Live from New York...it's RailTrends! — an event preview by Tony Hatch

By Tony Hatch

After a year’s live absence (but as good a Zoom as you can have), RailTrends is back in person at the New York Marriott Marquis in wide-open (vax-mandated) New York City Nov. 18-19. Despite the uncertainties, difficulties in travel (including cross-border) and everything else we’ve all had to face, we have a really good thing going at RT21. We’ll be covering the key rail investment themes (overcome as everything was by the pandemic, but now re-emerging) of growth/ESG/technology while hardly ignoring the up-to-the-minute issues of consolidation, regulation and supply chain. And by being “live,” we can once again bring out the hidden power of the RailTrends franchise — the quality of and interaction with the audience.

Our 2021 Railroad Innovator Award recipient is CN President and CEO JJ Ruest, who was chosen based on his body of work. JJ helped move Canadian National from PSR to PSR 2.0 and now to DSR (digital). Of course, we know there is an activist campaign by large CN (and, remember, Canadian Pacific) shareholder TCI to replace Mr. Ruest with well-known former CN (and UP) COO Jim Vena. And last month, CN announced Ruest would retire at January 2022’s end. As of now, we do not know the full TCI plan, and only the beginnings of CN’s response, so the target date for the special shareholders meeting of March 22, 2022, seems to still be the key moment in the future. 

That said, attacking CN for the operating ratio and growth gap to their rival CP, echoing some themes of the just-concluded campaign for KCS, seems short-sighted and a turn away from growth (and “feeding the beast”) toward margin improvement — exactly not what the (U.S.) regulators want to hear! And the “real” OR gap is only about ~2-300bps, not the 1,000-1,500bps opportunities that existed in the three activist shareholder campaigns this century (CSX, CP, CSX again) … after a 50-year or so pause, all three successful, two of them helmed by the late Hunter Harrison. JJ’s speech therefore will not only be partially valedictory, but an important campaign milestone. 

Growth: That railroads had for the most part passed PSR 1.0 (cost revolution) and entered 2.0 was overwhelmed by the pandemic and the rhetoric. Of course, not all of the criticism is wrong, but we wanted to re-focus the discussion back on “the pivot to growth” (CP’s phrase) and the acknowledgement that “service begets growth” (KCS’). Kicking off the theme will be lead-sponsor Oliver Wyman in the person of Railways Partner Adriene Bailey, whose speech at our 2020 virtual event was the buzz of the conference (if only there was a live cocktail party then — for so many reasons but mainly to continue that discussion!). This year, she will discuss “Creating a Customer-Centric Rail of the Future,” the unofficial theme of this year’s event.

In addition, from the carriers:

• The future of CP and the new CPKC from CEO Keith Creel himself. Nuff Ced!

• Union Pacific Railroad Executive Vice President of Marketing and Sales Kenny Rocker.

• CSX EVP of Sales and Marketing Kevin Boone.

• KCS EVP-Operations John Orr, who will talk about how their service improvements, especially in Mexico, will, er, beget growth. After John’s speech, there will be a special recognition of EVP Precision Scheduled Railroading Sameh Fahmy — featuring the KCS management team.

• Our annual short line commercial panel, the entrepreneurial side of railroading, cited by CPKC as a source of synergistic growth and critical to the post-PSR world, featuring Michael Miller, Genesee & Wyoming Inc.’s president of North America; Alin Campian, R. J. Corman’s VP of commercial strategy and yield management; Jimmy Patterson, Watco’s SVP of sales for railroads; and Bruce Lieberman, Anacostia Rail Holdings Co.’s co-founder and EVP/CFO.

• I will stick the Analyst Panel here, as Larry (“Mister Intermodal”) Gross and myself (insert your own nickname — be nice) will discuss the current, intermodal-centered supply chain issue and the future of rail/intermodal growth potential.

Technology & ESG will be sub-themes in most, if not all, the presentations … but will feature in two specific presentations:

• Rail Pulse — an update on the transition of this game-changing diplomatic achievement into a practical technological visibility solution for rails and carload shippers, featuring two-fifths of the co-founders: Gregg Mitchell, EVP/CCO of Trinity Industries Inc., and the irrepressible Mike McLellan, VP of strategic planning for Norfolk Southern Railway. At the networking break, I am sure you can ask these guys about other things at NS and Trinity!

• New power options for locomotives — Who better to tell us about jumping on the Green Train than Gina Trombley, Wabtec’s EVP of sales and marketing, and COO-Americas?

Regulation — The issue (threat?) is baaack, and it will also be a sub-theme in most, if not all, of the presentations, by the CEOs, and as related to reducing congestion and the growth pivot, but will be specifically addressed thrice:

• We’re pleased that we’ll have an update from Surface Transportation Board Chairman Marty Oberman. Marty has become a friend, even if we don’t always agree, and he is not shy.

• In a prequel, Association of American Railroads President and CEO Ian Jefferies will present the rails’ position on issues such as reciprocal switching and regulation of rails, in general.

• In addition, we’ll have our annual “Association Viewpoint Panel,” featuring Railway Association of Canada President and CEO Marc Brazeau; National Railroad Construction and Maintenance Association President Ashley Weiland; REMSA President Urszula Soucie; and Intermodal Association of North America SVP Jon Palmbak. And after a pandemic-induced hiatus, we’ll have ASLRRA back in ’22.

We expect to directly address the North American rail issues of the day — growth, service, technology, regulation, activism, ESG — head-on and come out the other side much better informed. Join us, LIVE from NYC! Register here. 

Tony Hatch is an independent transportation analyst and consultant, and program consultant for Progressive Railroading’s RailTrends® conference. Email him at abh18@mindspring.com.