At first glance, rail shipments look terrible with carloads at their lowest level of the century – indicative of widely reported supply chain problems. Industry players have been quick to compensate for this sharp decline in units, aggravated by a sharp increase in costs (particularly energy inputs), by hiking prices.
With macro performance like that, we would expect terrible financial performance for Union Pacific (one of the industry’s largest players). But that is not what we find – rather EBITDA margins are the strongest they have been. Printing numbers like this is sure to catch the attention of a union that feels entitled to share in more of this cash flow.