Hathaway’s Harris Hire

Railroad Weekly October 7, 2024

courtesy: Steel Wheels Photography

Inside This Issue

·   Hathaway’s Harris Hire: BN Turns to a Noted Rail Biz Ops Wiz   

·   Confronting the Problem, Ed On: BN’s Harris Hire a Push to Lift Profits   

·   Uncomfortable Prosperity: Class I RRs Profitable but Unloved

·   Peace at the Ports: Feared ILA Strike Mercifully Brief  

·   Train Tracking: Getting Real-Time Data a Hot Topic for Shippers

·   Gobs of New Jobs: U.S. Hiring Still Strong; Less So in Rail-Relevant Sectors  

Note to Readers: In reference to Jim Vena’s comments at the SWARS event regarding a dinner with the STB’s Chairman (see below), Union Pacific clarified that the dinner was not with the current chairman Robert Primus, but rather with former chairman Marty Oberman.

Track Talk

“While winter comes every year, the frequency, severity, and exact location where operational challenges may occur are unpredictable and vary from one winter to the next. The winter conditions that affect the operation of a northern rail network can be summarized in four simple words: cold, snow, ice, and rain.”

      - Canadian National, from its operating plan for the upcoming winter

The Latest

·   Welcome to the final quarter of 2024. Soon, railroads will start reporting their third quarter financial results, starting with CSX on October 16^th. The industry, as 2025 approaches, continues to live in a state of uncomfortable prosperity. Class I railroads will once again report extremely high profit margins—margins that most other North American companies can only dream about. Yet the industry’s success rests on pricing power that many customers resent, and on aggressive cost discipline that often angers unions. Railroad management teams are frequent subjects of activist investor attacks. The industry’s most important customer historically—the coal sector—is in terminal decline. Its fastest growing sector—intermodal shipping—doesn’t quite command the same pricing power. One regulator (the FRA) says railroads can’t move to one-person train crews. Another regulator (the STB) is asking impatiently why the industry won’t grow. To be clear, Class I railroads don’t just deliver financial benefits to their owners. They provide thousands of well-paying jobs. They help keep trucks off the roads and carbon out of the air. They’re a vital component of international trade and commerce. They’re the only way to move many chemicals and commodities essential to everyday life. But can the industry do a better job of pleasing customers, workers, regulators, and other stakeholders? Today’s lineup of top executives—Creel, Farmer, George, Hinrichs, Robinson, and Vena —insist they’re trying.