; very much at odds w 5-year trend. Railroad debt load increasing and the trend is toward even more debt. Charts: Why demographics is key. What to do about it. Return-free risk?

Week ending May 9
BNSF Q1 revenues unchanged year-over-year at $5.5 billion, revenue units saw a 4% increase to 2.4 million; Greg Abel to take the Berkshire CEO helm -- probable impact on future BNSF capital allocation strategies. Lighthizer on the decline of manufacturing in the US; how railroads can capitalize on these trends.

Week ending May 2
CPKC reported 1Q2025 results on Wednesday. Freight revenue came in at $C3.7 billion, up 9%, on 1.1 million revenue units, up 3%.; pricing power on carload business should remain stable. CN Freight revenue $C4.3 billion, down four points on 1.3 million revenue units, off 2%; "solid underlying demand" propelled the quarter's commodity carload gains.

Week ending April 25
CSX freight revenue of $3 billion, down 7% on 1.5 million revenue units, down 1%; total revenue $3.4 billion, down 7%. NS revenue units were up just 1% to 1.7 million; revenues $3 billion, essentially unchanged. UP freight revenue increased 3% to $5.1 billion; revenue units increased 7% to 2.1 million.

Week ending April 18
Mostly about tariffs, the future of manufacturing in the US, and the effects on railroad commodity carloads. Why physical gold and gold ETFs are gaining share of investors‘ portfolios. Still very concerned about the financial ability of marginal non-Class I railroads to sustain themselves.

Week ending April 11
Tariffs, up, down, and sideways, have dominated the news this week; shippers are moving orders forward to beat the perceived tariff hikes. Real Vision is taking a more positive approach, citing historical trends that show markets recovering after downturns. Neither investors nor I aren't buying it; YTD chart of the I-shares Dow Jones Transportation Average Industry Fund ($IYT).

Week ending April 4
How the Rule of 100 works; 49CFR references. Tariffs and trains. Railroad volumes ticked up Week 12.

THE BLANCHARD COMPANY
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Roy Blanchard, rblanchard@rblanchard.com
Laura Blanchard, lblanchard@rblanchard.com