PSR Will Be Tested Amid Depressed Volumes
The COVID-19 pandemic has resulted in recent rail traffic declines and Class l railroads are keeping workers and equipment on standby in preparation for an economic turnaround. Rather than laying off or furloughing employees, railroads have placed workers on unpaid time off awaiting a freight recovery. Turning to the equipment side, locomotives and railcars are being idled but maintained in such a way that they can be put quickly back into service. Union Pacific (UP) calls this pool of equipment, “at-the-ready status”, as these assets are available to be added back quickly within hours.
As a result of the Precision Scheduled Railroad (PSR) initiatives mentioned above, railroads have been able to post record profit results in a declining environment. UP, CSX and CP have all reported their best-ever quarterly operating ratios, despite a weak 1Q 2020 volume environment.
PSR initiatives warrant railroads to focus on running fewer and longer trains that stick to tight schedules while cutting costs for improved profitability. Benefits to PSR principles appear to be holding up well, as most railroads have reported their best service performance in years. PSR will be tested as we enter a Q2 2020 recession where rail traffic is expected to be down up to ~25% year-year, but the railroads appear to be ready and resilient.
Interested in learning more about Precision Scheduled Railroad? Check out our blog post that covers all things PSR!
Going Strong With Greenbrier
We’re here to help. Greenbrier is a leading supplier of freight transportation equipment and services that power global markets. We manage over 378,000 railcars and maintain a steadfast commitment to our customers.
While our Integrated Business Model gives us a deep understanding of how the different Class I railroads operate, we’ve also managed our own fleet for the past 30 years. That experience allows us to deliver value to customers at a level that’s difficult for anyone else in the industry to duplicate.
As the best-in-class railcar management solutions provider in North America, we have the right expertise to guide our customers through any new challenges, improvements and logistics ahead.
Find out more about how our team can help guide you through PSR.