How resilient is rail relative to the other modes of transportation during this pandemic?

Hatch Train 300 (Square)

Rails are as – really much more - resilient as any industry. Yes, they are mostly a derived-demand business (if there is nothing produced, nothing will move) with some share capture abilities. But rails actually have a lot going for them:

  • They have a critical, well-maintained (privately-maintained, without politics) infrastructure; with lasting value for North America.
  • The rails are operating well now, with a very fluid network, thanks in part to 2018-initiated PSR at US rails.
  • The rails still carry essential commodities such as grain.
  • Rail operations are essential, and often well-situated for work in C19 conditions.
  • Rails have a proven ability to reduce expenses in a recession (about 50% of their expenses are variable).
  • The rails are in excellent financial condition, with plenty of liquidity (this may be the most important point of all).
  • They have management teams looking to the long term, in this crisis that will pass.