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Today’s pickup: BNSF’s performance, tariffs hitting order books, Old Dominion’s July

Photo: BNSF

Good day,

BNSF, as a subsidiary of Berkshire Hathaway, doesn’t have a standard earnings report and conference call with analysts. It does, however, put out what might be best called a financial summary. The one it released for the second quarter shows it had the worst OR of any of the class 1 railroads serving Canada and the U.S. Operating Ratio can be controversial. In some of the earnings calls for both trucking companies and railroads, executives—those with ORs higher than the rest of their peers—would say, in essence, that there’s more to judging performance than a company’s operating ratio. Some of the comments on FreightWaves’ Facebook page about the BNSF story, many from presumably employees, think OR is a tool just to get rid of workers, and in fact the railroad with the strongest OR—CSX—appears to be the least aggressive in adding to work force. But one thing about benchmarks, no matter what industry they’re in, is that they are short and to the point and give a quick indication of how things are. OR is a benchmark. It will always be one of the first things that somebody looks at in judging the performance of a company.

Did you know?

Old Dominion Freight, in filing its 10-Q with the SEC for the second quarter, gave an update on what the LTL carrier had seen so far in July. This isn’t required, but ODF does it, and it is a snapshot of how things did in the month just completed. In its report, ODF said LTL tons per day increased 10.1% in July compared to the prior year, “due primarily to a 10.3% increase in LTL shipments per day that was slightly offset by a 0.1% decrease in LTL weight per shipment as compared to July 2017.” It also said LTL revenue per hundredweight during the month increased approximately 11.8% compared to the corresponding month of 2017.


“Right now I’d say the top line experience is more defined by the uncertainty around the tariff environment. So if we take a couple categories, if we take meat and particularly pork, we’re seeing less export activity to China. And if we look at the import side, we’re seeing less steel imports. And I think those changes in tariff environment and the uncertainty around the tariff environment is what’s ‘s being disruptive to our revenue stream, not so much competitor pricing activity.”

–Roadrunner President and COO Michael Gettle on an earnings call, talking about the impact on the company’s business from tariffs.

In other news:

Raising big bucks for tech 

A Chinese firm targeting technology in freight has raised $10 billion. (WSJ)

Consolidation in tanker truck segment

Heniff Transportation expands with acquisition (Heniff announcement)

Cruising down interstate 14, someday

A five-state new interstate highway has been proposed. (CDLLife)

You break it, you bought it

Global supply chains are easy to snap (Foreign Policy)

London court ruling impacts an African port

The country of Djiboiuti is angry about a London court ruling regarding its port (The Loadstar)

Final Thoughts

As a possible hard Brexit looms, when the discussions turn to the consequences, trucks inevitably come up. A truck now leaving Calais and heading through the Chunnel has a series of steps that must be taken, and given that the UK and France are both part of the EU, the steps are not complicated. One thing you’ll see commentators note is that if negotiations on a new trade arrangement fail, and the odds of that appear to be rising, just what does the trucker do? What do the UK and the French officials do? Nobody seems to know. But it will likely be the first post-Brexit snafu, and pity that first poor lorry driver, as they’re called in the UK, who has to deal with it.  

Hammer down everyone!


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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.