Be careful with these numbers….a lot of it is simply inventory re-stocking.
“Davidson” submits:
Kansas City Southern(KSU) updated business thru Jun 20th that carloads recovered to 92% of pre-COVID-19…while Train Length rises 27%+. Railroading math and Precision Scheduling creates a much better Cash Flow than many who believe the metrics of Jan 2020 have remained static when they have in fact shifted significantly.
KSU was recommended initially because its management team had already exhibited great skill in executing cost reductions using Precision Scheduling. The pace of their implementation was exceptional and established expectations that positive surprises were likely. This update confirms that not only have they recovered to 92% of Jan 2020 activity level but that KSU with 27%+ longer trains is doing so with significantly less equipment and manpower costs. The 2Q20 earnings report scheduled for July 17th should be a positive surprise.
Many continue to forecast severe recession. Multiple reports thus far, including Federal Express’s(FDX) report this week, imply a relatively rapid economic recovery is in progress. This KSU update does not support recession-thinking as anywhere close to the mark.
