Canadian Pacific’s proposal to Norfolk Southern. The tenor of the dialogue regarding the buyout proposal was cautious and, I believe, tended to be more supportive of evolutionary change. Surface Transportation Board Chairman Dan Elliott told us that if there’s a filing, the process could take 16-plus months.
CN continues to set the standard — and not only with its reported 3Q operating ratio (OR) of 53.8. EVP and CMO JJ Ruest noted that CN’s capital plans should continue at roughly the same pace to support long-term capacity, surge capacity, service and safety efforts. JJ was also one of many presenters to discuss the “bright side of cheap natural gas,” which CN will see in western Canada and Louisiana.
Short lines still providing manifest/industrial carload exposure for Class Is — perhaps never more important, given the challenges to bulk. We heard from leaders at four top players in the field — Genesee & Wyoming CFO TJ Gallagher, Watco CEO Rick Webb, Patriot Rail President and CEO John Fenton and OmniTRAX CEO Kevin Shuba. All save the latter (no coal!) noted that their volumes have not improved, but each has employed innovative efforts to drive business to their lines, an exhausting and constant practice.
Tony Hatch is an independent transportation analyst and consultant, and a program consultant for Progressive Railroading’s RailTrends® conference.