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.