They’re on. They’re off.

Railroad Weekly March 10, 2025

courtesy: Steel Wheels Photography

Inside This Issue

· They’re on. They’re off: Erratic U.S. Tariff Policies Stress the Economy

· Stop and Start: CPKC Shares Its Latest Thoughts on Tariffs

· Gold Start: Tariff Drama Aside, CPKC Enjoyed Strong Jan., Feb.

· Sooner Landing: Shippers Importing Early to Avoid Tariff Pain

· You Belong to Me: CN Completes Takeover of Iowa Northern

· Give Us Your Freight, Intermodal Now Great: J.B/BN Pitch for More Biz

· Met Threat: Another Bad Year for Metallurgical Coal Freight?

· Lumber Slumber: Another Bad Year for Forestry Freight?

· The Steal Industry: The Growing Menace of Train Robberies

Track Talk

“Today we celebrate this important milestone, as we welcome the Iowa Northern team into our CN family of railroaders. Both CN and Iowa Northern have built their reputations on putting safety first, and by delivering innovative, sustainable and reliable transportation solutions to our customers.”

– Derek Taylor, Canadian National’s Executive Vice-President and Chief Field Operating Officer

The Latest

· They’re on. They’re off. They’re on. They’re off. U.S tariff policy swung wildly and unpredictably last week, sending tremors of uncertainty through the North American economy. Stock prices dropped again last week, extending a multi-trillion-dollar loss in value since the start of the year. Most railroad stocks fell too, though Union Pacific gained after tariffs on Mexico and Canada were again postponed. On Tuesday, following a last-minute one-month reprieve, the U.S. imposed a 25% levy on nearly all imports from its two neighbors. But one day later, President Trump announced another month-long delay—just for automakers. And one day after that, he extended the extra month delay to a broader set of products covered under the USMCA trade deal. We’ll see what actually does and doesn’t happen next month.

· Separately, the U.S. on April 2nd plans a new round of reciprocal tariffs on countries around the world. Trump has threatened other tariffs on specific sectors as well. In the meantime, China—which was hit with higher U.S. import duties imposed last week (no delay on that)—turned around and slapped steep new tariffs of its own on Canadian farm products like pork and canola (this in retaliation for Canada’s new duties on Chinese electric vehicles, steel, and aluminum, imposed last fall). Note that many Canadian ag products exported to China are sent via rail to the ports of Vancouver or Prince Rupert before their transpacific maritime journey. Same for energy—the producer AltaGas expects more gas exports to Asia, despite China’s actions. A new terminal it’s building in Prince Rupert (a stronghold for CN) will be able to accommodate 3,000 railcars.

· According to RailState, in the seven days leading up to Tuesday’s implementation of U.S. tariffs on Canada (before they were postponed), the number of freight trains moving southbound across the border from Canada spiked 11% versus their 30-day average. Railcar volumes were up even more, ranging from 17% for tank cars to 31% for covered hoppers. Train volumes from Mexico into the U.S. were also up—by 14%—as shippers scrambled to get their imports in before tariffs. Autoracks crossing into the U.S. from Canada and Mexico were up by 28% and 17%, respectively, versus their usual average.

· Though some companies like the steelmaker Cleveland-Cliffs express unequivocal support for America’s new tariff approach, most firms are expressing deep concerns as they address investors during earnings calls and financial conferences. The U.S. Chamber of Commerce, representing U.S. companies large and small, said “Tariffs on Canada and Mexico will have a real, devastating impact on thousands of small businesses across the nation, and discussion of further tariffs on other countries is creating uncertainty.”

· Back within the rail sector, Canadian National finalized its takeover of the Iowa Northern, positioning it to win more ag business, i.e. grain, fertilizer, and renewable fuels. Other recent Class I shortline takeovers include CSX’s purchase of Pan Am, BNSF’s purchase of the Montana Rail Link, Norfolk Southern’s purchase of the Cincinnati Southern Railway, and Canadian Pacific’s purchase of the Central Maine & Quebec Railway. On the other hand, Union Pacific is moving in the other direction with its recent move to outsource some local operations to G&W’s Central Oregon & Pacific Railroad. Each strategy has its own advantages and disadvantages.

· The Brotherhood of Locomotive Engineers and Trainmen union (BLET) won the