Topic: Rail & Intermodal

Total second quarter, at 4,579,798 units, increased 2.4% annually, marking the seventh consecutive quarter of annual growth, following eight straight quarters of annual declines.

Rail carloads, at 233,085, posted a 6.4% annual gain, and intermodal containers and trailers, at 279,724, eked out a 0.2% annual increase

As of August 7, the U.S. has put new tariffs in place on goods from dozens of countries. The updated rates vary widely, with some close trade partners seeing 10 percent tariffs and others facing rates above 40 percent.

A common refrain among industry stakeholders has been that they know tariffs are coming, or have already arrived, but they badly want, and need, some clarity and stability on tariff rates in order to effectively take action, as it relates to a whole host of things, including: operations; sourcing and procurement; inventory management; capital expenditures; and hiring and staffing, among many others.

Following a late July development, in which the framework of a large trade deal between the United States and the 27-nation bloc comprising the European Union, which collectively represents the largest trading partner for the U.S., was finalized, various reports published earlier this week stated that the EU is pausing is planned tariffs on U.S. goods, originally set for August 7, for six months, providing more time for both sides to come to terms on a broader agreement.

The July Services PMI, at 50.1 (a reading of 50 or higher signals growth), fell 0.7% off of June’s 50.8 reading, growing, at a slower rate, for the second consecutive month.

The most recent organization to come out against the deal is the Freight Rail Customer Alliance (FRCA), a group comprised of large trade associations representing more than 3,500 electric utility, agriculture, chemical, and alternative fuel companies.

While some previous implementation dates for the White House’s reciprocal tariffs placed on goods imported into the United States had seen those dates pushed back, or paused, that was not the case this time around.

Rail carloads, at 231,029, saw a 0.9% annual gain, and intermodal containers and trailers, at 283,250 units, rose 1.3% annually.

While leadership at Class I railroad carriers Union Pacific (UP) and Norfolk Southern (NS) touted the benefits of this week’s announcement, coming to terms on an $85 billion deal in which UP will acquire NS—to create the nation’s  first transcontinental railroad that will connect more than 50,000 route miles across 43 states from the East Coast to the West Coast and connect around 100 ports as well—feedback from various shipper groups has been less than receptive to the deal.

The overall outlook remains fluid, in terms of the pace and also significance of trade deals being made up to the August 1 deadline. John Lash, group VP of product strategy for connected supply chain platform services provider e2open, provided LM with his analysis of what shippers may be in store for when the new tariffs formally take effect.

Quarterly consolidated revenue, at $21.2 billion, fell 2.7% annually, and basic earnings per share, at $1.55 (short of Wall Street estimates of $1.57), fell $0.24, or 13.4%, annually. Total operating profit, at $1.8 billion, decreased 6.3% annually. 

Following a heavy amount of speculation that Omaha-based Union Pacific (UP) was taking steps to acquire Atlanta-based Norfolk Southern (NS), in first Class I railroad merger since the April 2023 deal, in which Canadian Pacific acquired Kansas City Southern for $31 billion, that was subsequently respectively confirmed by the companies in recent days, UP and NS announced today that they have come to terms on an agreement for a deal.

With only a few days left until the end of the reciprocal tariff pause between the United States and its trading partners, the framework of a large trade deal was brokered yesterday between the U.S. and the 27-nation bloc comprising the European Union, which collectively represents the largest trading partner for the U.S.

A Bloomberg report, citing people familiar with the matter, noted an agreement could be reached as soon as this week, adding, if the deal came to fruition, it would represent the largest railroad deal on record.

Fort Worth, Texas-based Class I railroad carrier BNSF Railway said it rolled out a new, expedited, third-day rail service, running from Los Angeles to Houston. Company officials said that this service, which went live on July 10, is comparable to over-the-road service options and represents a significant advancement in the company’s ability to deliver fast, consistent and reliable transportation offerings.

Total June volume, at 1,469,872 units, fell 0.3% annually, following a 0.5% annual May increase.

Rail carloads, at 223,968, posted a 4.1% annual increase. Intermodal containers and trailers, at 272,220 units, were up 1.4% annually.

A report stated that Omaha, Neb.-based Union Pacific (UP) “is working with investment bankers at Morgan Stanley to explore the acquisition of a rival.”

June retail sales, adjusted for seasonal variation and holiday and trading day differences but not price changes, came in at $720.1 billion, up 0.6% over May’s $715.5 billion and up 3.9% annually. And total retail sales, from April through June, posted a 4.1% annual gain compared to the same period a year ago.