Celebration and Frustration

Railroad Weekly July 7, 2025

Inside This Issue

· Celebration and Frustration: RRs Concurrently Growing and Groaning

· Tripod of Volume Growth: RR Gains Tied to Coal, Grain, IM

· Tripod of Job Growth: Most New U.S. Jobs in Health, Education, Leisure

· Railer Coaster: AAR’s RIO Report Shows Ups and Downs in June

· Corn to Be Wild: U.S. Ag Freight Boosted by Corn Exports

· Equity Perplexity: Why Are Stock Prices Hitting Record Highs?

· Pain in the Gas: Pricey Nat’l Gas Helping Coal but Hurting Chemicals

· Green Energy: Greenbrier Optimistic on Railcar Demand

· Say Cheese: Midwest Rail Shippers to Meet In Wisconsin

Track Talk

“It’s not if, it’s just the timing of when.”

- Greenbrier EVP Brian Comstock

“As the fleet is aging, cars will need to be ordered.”

- Greenbrier CFO Michael Donfris

The Latest

· As the year’s second half gets underway, there are reasons for railroads to celebrate, there are reasons for railroads to feel frustrated. Collectively, North America’s railroads want nothing more than to grow. That wasn’t the case a decade ago, when their chief focus was shrinking their way to higher profit margins. But coming out of the Covid shock, they all appeared convinced that if the industry didn’t expand, pressures from customers, regulators, politicians, and unions—if not Wall Street—would become an increasingly significant business risk. They did in fact grow volumes in 2024, by 2%, according to AAR data for all of North America. But that’s after shrinking 2% in 2023. The growth in 2024, meanwhile, was only thanks to intermodal gains—carload traffic shrank by 3%.

· You can start to see why the industry’s celebration isn’t all that festive. The situation was similar during the first half of 2025, with total volumes up again y/y, by 3%. Happily, both carload and intermodal traffic showed growth (5% and 1%, respectively). But look a little closer and the first half growth was largely thanks to strength in just three categories: coal and grain (each up 6%) and intermodal (up 5%). Nothing wrong with that, but coal was merely bouncing back from a dismal 2024, grain benefited from strong exports now threatened by tariffs, and intermodal benefitted from an idiosyncratic import surge ahead of tariffs. Uncomfortably in the first half, North