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Reply to "Union Pacific Railroad • Press release."

juniata guy posted:

Dominic:

if the past is prelude to the future - no.  Over the past 15 years the railroads have consistently been caught with their pants down when the economy rebounded.  They are slow to pull equipment from storage and even slower to either recall furloughed employees or begin recruiting new ones.  They are slower still to boost capex aimed at capacity expansion.  This inevitably leads to service failures and unhappy customers till the railroads have thrown enough money at the problem to make it go away.  

And as I've stated in other posts in the past, the railroads will jack up rates when business is off because "velocity has improved" and they'll jack rates again when service deteriorates because they have to fund capital expansion and increased recruitment.

Curt

capex=capitol expense?

I think you have nailed it not just for railroads, but for all US businesses!

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