Macro Soft

Railroad Weekly November 3, 2025

Inside This Issue

· Macro Soft: CN, CP Vexed by Weak Canadian Economy

· Still Chill: CN, CP Remain Confident Despite Headwinds

· We’ll Fight Their Right to Unite: CN, CP Voice Resistance to UP-NS

· Hooray for Santa Fe: BNSF Boosts Margins as it Fights Merger

· Sloppy Ops: For Ferromex, Margin Falls as Network Stalls

· Smart Money: Conductor Union Ratifies One Deal, Agrees to Another

· C-Suite Shuffle: CSX Announces Executive Changes

· Dollar Dance: UP Helps Fund New White House Ballroom

· Down and Done? Fed Drops Rates but Hints Cutting Might be Ending

Publisher’s Note: Last month, I joined Joe Mosher of the “Pacesetter” podcast to discuss the Union Pacific-Norfolk Southern merger. You can listen here. -Jay

Track Talk

“The industry does not need a merger to provide better service to the North American economy. What we need is more cooperation and less regulation… Now, that said, we intend to be an active and engaged participant in the merger review with a view of protecting our franchise and more broadly, competition. And if the regulator decides to approve the merger, we will, as we always do, entertain all options to create value for our shareholders.”

-Canadian National CEO Tracy Robinson

The Latest

· Canada’s Big Two railroads took center stage in the earnings parade last week. Canadian National and CPKC both delivered solid Q3 profit margins as traffic recovered from last summer’s labor unrest. But their y/y traffic growth masks deeper concerns about the troubled Canadian economy, pressured by steep U.S. tariffs imposed on auto, lumber, steel, and aluminum companies, among others. Sure enough, Canada’s GDP contracted by 1.6% in the second quarter (Q3 figures not yet available). The U.S. economy too, where both railroads have heavy exposure, is growing more slowly this year than last, especially within rail-sensitive sectors like housing and manufacturing. U.S. GDP is on track to grow about a point slower this year than last. Even worse for Canadians, the Blue Jays painfully lost the World Series.

· But as you’ll read below, CN and CPKC are anything but wallowing in self-pity. Both railroads acknowledge the economic challenges. But they’ll benefit greatly from North