Well, we may have found out a few things about rails in the past 24 or so hours:
- Perception does indeed equal reality (and the initial perception was, as one major supplier said to me, “this is really bad news for our industry, right?” Well, it’s not good to be called out by the White House, but in reality, this doesn’t mean much….
- The markets may be a tad….jumpy.
- One Railroader joked while the shares were plummeting that “Hunter may have saved the industry – and maybe killed it too!”. A gross overstatement but not un-funny…..
- The real “enemy” of the rails might not be and of a) the STB b) The President or c) the rails themselves but surprisingly d) The Walls Street Journal! See the impact on KSU after their scoop on the Executive Order came out, at bottom….
Now, I don’t really mean that, but the WSJ broke the story about an impending EO last Friday when everyone was at the beach. The Journal yesterday (everyone back from vacation) then broke the follow-up story that the EO would include rails (and maritime and Big Ag, maybe) online yesterday complete with two pictures of trains and none of ships or stockyards, or Googles or Apples. In today’s print version, which at least includes commentary by the AAR, it takes until paragraph nine for the article to state that “the call to crack down on ocean carriers and (rail) freights is (but) one facet in a multipronged Executive Order (emphasis and added words, mine)….In fact, it’s said by some in DC that the rails were a later addition to the club. Supply chains and their “fragility” – and their inflationary impact – have been front-page news for a while now….
Note that the scoop and the EO do not say anything about the railroads that the STB hasn’t already (surprisingly) said in its recent decisions, public speeches, etc.