Ask The Experts: March 27, 2019
Independent Transportation Analyst and Consultant
Q: How are changes within Amazon affecting logistics companies?
A: “You understand, Captain, that this mission doesn’t exist”: After announcing that they lost ~$600mm in annual revenue due to Amazon logistics changes, XPO Logistics then announced that they had “terminated” (their words) their COO. With extreme prejudice, one can only assume. Meanwhile, AMZN’s 10-K Report includes a discussion of their “natural competition” between AMZN and logistics companies….
Q: Do you think it is important for railroads to stay involved in political affairs?
A: “The (expletive) is piled up so high in (DC) you need wings to stay above it” - There are rumors that railroads are downsizing state and DC political affairs office (supposedly as part of their OR-driven cost focus); boy I sure hope not. Given the PSR changes (and technology challenges) facing the industry, the need for good government representation (in a world of empowered regulators and a new congress) is more important than ever (though we still have the AAR to “walk that wall”).
Q: What is the latest in rail investment?
A: “You either surf or fight!” Two big rail interested funds are getting together as Brookfield is buying 62% of OakTree (the $450mm backer of Watco) – can only be good news for rail investment.
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