The Midwest Association of Rail Shippers held its Winter meeting in Schaumburg, Ill., Jan 14-16. Katie Farmer, President and CEO of BNSF, opened the conference with her usual crisp and uplifting presentation stressing the railroad’s objectives. Farmer outlined the four objectives BNSF is striving to keep and achieve while building customer satisfaction:
- Safer Operating Structure.
- Good Consistent Service.
- Continued Investment in Infrastructure.
- Be Relevant to the Customers.
Farmer outlined current operating performances. In 2024, BNSF had its best velocity since 2016. Also, BNSF completed the last 50 miles of double tracking in Kansas on the Southern Transcon, leaving only two bridges on that route not double-, triple- or quadruple-tracked.
CSX Vice President Business Development Christina Bottomley, OmniTrax Chief Commercial Officer Ryan Higgins, Intersect Illinois Senior Vice President Business Development Paulina San Millan, and ASLRRA President Chuck Baker held a panel on procedures followed by railroads as they leverage industrial development opportunities. “Size is not the only consideration in developments,” they noted. “Future employee requirements often play a significant reason some projects are rejected.”
CN Senior Vice President and Chief Strategy Officer Patrick Lortie welcomed the inclusion of the Iowa Northern in the CN network. Patrick also stressed four points of a successful operation: Interaction with the unions. Collaboration with business partners. Communication with the customers. Excellent service to restore customer trust. “This will all come together with this year with right people and equipment in the right place to operate efficiently,” Lortie said.
Luncheon speaker Thomas Landstreet, an author and former Vice President at the Laffer Institute, gave an entertaining and insightful presentation on macroeconomics and the four “Grand Kingdoms”:
- Monetary: the amount of money printed.
- Fiscal: the taxing process.
- Trade: the basic exchanging of goods or services.
- Regulations: what often slows or hampers growth.
“Federal spending is 37% of GDP,” Landstreet said. “How do you increase GDP? The government will spend more money. Lowering of interest rates is usually followed by inflation as too much money is chasing too few products. The result is that the real GDP is actually 20% lower because of inflation. Recession often starts after Feds begin cutting rates, so beware and wait to see what happens this time around.”
Patriot Rail CEO Brandy Christian emphasized the synergy short line railroads bring to the table. “We have a focus on the local while understanding the global picture,” she said. We offer expanded service with transloading and warehousing solutions and often partner with new industrial sites and maximize public private partnerships. Our innovative approaches and solutions include partnering with the Class I’s, working together on meaningful improvements.”
Ozinga Executive Vice President Rail James Kornas stated that Ozinga “is not just a cement company.” He explained that Ozinga is “environmentally friendly, and captures CO2 and injects it into the concrete mix.” He also pointed out that concrete “is the most widely used material globally.”
TrinityRail CEO Jean Savage, CEO, stressed that the loss of rail traffic to trucks can be attributed to “cost, complexity and consistency. Handling the expected traffic growth will require $350 billion in road infrastructure, while the rails already have the capacity to handle most of the growth while saving energy.”
Union Pacific Executive Vice President Marketing and Sales Kenny Rocker said the railroad “is committed to delivering safe and reliable service. Working collaboratively and investing to grow, we are enhancing the customer experience through product development and technology.” Freight car velocity is up 5% while the Service Performance Index shows Intermodal up 1% and Manifest/Auto is up 5%,” Rocker noted. UP invested $10.5 billion in capital improvements over the past three years, and is investing for future growth in Iowa and expanding yard capacity in Kansas City “while also developing rail solutions for customers to grow.”
Analyst Tony Hatch and intermodal specialist and consultant Larry Gross closed out the conference with an overview of the present rail situation with their “To Grow or Not to Grow? That is the Question” session. Hatch raised the question, “Is 2025 finally the pivotal year for North American freight?” After all the obstacles, will there be another Renaissance? Can Wall Street get over the operating ratio and relax as the railroads once again look at the long vision instead of just the short vision?
Gross gave his overview of how intermodal held up as business wound its way through obstacles like the danger navigating the Red Sea, the threat of port labor strikes, Canadian rail strikes, and the uncertainty of the effect of proposed tariffs. But he also warned that “early pulling of product in 2024 could dampen 2025 growth rates.”
