A Union Pacific locomotive engineer based in the Pacific Northwest who had just received his notice of exemption from travel restrictions proudly told Railway Age Contributing Editor Bruce Kelly, “We’ve gone from building America to saving it.” This UP field employee in Train & Engine Service has embraced his railroad’s slogan, “Building America,” and his heartfelt statement takes it to a higher level—from motto to mantra.
That, dear readers, is what this industry is all about, and it goes beyond the role railroads have as a provider of essential services, freight and passenger. Indeed, it illustrates the resiliency, hope and solidarity that the world needs in order to deal with and vanquish the COVID-19 pandemic. It also illustrates that our industry will continue to do what it does best, moving products and people, while Wall Street weeps and wails, and hedge fund billionaires shaking with fear over trading in their Rolex watches for rattling tin cups filled with plugged nickels plead with Capitol Hill—under the self-delusion of genuine concern—to shut the nation down for 30 days, lest their stock portfolios evaporate. (Yeah, Mr. Ackman—remember him?—I’m talkin’ about you.)
But let’s not kid ourselves. The situation is dire. The world hasn’t faced a health crisis like this in 102 years, when the 1918 Flu Pandemic (“Spanish Flu”) infected 500 million people—27% of the population—and killed 50 million, a 10% mortality rate. “While the 1918 H1N1 virus has been synthesized and evaluated, the properties that made it so devastating are not well understood,” says the CDC. “With no vaccine to protect against influenza infection and no antibiotics to treat secondary bacterial infections that can be associated with influenza infections, control efforts worldwide were limited to non-pharmaceutical interventions such as isolation, quarantine, good personal hygiene, use of disinfectants and limitations of public gatherings, which were applied unevenly.”
Here’s Railway Age Wall Street Contributing Editor Jason Seidl of Cowen and Co.:
“Over the past 150 years, the North American rail industry has survived several pandemics, two world wars, numerous recessions and oppressive governmental regulations. It remains well-equipped to survive extreme economic swings. While we acknowledge that the current situation is very fluid, we felt it necessary to re-examine the outlook for the remainder of the year and next year. Accordingly, we have reduced our full-year 2020 and 2021 expectations given our current view on coronavirus impacts. We have modeled for 2Q2020 to be the hardest hit. That said, we continue to believe that, even as 2020 results will be significantly lower than expected just a few months ago, railroads remain well-positioned to handle this downturn with good balance sheets and operations that have been streamlined over the past few years due to PSR implementation (emphasis mine). Additionally, rail pricing has continued to be strong quarter after quarter and is expected to remain above cost inflation, even in the downturn."