Jan 18, 2018
I'm afraid you're looking at some rather old photos.
Rail stocks continue to do well for the most part, with solid gains yesterday (04/01/2019) borne of overall economic data. The chart shows trailing 12 Month performance. Dividends are not included, which extends these gains to even higher levels. NS is the topmost line on the graph at 46%, with CSX next at 40%. By comparison, the S&P 500 is up 11% in the same period.
Interesting to see correlation of economy to performance. All seem to be following the same path. KCS seems to be lagging. What is their situation?
That's a good question regarding KCS and I have no idea. Perhaps loss of coal tonnage to utilities? Circumvention of KCS routes by BNSF and UP? KCS has followed industry trends with sporadic gains, but a long term chart shows KCS is selling at the same price that it was six years ago.
Long ago I analyzed a number of rail stocks and while KCS had some attraction, I crossed it off my list because of management's apparent want to keep the road isolated and independent. I figured that every Class I in North America had knocked on KCS's door wanting to buy the road and was turned away. While that may be a noble tribute to tradition, it's erased any sort of merger premium its shares might have enjoyed and it hasn't translated into better earnings.
I am gonna go on a rant for a bit here but it is all relevant.
If I were a TYE employee for CSX, UP, NS or many other outfits, I would be very worried, as they seem to be downsizing themselves into a problem, as with almost all Class 1 outfits these days. They are all on a sort of binge to drop services and routes for short term gains and be damned with long term losses, driving more tonnage to the HWY's. It is basically the 1980's all over again. The infrastructure that is being demolished and sold off every day, will never come back, and these outfits can't give the tonnage/infrastructure up fast enough, and all for short term profits, for the admired/celebrated investment bankers. But hey it's the American way, so who am I to say it's bad.
Even though BNSF (and I am an employee) is privately owned, it is tied to all this as the pressure for return will effect BNSF as well. Right now there are 235+ car trains operating all over the USA, this is supposed to make investors happy as it is less crews. But they don't mention all the re-crews for these colossal trains, and all the other trains that went DOL because no where to make meets, but these re-crews can be attributed to other reasons, all a big shell game.
Is there a law somewhere actually on the books for how long a train can block a crossing? I was told 15 minutes, but I don't think that is correct, These 14,000 ft+ long trains will be holding folks up for a LOT longer than that, especially if they go DOL waiting for another train to meet them.
Very frustrating to see a wreck of sorts coming, with no way to stop it.
Kind of a good thing KCS is rebelling here, I wish there were more RR with the integrity to do same.
But I prolly wrong.
Quite a few, but they're all local laws.
I've sometimes wondered about what life was like inside BNSF, Warren Buffet and all. It seems that large privately-owned companies compete just as hard has publicly-owned firms do.
I looked at NS's Capital Expenditures (aka Capx, long term investment in facilities) for 2019 and find it's $1.8 Billion, including intermodal facility expansion in Kansas City and Chicago, and added track capacity throughout the system. Also worked will be 2.5 Million wood crossties and 2.1 Million Metric Tons of ballast. There's grade crossing and signal work too, though it looks like NS PTC signal work is finally leveling off. BNSF is spending $3.6 Billion in Capx, up from $3.4 Billion last year.
What I dont get it this. CSX can sell the land to a developer who will cram 600 condos on the site. BUT, 100 ft or so away is the very busy BNSF yard. People are going to buy their dream condo (sarcasm) and on the first night, realize that the yard operates 24 hours a day.
Who would want to leave right next to the BNSF yard?
They'll complain, get a lawyer and sue the railroad for noise. Of course completely overlooking their failure to do their due diligence before they bought....
I grew up along the EJ&E in the late '60s and '70s when it saw perhaps four trains a day on its Western Sub in northern IL. As the years went by, tonnage dwindled away and suburban subdivisions brought thousands of new homes along its mostly forgotten line. Enter CN and their purchase of the 'J' in 2009. CN's ever increasing tonnage off the former Soo was soon diverted onto the EJ&E at Leithton, IL and the 'J' was again alive in a big way.
You can imagine the cry from homeowners who ignored the railroad as being a dying entity and were now seeing more trains. Most recently the CN wants to add siding capacity on the line. Local politicians and their constituents are in complete opposition and are using reams of varied environmental regulations to bring misery upon CN for daring to even think of investing in line improvement. Corrupt municipalities and loudmouth residents extorted all kinds of favors from the CN when they bought the 'J' and they're seeing another juicy opportunity to cash in.
During WW-II the Army Air Force developed Gulfport (MS) Field as a bomber training base. After the war it was donated to the city of Gulfport. Over the years it became the Bayou View residential community and neighboring Gulfport Municipal Airport. You guessed it, inhabitants soon protested the noise caused by Southern, Delta, and private airplanes landing and taking off. C'Mon people, what did you expect buying a house next to an airport?
Fools, all of them.
We seem to live in an increasingly detached and insulated society, where forethought and power of observation has been eclipsed by what they happen to find on social media.