- Railroad revenue tends to correlate strongly with growth in the industrial economy, and the tendency has been toward growth in the U.S.
- Railroads own their own infrastructure and tend to act almost as oligopolies within their geographies -- CSX and Norfolk Southern dominate the east coast, and Union Pacific and BNSF operate mainly in the western U.S. -- meaning that Union Pacific's market position is relatively secure.
- While revenue will oscillate with economic growth, all the major listed railroads are engaging in precision scheduled railroading, or PSR (more on that in a moment), initiatives designed to increasing profitability, so earnings prospects are getting better.
- The same PSR initiatives are improving service levels -- for example Union Pacific is improving its trip plan compliance -- and management believes it's winning market share from trucking as a consequence.
- Railroads can benefit from any opportunity from a pickup in North American manufacturing due to reshoring.
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