The Great Freight Rate Wait

Railroad Weekly December 9, 2024

courtesy: Steel Wheels Photography

Inside This Issue

· Great Freight Rate Wait: RRs Impatient for Lower Interest Rates

· Stock in the Mud: RR Stock Prices Tumble

· Don’t Worry, Be Happy: RRs Continue Efforts to Downplay Tariff Concerns

· Primus Animus: STB Chair Attacks Again, This Time the AAR

· Bose and Arrows: The FRA Chief Too, is Sparring with RRs

· PSR on Water: CPKC Excited About New Ocean Liner Alliance

· Separation on Automation: East Coast Port Peace Still Elusive

· Consumer Strength, Manufacturing Weakness: Will Trends Change in 2025?

Publisher’s Note: As a reminder, Railroad Weekly publishes 48 out of the 52 weeks per year. Our last issue for 2024 will be December 16th. The first issue of 2025 will be on January 6th.

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Track Talk

“Typically, when railroads have more volume, which we’ve been able to deliver this year, you see the inverse relationship with their car velocity. Not at Union Pacific. As we’ve been able to grow the volume, we’ve been able to improve our car velocity. That’s what operational excellence truly is.”

- Union Pacific VP of Operations Eric Gehringer

The Latest

· Was it something they said? Railroad stocks tumbled last week, despite an otherwise pretty good week for the broader stock market. The job market too, showed further evidence of strength. Holiday spending is robust. No new major developments in the tariff discussion. There were even a few green shoots from the sluggish manufacturing sector. But good news might be bad news. Railroad execs have increasingly emphasized their eagerness to see lower interest rates, which would likely help stimulate many of their critical markets—autos, housing, steel, lumber, etc. But signs of ongoing U.S. economic strength make it less likely that the Fed will grant the railroads their wish. At a New York Times event last week, Fed chair Jay Powell said, “Growth is definitely stronger than we thought, and inflation is coming a little higher.” Much of Wall Street, to be clear, does expect a quarter-point cut at the Fed’s