We don’t know much about art, but apparently famous painters go through different periods. Picasso had three: Blue Period from 1901-1904, Rose Period from 1904-1906, and Cubism from 1907-1917.
Transposing that to the rails, and we have the Meltdown Period from 2014-2022, Recovery Period from 2023-Spring 2025, and in recent months the railroads are flirting with their BAOE Period: Beautiful Absence Of Emergencies. Even hurricane season has been canceled. It’s like watching disaster movies non-stop for 11 years and then all of a sudden there’s nothing on TV apart from nature shows with blue skies and cheeky monkeys. This routine normalcy is going to take some getting used to.
With that as a backdrop, last week’s operating data, through Sept. 5, includes Labor Day on Sept. 1; the third of the four big public holidays during the year that impact rail operations. With lower customer activity suppressing volumes by 8% compared to the week prior, the railroads did what they always do: accelerate.
In the past we’ve fixated on these big public holidays because many of them have been instrumental in turning struggling Class I networks around; Thanksgiving 2022 was the accelerant that finally pushed Union Pacific out of its meltdown state, for example. However, Labor Day is different this year because, as we say at the top: There’s nothing to fix. None of these networks need to be pulled out of the ditch, and the ability to clear yard backlogs in a soft volume week isn’t that relevant when backlogs are modest.
As a result, we’ll just see the vanilla effects this year, which is a bump in speed for a week or two, followed by a normalization that approximates pre-holiday healthy levels.
Out of interest, in the table below we’ve compared Labor Day week 2025 with the same week last year, and you can see some nice gains for three of the four U.S. networks in terms of velocity, dwell and cars online.
It was only Norfolk Southern that wasn’t able to post YoY gains. NS had the best operational improvement momentum in the industry between July 2023 and the end of 2024, but it feels like that’s come off the boil a little in recent months (metrics remain good in absolute terms). We also worry about the degree of strategic stasis and motivation of the staff at Atlanta HQ (including the Network Operations Center) over the next 18 months as they await a merger decision.
