Trade And The UP

[Gilbert B Norman]

Today's New York Times has an article addressing the impact of and trade initiatives made or considered by the Trump administration:

http://nytimes.com/2018/03/30/business/ ... cific.html" onclick="window.open(this.href);return false;

Fair Use:

If North America were a factory, Union Pacific would be its biggest conveyor belt.

Based in Omaha, the company operates the largest rail network on the continent, a conduit that provides us with cereal, lumber, car parts and pretty much everything that touches our lives. That makes the railroad a real-time barometer of the fluctuations in global trade — a physical manifestation of how President Trump’s agenda to remake the rules of commerce will play out.

Roughly 40 percent of the goods that Union Pacific moves touch an international border at some point in their journey, putting the railroad at the center of the global tensions that have arisen as the administration prepares to impose tariffs on goods from China and steel and aluminum from around the world. Seventy percent of rail freight between the United States and Mexico travels on Union Pacific trains, meaning the outcome of the tense renegotiations for the North American Free Trade Agreement will shape the company’s future.

Emphasis is of course directed at the NAFTA Agreements and, should the Administration seek to modify such and the impact on UP.

Not mentioned is the impact same will have upon KCS, which being a smaller road and considering it's stake in the former NdeM that is now branded KCSM. The UP has a significant interest in the former SP-M lines branded Ferromex.

disclaimer: author holds long position UNP

[Backshophoss]

UP interchanges at several points at the Mexican border,Largest is Laredo Tx(also with KCS),Brownville Tx,El Paso Tx,(with BNSF)Eagle Pass Tx,
Del Rio Tx,Nogales Az,and Calexico Ca.

[57A26]

What Fritz is worried about is production moving back to the US. Factories would most likely be closer to consumers and goods would mostly move by truck. For UP, if it isn't unit train/intermodal type business and/or moving less than 750 miles-they aren't interested. They've had numerous opportunities over the past few years for business that they've turned down in my area. Some of which wouldn't have required running more trains or using more people. Then they have the gall to ask employees to submit any opportunities for new business.

[Gilbert B Norman]

Encouraging report appearing today in The Journal:

https://www.wsj.com/articles/west-coast ... 1599761927

Fair Use:

Freight railroads that carry a large share of the retail and manufactured goods deeper into U.S. inland distribution points through intermodal truck-rail services are grappling with the influx of cargo after months of slack demand during the earlier stages of the pandemic.

Union Pacific Corp., the second-largest U.S. railroad by revenue, has raised surcharges on some West Coast lanes for spot-market shippers and for customers moving more cargo than they had contracted for.

“Intermodal shipments have been the fastest to rebound as retailers replenish inventories,” a spokeswoman said, adding that Union Pacific is giving priority to customers with load commitments before taking on surge and transactional shipments.

Possibly the decline in traffic volume experienced not only by UP, but by the other six Class I's as well (six? Grand Trunk /CN and SOO/CP are Class I's lest we forget) is behind the industry and its stakeholders.

Finally, to close with a question: when did the UP get "busted" to #2?

disclaimer: author long UNP