Halftime Show

Railroad Weekly June 30, 2025

Inside This Issue

· Halftime Show: The Top Ten Developments of 1H

· Looking Back: Did RRs Have a Good First Half?

· Underlying Crying: 1H Volumes Drop, ex Coal, Grain, Containers

· A Transcontinental Wedding? Is it the Only Path to Growing?

· Rail Freight Update: UP Shares Its Latest Observations

· Is Autonomy the Enemy? Parallel and Friends Make the Opposite Case

· Neighbor Rattling: Trump Angrily Calls off Trade Talks with Canada

· Have You Tried Re-Booting? CPKC Operations Face IT-Related Headaches

· Is the Spending Ending? New Figures on Household Consumption

Track Talk

“BMWED has consistently embraced technology because it has empowered our members to work safer and smarter while making our railroad network safer, which is in direct contrast with the actions of the railroad industry, which has recklessly pursued cost-cutting at the expense of safety and quality of service in the past decade. The industry has drastically reduced its workforce levels by over 30 percent to unsafe levels while relying on unproven technology that cannot replace the expertise and skills of the workers the railroads let go.”

- Tony Cardwell, President of the Brotherhood of Maintenance of Way Employes Division (BMWED); testifying on Capitol Hill

The Latest

· We’ve arrived at the mid-way point of 2025, meaning Q2 earnings season is just around the corner. Canadian National will be first to report, on Tuesday, July 22^nd.

Railroads are not exactly in a mood to celebrate as they enter the second half of the year. For sure, the first half was in many ways pleasing. Class I profit margins were strong as usual in Q1. Operational reliability was generally good throughout the half. Labor tensions were generally mild. And freight volumes increased versus last year, a key accomplishment for an industry whose top commercial priority is exactly that: Volume growth. However, the volume growth was largely driven by a surge in international intermodal traffic and strong bulk demand, specifically for coal and grains. That’s all well and good, but railroads badly want to grow their merchandise and industrial traffic. Unfortunately, excluding intermodal, coal, and grain, North American rail volumes declined 1% y/y, according to a Railroad Weekly analysis of